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Mercedes, 60 billion investments by 2026 to become a 100% electric brand

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The future is the electric car. Didn’t you understand yet? Daimler’s Supervisory Board approved Mercedes-Benz’s 2022-2026 business plan, endorsing the goal of becoming a 100% electric brand. Following the spin-off of Daimler Truck, scheduled for December 10th, Mercedes-Benz will constantly focus on profit and growth opportunities in the passenger car and van sector. For the transformation into a software-driven, zero-emissions future, the Council has signed an investment plan of over € 60 billion. The plan includes some of the € 40 billion already committed to electrify the Mercedes range over the course of the decade.

Although the Stuttgart giant had planned to reduce investments, the R&D expenditures for electrification of the range and digitization measures, including autonomous driving, will remain at a high level. Daimler and Mercedes-Benz CEO Ola Källenius said: “Our aim is technological leadership in the luxury automotive segment and in the premium van area, while remaining true to our ambitious margin targets. Mercedes-Benz has what it takes: a clear strategy, a highly qualified and motivated team, as well as strong support from the entire Supervisory Board ».

“With cars – added the Swedish manager at the helm of the group since 2019 – we want to grow profitably and create sustainable value for our customers, employees, shareholders and partners”. The board’s approval of the Mercedes business plan reinforces the company’s commitment to sustainably achieve the margin targets communicated in October 2020 and reaffirmed last July, including the accelerated transformation towards an all-electric era. An important lever to achieve this is to increase net revenues per vehicle. Additionally, the company is looking for a gradual shift to a direct selling model that includes price controls. Increased revenue from digital services will further support the results.

Mercedes plans to launch three new all-electric vehicle platforms in 2025 and set up eight battery factories with partners, the company said in a strategic update in July. Mercedes is betting that the luxury segment will move faster to battery-powered cars than the mass market due to increased customer purchasing power. And in fact, it’s already happening during the chip crisis, with premium models largely supporting the manufacturers’ accounts.

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After years of criticism of the accumulated delays, this year the German manufacturer has given a decisive acceleration to the plans with the launch of the EQS, the electric version of its S-Class flagship. Mercedes has said it expects plug-in hybrid cars and fully electric will represent more than half of global car sales by 2025. And it could be a success as long as, as this year’s accounts testify, as long as incidents such as the sensational flop of the EQC, launched perhaps too much hastily in 2019 without being able to guarantee adequate standards, especially in terms of autonomy and recharging.

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