Mercedes is backtracking on its plans to sell only EVs by 2030. Photo by VCG/VCG via Getty Images
Last week, Mercedes-Benz revealed that it will now delay its goal of becoming an electric vehicle-only brand by 2030. The firm added that it will continue to produce internal combustion-engined cars and hybrids well into the next decade.
Spurred on by weaker than expected demand for EVs, this about-face was the most recent indication that the global car industry is growing increasingly pessimistic about an all-electric future. Last month, Renault shelved plans to list its EV business Ampere because of sluggish stock market conditions. GM also cut EV production targets due to slowing demand.
Mercedes-Benz’s CEO Ola Kallenius says that his company will adopt a flexible strategy as it reacts to “peaks and troughs” in the transition towards EVs.
A mere three years ago, Mercedes expressed great optimism regarding plug-in powertrains, declaring that it will exclusively sell electric vehicles by 2030. The firm stated at the time that it would phase out gas-powered cars completely, with the proviso that it would only do so "where markets allowed.”
In related news, Toyota chairman, Akio Toyoda recently reiterated his firm’s goal that it would not alter its chosen plan to produce a “mix” of powertrains—including hybrids, hydrogen-powered fuel cells and EVs— according to market demand.
Over the past few years, Toyota had received flack from the auto industry and media for its reluctance to launch a wider selection of EVs, while continuing to build its sizable lineup around hybrids. Given Mercedes’ latest announcement, it would seem as though Toyota is vindicated for its stubbornness to switch to EVs.
Meanwhile, Mercedes says that it now only anticipates 50% of its sales to be all-electric, down from a much more optimistic forecast in its fourth quarter financial release. The company's future will continue to include gasoline and hybrid cars for some time to come.
Mercedes stated in its research that "market conditions and customers will set the pace of transformation. The company intends to be in a position to serve a variety of consumer needs well into the 2030s, whether those needs involve an electrified combustion engine or an all-electric drivetrain.”
Ola Källenius’ remarks represent the most caution that an auto CEO has shown over the future of electric vehicles. Rivian and Lucid, two carmakers that only sell EVs, stated that they anticipate flat production this year, while Elon Musk, CEO of Tesla, cautioned that the company is anticipating much slower sales growth in 2024. Some businesses, such as Ford and GM, have cancelled models or postponed building new factories in response to growth slowdown.
In the US, EV sales accounted for approximately 8% of overall sales last year, while in Europe, they made up 13%. While customers' concerns regarding charging time and reliability persist, sales are still rising despite their growing price sensitivity.
As charging infrastructure grows, more individuals are realising the value of hedging their bets, which has resulted in a notable increase in hybrid sales.
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