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Mercedes CEO Says EV Transition 'Might Take Longer Than Expected'

Mercedes-Benz once envisioned an aggressive, fast-paced transition to electric-only sales by the end of the decade. Now, amid a slowdown in the pace of EV sales growth, it's convinced that combustion engines have a future well beyond 2030. Mercedes-Benz chairman and CEO Ola Källenius made that clear during the company's annual shareholder meeting on Wednesday

"The strategic aim of Mercedes-Benz is zero emissions. That is certain. However, the transformation might take longer than expected," Källenius said, doubling down on similar comments he made earlier this year. 

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Automakers slowing their roll on EVs

EV sales have hit a rough patch. It's probably a combination of charging anxiety, high interest rates, high vehicle prices and a dwindling market of early adopters. That's making some automakers pull back their electrification plans. 

He said that factors like how quickly charging infrastructure expands will impact the pace of Mercedes-Benz's zero-emission transition. Sales of hybrids, he said, could continue well into the 2030s "if the demand is there."

In other words, Mercedes plans to sell combustion-powered cars as long as people want them. Mercedes has set its plants up for flexibility, Källenius said, so that it can adjust capacity for both gas-powered and battery-electric cars to meet consumer demand. 

However, Mercedes will have to contend with tightening emissions regulations worldwide. So, it must clean up its fleet regardless of consumer appetite. 

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Automakers, including General Motors and Ford, began pumping the brakes on their EV investments late last year, citing lower-than-expected demand from a changing customer base. EV sales have indeed hit some speed bumps in recent months, particularly when you look at Tesla's dismal first quarter

But don't misinterpret the doom and gloom from Mercedes and others. EV sales have grown spectacularly in recent years and will continue to eat up an increasing share of the global auto market. Mercedes-Benz brand EV sales were up 73% in 2023. The automaker's backpedaling may have a lot to do with profitability concerns around its electric cars. As old-school automakers invest heavily in EVs, they've been deriving most of their profits from gas-powered cars and SUVs. Last year, Mercedes warned that the "brutal" EV market could harm its margins. 

It's also important to note that Mercedes isn't doing as well on the electric front as its perennial rival, BMW. Electric cars made up 14.7% of BMW's global sales last year, versus 11.8% for Mercedes. In absolute terms, BMW sold 376,183 EVs across its brands in 2023. Mercedes-Benz's EV sales came in at 240,600. 

Got a tip about the EV industry? Contact the author: tim.levin@insideevs.com

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