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reDaimler’s big show will not be affected by the Corona crisis. CEO Ola Källenius and his colleagues stand in a hallway in front of a huge screen where their perfectly designed presentations are alternated with videos.
For an entire afternoon, the managers guide them through their strategy for Mercedes-Benz. Only the audience, investors and analysts from around the world, is not there.
On the road to electric mobility, Daimler is not yet as good as the board of directors. The group has just reached a critical point. The premium manufacturer doesn’t have a competitive battery-only vehicle to offer yet. But that should change next year when the EQS, the electrified “sister car” of the S-Class, hits the market.
High goals for electric mobility
The company has announced a 700-kilometer range for the car on a battery charge, and it should also be able to recharge 250 kilometers in 15 minutes with the proper power connections.
Both values are above the capabilities of the Tesla S, which has so far been considered the benchmark in the E-luxury class. In the medium term, the Stuttgart-based company has set itself very lofty targets: “At Mercedes-Benz we strive to achieve nothing less than leadership in the field of electromobility and digitization through an intelligent platform strategy and a software-based approach, “says Markus Schäfer, member of the Daimler Development Board.
Källenius wants to turn the automaker into a luxury company that achieves a return on sales “in the medium to high single-digit percentage range” by 2025. However, the goal is to achieve double-digit profitability in an environment solid market.
New platform for battery-powered vehicles
Unlike the Group’s previous plug-in and electric models, the EQS will be built on a new platform that Mercedes has developed over the past four years. On this basis, Mercedes plans to introduce at least three more battery-powered vehicles, the Electric Vehicle Architecture (EVA), in the coming year: the EQE and an SUV variant of the EQS and EQE.
Purely battery-powered vehicles will also be created in the coming years under the Maybach, AMG and G sub-brands.
The EQS, the electrified “sister vehicle” of the S-Class, will hit the market in 2021.
Source: Daimler AG
For the smaller cars in the compact and mid-range segment, the group is also developing a base on which many models can be built. According to the plan, this Mercedes-Benz Modular Architecture (MMA) can be used from 2025.
While Daimler manufactures car engines, the company cooperates with battery suppliers and research institutions. In addition to Chinese manufacturers CATL and Farasys, Californian battery developer Sila Nanotechnologies is also working with Daimler, whose boss Gene Berdichevsky praises the great future of batteries in a video clip.
Berdichevsky, who was once one of Tesla’s first employees, hopes that together they will build storage units with twice the range, one-third the current charge time and ten times the useful life.
Doing everything yourself, as the competitor from California, is out of the question for Daimler. “We are following ours, Mercedes style”, says Schäfer and gives the objective of the “Vision EQXX”, in which its developers are already working: the most efficient electric car in the world, with the greatest autonomy.
Of course, Daimler has less money available for this than Tesla boss Elon Musk, who can regularly afford multi-billion dollar capital increases on the stock market. The Stuttgart-based company, with its huge old factories, has to cut its costs massively while investing in electromobility.
A fifth of the previous expenses for production and personnel will be eliminated by 2025, and less will be spent on research and development in the coming years. It was recently speculated that up to 30,000 jobs will be lost in the course of this process.
Källenius and his fellow board members did not give a number on staff savings in their program. To do this, they shelled a series of videos in which the main executives of Mercedes committed themselves to the savings objectives. They also gave reasons, for example, the gradual exit of the internal combustion engine, the production of which is more complex than the production of electric drives.
Strong growth in China
Investments in internal combustion engines would decline rapidly, Schäfer said. “We have achieved our goal of combustion engines.” By 2030, the number of variants of these engines would be reduced by 70 percent. More than every second Mercedes should be a fully electric vehicle.
However, in the short term, Daimler is primarily concerned with an economic change. Corona hit the group and its biggest brand hard in the first half of the year. Now a slight recovery is emerging.
Source: WORLD infographic
For the first time this year, Mercedes-Benz again sold more vehicles in the third quarter than in the same period last year. Sales rose 3.9 percent to 613,770 cars, driven by strong growth in China, where Mercedes sold 23 percent more cars than in the same period last year.
In total, the group has sold around 1.5 million cars since the beginning of the year, ten percent less than the previous year’s figure at the end of September. “Demand from our customers was significantly higher in the third quarter than we had assumed in March and April in light of the challenges posed by the pandemic,” says Britta Seeger, Daimler’s director of sales.
“The increasing number of incoming orders for plug-in hybrids with the star is an excellent response from customers about our growing portfolio. From July to September, we ended the first quarter so far with over 10,000 xEVs of Mercedes-Benz Cars delivered each month. “
Mercedes should become a luxury brand
The high demand for electrified models has continued, especially in Europe, says Seeger. This was undoubtedly contributed by the strong increase in purchasing premiums in Germany. However, Mercedes customers cannot benefit from the maximum premium of 9,000 euros that VW buyers receive from the ID.3, for example.
The group simply doesn’t have a car on offer that meets the criteria for maximum e-car financing. The EQC battery-powered SUV is too expensive for this with a list price of € 59,900. In addition, Mercedes only offers the eVito and EQV minibuses and a variant of the Sprinter delivery van with battery-only driving.
Therefore, the 10,000 cars with electric motors sold were largely plug-in hybrids. Mercedes currently has 35 variants on offer, all of which are modifications of existing gasoline or diesel models, for example, of the A, B, C or E-Class.
Smaller, cheaper vehicles are likely to lose importance at Mercedes for years to come. It is true that Källenius did not announce the end of the A-Class, something about which has already been speculated. However, it is clear that many variants of the individual cars will no longer be offered in the future.
The Daimler boss’s goal is to make Mercedes a luxury brand. To this end, it has identified AMG, Maybach, EQ and G as sub-brands that can generate particularly high returns. “First profits, then volume,” says the CEO as his motto. That means: instead of ten Mercedes A-Class, two EQS will be sold in the future. The group earns more from this, and it fits better with the line of a luxury brand.
