Mercedes-Benz Gets Ready To Rival Tesla In All-Electric Vehicles Segment

Investments of more than 40 billion euros ($47 billion) by 2030 is being planned by the Mercedes-Benz maker Daimler to prepare itself for development of electric vehicles (EV) to take on the United States based market leader Tesla, the company said, while also warning that this will lead to some job losses.

Its plans of revamping of its EV production also hinge upon battery production and the company will build eight battery plants through various partnerships, said the company – the inventor of the modern motor car, while outlining its strategy for an electric future.

The German luxury automaker added that all new vehicle platforms will only make EVs from 2025.

“We really want to go for it … and be dominantly, if not all electric, by the end of the decade,” Chief Executive Ola Källenius said and added that the spending by the company on the traditional combustion engine technology would be “close to zero” by 2025.

However no specific deadline for ending sales of fossil-fuel cars was provided by the company. Later this year, Daimler is set to be renamed Mercedes-Benz as part of plans to spin off its trucks division.

There are a number of car makers that have already committed to going fully electric and spelled out deadlines. For example, while General Motors Co said that it has set a target to becoming fully electric by 2035, Geely-owned Volvo Cars has ple3dged to become all electric by 2030. Such companies are trying to close the gap with tesla in the all-electric segment.

“We need to move the debate away from when you build the last combustion engine because it’s not relevant,” Källenius said. “The question is how quickly can you scale up to being close to 100% electric and that’s what we’re focusing on.”

The development pushed Daimler’s shares by 2.5 per cent. Two weeks ago, the European Union put forward a proposal for an effective ban on the sale of new petrol and diesel cars starting 2035 as a part of its overall strategy to address global warming.

A series of major investments in EVs were announced by car makers prior to the announcement by the EU.

An announcement of more than 30 billion euros by 2025 on electrifying its line-up was made earlier this month by Stellantis.

There is a planned reduction of 80 per cent of the investments being made in combustion engines and plug-in hybrid technologies between 2019 and 2026 at Mercedes-Benz because of its new strategy to shift to all electric. This reduction in investments and spending will have a direct impact on the related jobs in the segment, the group said.

Making EVs require fewer workers than combustion engine vehicles because EVs have fewer components.

“A transformation of our workforce will involve tough decisions. Yes, overall we must and will reduce our personal costs,” Mercedes-Benz management board member and head of human resources Sabine Kohleisen said.

(Adapted from Investing.com)



Categories: Economy & Finance, Strategy, Sustainability, Uncategorized

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