Mercedes’ Focus on Combustion Engines: Why the Shift?
In an interview with German publication Wirtschaftswoche, Mercedes CEO Ola Källenius revealed the company’s decision to invest heavily in combustion engines for the foreseeable future. This shift in focus comes after the realization that the brand’s initial electrification goals were overly ambitious. Källenius acknowledged that ICE technology is expected to last well into the 2030s, prompting the need for substantial investments to ensure compliance with increasingly stringent regulations.
Investing in High-Tech Combustion Technology
Mercedes is allocating a significant amount of funding, totaling €14 billion, towards its passenger car division this year alone. These funds are earmarked for high-tech combustion technology, as well as electrification and digitalization efforts. Källenius emphasized the importance of bringing the brand’s conventional powertrains to the highest technological level, particularly in light of upcoming Euro 7 and China 7 regulations.
Tweaking Combustion Engines for Cleaner Emissions
To meet stricter emissions rules, Mercedes plans to update all relevant combustion engines and transmission combinations to run cleaner. Källenius highlighted the necessity of adapting to avoid hefty fines and ensure compliance with environmental standards. Future engines are expected to have some level of electrification, indicating a shift towards hybridization in the brand’s lineup.
Reevaluating Electrification Goals
With the realization that the transition to EVs is not progressing as initially planned, Mercedes has adjusted its electrification goals. The company aims for hybrids and electric cars to comprise half of its deliveries by the end of the decade, deviating from its earlier target of 50 percent annual sales by 2025. Despite the pivot, Mercedes remains committed to achieving carbon neutrality by 2040 under Källenius’ leadership.
Continued Focus on Electric Ambitions
Contrary to rumors about the cancellation of key projects, such as the development of a platform for the next-generation EQS, Mercedes affirms its commitment to advancing its electric ambitions. The company’s plans for eight gigafactories to produce batteries in support of its electric lineup remain intact, albeit with a slightly delayed timeline. Additionally, Mercedes is exploring collaborations with Geely to develop hybrid engines, leveraging the Chinese group’s expertise in range-extending technologies.
Conclusion
Mercedes’ strategic shift towards investing in combustion engines underscores the brand’s commitment to addressing regulatory challenges and ensuring compliance with emissions standards. While the company continues to navigate the evolving landscape of electrification, its focus on high-tech combustion technology serves as a testament to its adaptability and resilience in the face of changing industry dynamics.