Acknowledging that its electrification goals were too aggressive, Mercedes reinvested heavily in the internal combustion engine. In an interview with the German media Wirtschaftsweek, the CEO of the German auto giant, Kang Linsong, said that internal combustion engine technology "will continue until the 2030s". Therefore, in order to ensure that internal combustion engines comply with increasingly stringent emission regulations, they must scale up their investments.
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This year alone, the company has invested 14 billion euros in the passenger car sector, which will be used not only for "high-tech internal combustion engine technology", but also for electrification and digitalization. Although the Swedish-born Mercedes-Benz executive did not specify exactly how much money they spent on the internal combustion engine, he said it was "more than previously planned".
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Kang Linsong mentioned that the mid-term facelift of Mercedes-Benz's S-Class and flagship models will take place in 2026: "We have invested much more money in the facelift of the S-Class with internal combustion engines than in previous similar upgrades. Mercedes-Benz's goal is to bring its internal combustion engine up to the "highest level of technology". Without investing huge sums of money in petrol and diesel engines, the luxury automaker "will face a situation where it will only be able to sell electric vehicles in 2027 or 2028."
He was referring to Euro 7 and China's China VII emissions. Without these regulations, Mercedes-Benz will not be able to continue producing internal combustion engines. Therefore, Mercedes-Benz's goal now is to adjust all "models that use internal combustion engines and conventional transmissions to avoid hefty fines." Kang also mentioned that the powertrain will be electrified to a certain extent in the future, so there will be more hybrid models.
Mercedes-Benz is well aware that the transition to electric vehicles is not going as planned, so it has to adjust its strategy in time. Three years ago, they vowed that plug-in hybrids and electric models would account for about 50% of their annual sales by 2025, and even announced that by 2030 they would be fully electric in certain countries where "market conditions allow".
Although the face was smacked, Mercedes-Benz had no choice but to pick up the internal combustion engine business again. They now hope that by 2030, hybrids and electric vehicles will account for 50% of total deliveries. Kang Linsong said that the ultimate goal of achieving carbon neutrality by 2040 has not changed.
Separately, he refuted rumors that Mercedes-Benz would cancel the development of the next-generation EQS platform: "The project is running at high speed. In addition, Mercedes-Benz has not given up on its commitment to build eight gigafactories that will be used to produce batteries to support their ambitious goal of electric vehicles. However, these plants will be completed "a little later" than originally planned.
Now that the EQS has been mentioned, there was an interesting report earlier this year about Mercedes-Benz testing a luxury electric vehicle with a range-extended internal combustion engine. The large electric vehicle is said to have a 1.0-liter twin-cylinder turbocharged engine up front, but development is said to have been discontinued.
But Mercedes did strike a deal with Geely to jointly develop a hybrid internal combustion engine, which will also be used in Volvo models. Li Shufu's company has expertise in range extenders, including a separate partnership with Renault. Let's not forget that Geely itself is the largest single shareholder of Mercedes-Benz's parent company, Daimler, and the newly formed Horse division specializes in internal combustion engines, including those developed for range extenders.