Mercedes-Benz Backpedals On Its EV Initiative, To Invest More Heavily In ICE Tech

Summary

• Mercedes-Benz refocusing on ICE technology, delaying EV goals due to slow sales and charging infrastructure issues.
• CEO Ola Källenius plans to invest in high-tech electrified combustion engines, aiming for a 50:50 sales split of EVs and hybrids by 2030.
• The updated S-Class, expected in 2026, will undergo a more comprehensive revision reflecting the new focus on ICE technology.

Mercedes-Benz is apparently dialing back on its EV initiatives amid the recent cool-down behind the push towards electrification. Instead, the company will reportedly refocus its efforts back on conventional internal combustion engine technology, canceling original plans that called for more than half of Mercedes-Benz’s passenger car sales to be electric or gas-electric hybrid by 2025.

A new report from one of Germany’s acclaimed weekly economic and business publication, Wirtschaftswoche, who apparently met with Mercedes-Benz executives in Germany, claims that CEO Ola Källenius officially announced the car company’s plan to continue researching and developing ICE technology “well into the 2030s” at an investor and shareholder meeting.

Automakers Like Mercedes-Benz Scrambling To Rework Future Plans From Plummeting EV Sales And Interest

It’s no mystery that the hype behind the push towards electrification has been cooling off recently, and it’s reached the point where automakers, like Mercedes-Benz, are turning back on their aggressive EV offensives. That’s because sales of EVs have slowed down and interest waned as potential buyers continue to struggle with high-priced entry points, adapting to inconvenient charging times, and persistent charging infrastructure woes.

While electric vehicles have conceptually proven themselves to work as cars and they’ve evolved to drive, handle, and perform just as well, if not better in many respects than their gasoline counterparts, they’re still saddled by drawbacks that are limited by the current technology available. One of those major drawbacks is charging times. Even though fast charger technology has improved and continues to improve, reducing overall charging times and the negative effects that fast chargers have on battery longevity, recharging an EV still takes considerably longer than filling up a tank of liquid fuel.

It’s at the point where majority of prospective buyers don’t even entertain the transition due to the extra effort and added time needed to recharge an EV. Additionally, charging stations have a hit or miss reliability record and don’t always work and owners are also forced to spend thousands to install fast chargers at home, if at all possible, depending on their living situation. Those who live in apartment buildings or condominiums are often SOL or faced with difficulties when it comes to charging, even when on-site charging stations are present.

All these rather minor, but still major setbacks continue to prevent electric vehicles from truly becoming the norm and as a result, Källenius is rethinking Mercedes-Benz’s plan for the near long-term future.

Källenius claimed to have allocated over “14 billion euros in research and development and in our plants with a focus on digitization, electromobility, and high-tech combustion technology,” according to WirtschaftsWoche during its interview with the chief executive officer. “A significant portion of this will be spent in Germany, and especially in Baden-Württemberg,” he continued.

Not Turning A Complete Blind Eye To Electrification

Despite turning back on initial plans for electrification, Källenius reportedly isn’t abandoning the prospect altogether. Instead, he plans on positioning the German automaker to a point where they can continue to invest, research, and develop high-tech combustion engines, including “electrified high-tech combustion engines,” which implies a continued interest in gas-electric hybridization.

That means setting up manufacturing and “industrial structures” in a way to remain “flexible” so that the car company can pivot in whichever direction needed to satisfy market demands. Additionally, these new plans will apparently stick with Mercedes-Benz “well into the 2030s” as the company remains dedicated to meeting new EU7 and China 7 emissions and environmental regulations.

The First Biggest Changes Happen With The Revised S-Class

Because of this renewed and continued focus on developing internal combustion technology, the new direction reportedly uprooted some original plans with the updated and facelifted S-Class. Expected to arrive in 2026, the new S-Class apparently will undergo a significant revision that’s far more comprehensive than what the brand typically does with a model’s midcycle update.

This is probably due to the fact that the S-Class is Mercedes-Benz’s iconic flagship model and the S-Class has always traditionally been Mercedes-Benz’s poster child for new technology and design. Any signature design or engineering features that debut on the S-Class often typically trickle their way into all of Mercedes-Benz’s lesser models with the S-Class sitting at the top of the totem pole as the main influencer for the rest of the lineup. So whatever changes that MB wants will likely debut in the S-Class and will eventually make its way into the E-Class, C-Class, and so-on.

“We have invested a lot more in the facelift of the new combustion engine S-Class than we normally spend on a facelift,” Källenius said in some final remarks. “Mercedes is again investing more money in combustion engines than previously planned.”

Mercedes-Benz will also continue building up to eight more gigafactories in partnership with battery producer and supplier, ACC, which the automaker has a controlling stake in. Källenius concluded by saying he hopes that Mercedes-Benz will be in a “50:50 scenario” by 2030 where 50 percent of the company’s sales consist of electric cars, while the other 50 percent comes from electrified high-tech combustion engines or hybrids.

Source: Wirtschaftswoche