Mercedes halts development of electric car platforms

Last week we saw how European manufacturers adjust their industrial policies in the face of the slowdown in electric vehicle sales. One of them, Mercedes. The CEO of the Mercedes-Benz group, Ola Kallenius, stated in February that the goal of manufacturing only electric cars by 2030 could not be achieved under current market conditions, as demand would not keep pace.

Mercedes therefore hopes to develop electric and internal combustion cars in parallel for longer, well into the 2030s. Its pace of transformation will be determined by market conditions and the wishes of its customers. In fact, Kallenius said last week that “models with internal combustion engines could be sold well into the 30s if there is sufficient demand.”

How does this affect future models?

To begin with, Mercedes-Benz has stopped, according to the German economic newspaper Handelsblatt, the development of the all-electric platform MB.EA Large for models such as the S-Class and E-Class. With the transition to electric vehicles slowed, the development costs of electric vehicles are increasing. That architecture was planned for 2028, but now the current EVA2 electric vehicle architecture will continue to be developed. For now it still plans to launch an electric G-Class, after presenting it at the Beijing Motor Show in April.

In the first quarter the company announced a 30% drop in earnings before interest and taxes. The expenses of its MB OS operating system are growing, Chinese competitors do not stop and at the same time it is reviewing its sales model, moving to an agency model in which it is the manufacturer who controls the stock and offers fixed prices online.

The electric price war affects margins and since electric sales were not paralyzed, brands “began to be a little afraid and are now backtracking on their initial commitments to electrification,” says Pedro Pacheco, Gartner analyst.

The result is to go on the defensive, returning to the traditional market and squeezing more from that known and dominated source of income. It remains to be seen if any of the traditional manufacturers dare to take more risks and how buyers and investors will view manufacturers betting on two different product categories. It must be taken into account that Germany, the largest European market, has withdrawn incentives and aid for electric cars… and that if they are implemented again they could change the panorama.

Via: Handelsblatt

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