Mercedes-Benz admits that its previous electrification targets were too high, and will now invest heavily in internal combustion engine technology. In an interview with Wirtschafts, CEO Ola Källenius said that internal combustion engine technology "will continue until the mid-to-late 2030s". Significant investments must be made to ensure that gasoline engines can meet increasingly stringent regulations.
This year, Mercedes-Benz has invested 14 billion euros (about 109 billion yuan) in its passenger car division alone. These funds are used for "high-tech combustion technologies", but also for electrification and digitalization. Although the Swedish-German executive did not specify how much Mercedes is investing in the internal combustion engine (ICE), he admits that it is more than originally planned.
Karenius mentions the S-Class and the mid-life facelift planned for 2026: "We are spending far more on model updates for the new internal combustion engine S-Class than we would normally spend on a facelift. Mercedes-Benz's goal is to bring its conventional powertrain up to the "highest level of technology". At the same time, Karenius also hinted that if the investment in internal combustion engines is reduced, it could have a negative impact on the company's internal combustion engine business, and may even lead to business stagnation.
He was referring to Euro 7 and China 7 emission standards, as well as the fact that engines must be updated to meet stricter emission regulations. Mercedes-Benz's goal was to adjust all the "relevant internal combustion engine and transmission combinations" and avoid paying hefty fines. Karenius mentioned that future engines will be electrified to some extent, so one can expect more hybrid models in the lineup.
Mercedes realized that since the transition to electric vehicles was not going as planned, they had to make changes now. Three years ago, the company said plug-in hybrids and battery electric vehicles would account for about 50% of its annual sales by 2025. However, this goal is likely to be unattainable. Previously, the company even said that in some countries where "market conditions allow", it will fully switch to electric vehicles by 2030.
Hit by reality, Mercedes had to readjust its aims. Now, it hopes that by 2030, hybrids and electric vehicles will account for half of deliveries. According to Karenius, the ultimate goal of achieving carbon neutrality by 2040 has not changed.
He refuted rumors about Mercedes-Benz canceling plans for the development of the next-generation EQS platform: "The project is progressing at a high speed. In addition, Mercedes-Benz has not abandoned plans to build eight large-scale battery factories that will support the development of its electric vehicles. But these facilities will be built "a little later" than originally planned.
Regarding the EQS, there was an interesting report earlier this year that Mercedes-Benz was testing its luxury electric model, the EQS, with a petrol engine that could extend the range. The large electric car is said to have a very small two-cylinder 1.0-litre turbocharged engine mounted at the front. However, the trial is said to have been stopped.
Mercedes-Benz has entered into a partnership with Geely Group to develop hybrid engines, which will also be used in Volvo models. Geely has expertise in range extenders, and Geely also has another independent collaboration with Renault, the newly formed Horse, which specializes in internal combustion engines.