Introduction:
This article covers Mercedes-Benz’s recent decision on its future product line-up and its stance on electric vehicles. Initially, the German automaker was overly optimistic about the rise of electric vehicle technology, aiming for electrified models to make up half of its sales by 2025. However, that goal has been lowered as the hurdles and slow pace of EV adoption worldwide become clearer. Now, the company plans to continue producing some of its conventional gasoline-powered cars for longer, and hybrid and electric vehicles are expected to make up just 21% of its total sales by 2024. This shift points to the impact that consumer demand and market conditions have on manufacturers’ electrification strategies.
Optimistic EV Targets Reduced
Mercedes has had to revise overly optimistic EV sales targets from an ambitious 50 percent of sales by 2025, to a more realistic 21 percent by 2024. CEO Ola Kallenius has stated that the financial parity between combustion engine cars and fully electric models remains a distant future. This has resulted in Mercedes delaying the phase-out of the popular and budget-friendly A-Class model, which was originally scheduled to be discontinued by 2024.
A-Class Lifecycle Extended
The lifecycle of the A-Class, a compact hatchback that offers a gateway into the Mercedes line-up, has been extended to 2026. This suggests that combustion engines will maintain a significant role in Mercedes’ future plans. The A-Class’ price point, starting at €37,401, highlights the pricing gap between internal combustion engine (ICE) vehicles and fully electric ones.
Mercedes’ Future Compact Cars
The German automaker is developing a new family of compact cars, including replacements for models such as the CLA, CLA Shooting Brake, GLA, and GLB. These cars will be built on the new MMA platform, which will support both traditional gasoline engines and fully electric drivetrains. Plans for other models like the A-Class sedan, the B-Class minivan, or the “Little G” SUV are still unclear.
New EV Adoption Projections
By 2030, Mercedes now anticipates that plug-in hybrids and EVs will make up 50% of its total shipments. This is a considerable shift from previous predictions that suggested the company could be entirely electric in some markets by the decade’s end. The revised targets suggest it will continue producing cars with gasoline engines into the next decade, in response to slower EV adoption.
Reality Check on EV Transition
Mercedes’ shift in strategy indicates a pragmatic approach towards the pace of electrification. The decision to retain the option of combustion engine vehicles in their line-up as late as 2031 illustrates the brand’s recognition that customer preferences and market conditions dictate the speed of transformation. There are current discussions suggesting even the European Union’s sales ban on new cars with emissions, set for 2035, might be postponed. If this occurs, the combustion engine era could last longer than expected.