Electric Vehicle Push by Mercedes: Full-Electrification by the End of the Decade
In a significant move towards a greener future, Mercedes-Benz, the luxury car brand owned by Daimler AG, has announced a bold electric strategy that aligns with the proposals from the European Union's executive commission to tighten limits on carbon dioxide emissions.
The German automaker is doubling the share of electric car sales it had planned for 2025. This ambitious shift is evident in the first half of 2021, where Mercedes-Benz sold 39,000 battery cars and 121,500 plug-in hybrids. By 2025, the company aims for half its sales to be battery-only or plug-in hybrid cars, up from a quarter in previous forecasts.
The shift to electric vehicles is gaining momentum, especially in the luxury segment, according to Ola Kallenius, CEO of Daimler AG and head of the Mercedes-Benz division. In fact, electric vehicles accounted for 10.3% percent of Mercedes-Benz's total sales in the first half of 2021.
Mercedes-Benz is preparing for a market scenario in which new car sales would be fully electric by the end of the decade. To support this transition, the company plans to invest 40 billion euros ($47 billion) in battery-driven vehicles between 2022 and 2080.
In line with this strategy, from 2025, all newly launched vehicle architectures at Mercedes-Benz will be electric only. The company is also partnering with Contemporary Amperex Technology Co. Limited (CATL) to build eight factories for battery cell production. This 50/50 joint venture, expected to start production in 2026, will help Mercedes-Benz meet its ambitious electric vehicle targets.
The EU's latest proposal aims to eliminate C02 emissions from cars by 2035, and China is imposing regulations requiring more zero-local emission cars. These global initiatives are pushing the automotive industry towards electrification, with other carmakers such as Volkswagen's Audi, General Motors, and Volvo also moving away from gasoline and diesel engines over the long term.
However, the shift to electric cars has moved more slowly in the United States compared to Europe and China. Despite this, Mercedes-Benz's statement regarding its electric-vehicle strategy portrayed going all-electric as a 'market scenario' the company intends to be ready for, rather than a fixed deadline for abandoning sales of diesel or gasoline cars.
Sales of gasoline and diesel sedans and SUVs at Mercedes-Benz are providing cash for the transition to electric cars. CEO Ola Kallenius applauded the high ambition in the EU climate proposals, stating they would help bring about a new era of CO2-free living.
In Europe, the share of electric cars is increasing, heavily driven by regulation and government incentives. Last year, electrically chargeable cars made up 10.5% percent of the European market. As more countries follow suit, it seems that the future of the automotive industry is electric, and Mercedes-Benz is positioning itself at the forefront of this change.
By 2039, Mercedes-Benz aims to make its model lineup climate neutral throughout its production chain. The new Mercedes electric strategy is a testament to the company's commitment to a sustainable future and its alignment with global efforts to combat climate change.
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