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Mercedes Confirms Decision to Bid Farewell to Electric Cars Until 2030

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Mercedes Confirms Decision to Bid Farewell to Electric Cars Until 2030

Mercedes-Benz had stated up until a few months ago that the company would need an estimated 40 million euros of investment to go all-electric in 2030. However, the German company recently confirmed that it will continue to sell combustion engines for as long as necessary.

According to Ola Källenius, CEO of Mercedes, perhaps there was too much optimism in the whole industry. As the industry strikes with more realistic results, Mercedes will stick to its cutting-edge combustion engines. Källenius believes the automaker can produce electric and plug-in hybrid cars on the same line as very efficient combustion cars.

This shift in direction is probably the result of several issues, including the expensive development and production costs of electric vehicles, challenges with their driving range, and the dearth of infrastructure for charging them.

Cheaper gas cars over EVs in the United States

The German automaker declared that it would shift its attention to more affordable automobiles and increase the variety of combustion-powered cars in its inventory. According to the company, these two moves might allow it to surpass 300,000 sales in the US this year.

After COVID-19 several automakers started to adopt a margin-focus approach. Due to the limited supply, increasing demand, and frequently near-zero financing rates, producing high-end luxury cars was profitable for numerous brands. These days, that tactic is less successful because both supply and interest rates are rising.

Mercedes allegedly informed dealers in a meeting in January that it will alter its supply mix, putting more of an emphasis on affordable models and less on electric vehicles (EVs), to maintain sales levels. More entry-level vehicles like the GLC will be the first to be ordered.

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Mercedes-Benz betting on electric cars where it makes sense

To satisfy American consumers’ demand, it will also increase the manufacturing of combustion and hybrid vehicles. Moreover, Mercedes has notified its US dealers of plans to increase the availability of traditional combustion and hybrid vehicles this year, bringing 25 new and updated models to the market.

This includes expanding the lineup of S-Class and GLE models with plug-in hybrid variants, as well as introducing an electrified GLC crossover by the fall. Despite changing its approach, that doesn’t mean the German automaker will abandon its strategy in terms of electric cars since that would leave aside a great market opportunity.

Analysts seem to have a positive view of this change. According to Ivan Drury, Director of Edmunds Insights, you can only soar to such heights before losing contact with reality, as the past year has demonstrated. If buyers can afford to stick with the brand, entry-level cars give them a taste of what is to come.

Long-term commitment to electrification is uncertain

Although the company acknowledges the long-term potential of electric vehicles (EVs), it currently emphasizes a more flexible approach that puts profitability first and adjusts to the realities of the current market. This raises questions about Mercedes’ plans for electric cars in the future.

Uncertainty and concerns

Mercedes’ move to combustion engines could have a negative environmental impact and run counter to their long-term sustainability objectives. It is still quite difficult to strike a balance between environmental responsibility and profitability.

Although cost-effectiveness could draw in new clients, it is critical to comprehend how this tactic fits with changing consumer demands for environmentally friendly transit choices. The German automaker has not completely given up on electric cars.

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However, it is unknown how committed they will be to the technology going forward and when it will be widely adopted, which raises questions about their long-term plans for electrification.

Mercedes’s recent change in direction emphasizes how difficult it will be to provide more environmentally friendly transportation. Long-term success for the company will depend on its capacity to strike a balance between environmental stewardship and economic viability as well as adapt to changing market conditions.





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