Famed German automaker Mercedes-Benz is the latest manufacturer to scale back its electrification plans and says it will continue to develop gasoline- and diesel-powered engines for the foreseeable future.The company had previously planned to convert its entire fleet of production vehicles to fully electric or hybrid electric electric cars by 2030. But in its annual report released Thursday, the iconic car maker said it has doubts that any region of the world will have the necessary infrastructure to support all electric car fleets.Now it expects only 50% of its sales will be electric by the end of the decade..The company’s share price rose 6% on the news.While it says it is still taking the necessary steps to go all-electric, it also "plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s."And that could be pushed back even further.“Unexpected developments may arise in particular from geopolitical events and trade policy,” Mercedes-Benz said in the statement. “Further supply chain disruptions and in particular, availability bottlenecks for critical components, remain a significant risk factor,” it added.It said its customers would “set the pace” of how much of its fleet will be electric or gas. In other words, it’s prepared to allow the internal combustion engine to die a natural death and will continue to make them as long as customers want and keep buying them..“It's not going to be 100% in 2030, obviously... from the whole European market, but probably from the Mercedes side as well,"Mercedes CEO Ola Kaellenius.Mercedes expects its EV sales to account for about 19% to 21% of new car sales this year.Last September, CEO Ola Kaellenius told Reuters at the Munich car show it is targetting all-electric sales by 2030 "where markets allow", saying customers will ultimately decide what product they want and pointing to the need for infrastructure to support the transition to EVs.“It's not going to be 100% in 2030, obviously... from the whole European market, but probably from the Mercedes side as well," he said.It comes as EV sales momentum slows amid bulging inventories, flagging demand and the perception that the vehicles are simply too expensive, unreliable and nearly impossible to repair. That’s not withstanding the lack of public charging infrastructure, even in major cites much less remote and isolated areas.Although EV sales rose 31% globally last year, it was only half the growth rate recorded in 2022.Established car makers such as Ford and General Motors have already backed off overly ambitious EV plans and cut production. Tesla has struggled to reduce costs and cut staff. .Even in Europe, automakers like Volkswagen have slashed output targets and shuttered assembly lines after the German government reduced subsidies and incentives for new buyers.
Famed German automaker Mercedes-Benz is the latest manufacturer to scale back its electrification plans and says it will continue to develop gasoline- and diesel-powered engines for the foreseeable future.The company had previously planned to convert its entire fleet of production vehicles to fully electric or hybrid electric electric cars by 2030. But in its annual report released Thursday, the iconic car maker said it has doubts that any region of the world will have the necessary infrastructure to support all electric car fleets.Now it expects only 50% of its sales will be electric by the end of the decade..The company’s share price rose 6% on the news.While it says it is still taking the necessary steps to go all-electric, it also "plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s."And that could be pushed back even further.“Unexpected developments may arise in particular from geopolitical events and trade policy,” Mercedes-Benz said in the statement. “Further supply chain disruptions and in particular, availability bottlenecks for critical components, remain a significant risk factor,” it added.It said its customers would “set the pace” of how much of its fleet will be electric or gas. In other words, it’s prepared to allow the internal combustion engine to die a natural death and will continue to make them as long as customers want and keep buying them..“It's not going to be 100% in 2030, obviously... from the whole European market, but probably from the Mercedes side as well,"Mercedes CEO Ola Kaellenius.Mercedes expects its EV sales to account for about 19% to 21% of new car sales this year.Last September, CEO Ola Kaellenius told Reuters at the Munich car show it is targetting all-electric sales by 2030 "where markets allow", saying customers will ultimately decide what product they want and pointing to the need for infrastructure to support the transition to EVs.“It's not going to be 100% in 2030, obviously... from the whole European market, but probably from the Mercedes side as well," he said.It comes as EV sales momentum slows amid bulging inventories, flagging demand and the perception that the vehicles are simply too expensive, unreliable and nearly impossible to repair. That’s not withstanding the lack of public charging infrastructure, even in major cites much less remote and isolated areas.Although EV sales rose 31% globally last year, it was only half the growth rate recorded in 2022.Established car makers such as Ford and General Motors have already backed off overly ambitious EV plans and cut production. Tesla has struggled to reduce costs and cut staff. .Even in Europe, automakers like Volkswagen have slashed output targets and shuttered assembly lines after the German government reduced subsidies and incentives for new buyers.
