Mercedes-Benz CEO Ola Kallenius recently appeared alongside Jim Cramer on CNBC. Like most legacy automakers, Kallenius believes there's still a place for gas-powered cars, and there will be for some time. However, he notes that luxury car shoppers are likely to accelerate the shift to EVs.
Tesla is the most successful global EV maker to date, and it has taken a huge amount of market share away from rival luxury brands. Some may argue that Tesla isn't a true "luxury" automaker, but it matters not. The fact is people are buying Tesla vehicles and skipping those from German luxury automakers, such as Audi, BMW, and Mercedes-Benz.
Gallery: 2022 Mercedes-AMG EQS
Mercedes' CEO made it clear that the automaker still intends to produce ICE cars into the future, but it may not last much longer. If shoppers increasingly choose EVs over gas cars, it will only make sense for the brand, and arguably its rivals, to transition its product lineup more quickly.
Kallenius pointed out that the market is already clearly in the process of transitioning. He explained in an interview with Cramer that was part of the channel's ESG Impact conference:
“Step by step, we see the market turning. I really believe that in this decade, we will flip from being based upon high tech internal combustion engines to going dominant electric, if not all electric, in the luxury segment.”
This is interesting since it wasn't long ago that nearly every luxury automaker was pushing back against EVs. Now it seems most are beginning to see the future much like Kallenius.
Regardless of the CEO's beliefs and forecasts, what may be more important to some is what he intends to do about them. Kallenius goes on to say that Mercedes knows climate change is a real problem and adds that we must deal with CO2 emissions. He also shared that the problem "ends on the desks of our engineers.” Kallenius said:
“We do it because we think it’s right. But we also do it because we think it’s going to be the better business. I don’t think there’s any question for a modern company, a forward-thinking modern company, that we need to decarbonize.”
Nonetheless, Mercedes will still sell both gas and electric cars for many years to come, though the company's CEO thinks customers will increasingly choose EVs over the gas-powered options going forward.
He also shared that most electric options are already sold out, at least for the time being, so some people who want to make the switch simply may not have the option. The fact that the electric choices are selling out could be seen as further proof that Kallenius' predictions are based on the demand the company is already realizing.
