Mercedes-Benz maker Daimler plans to invest more than €40-billion (R700-billion) by 2030 to be ready to take on Tesla in an all-electric car market, but warned the shift in technology will lead to job cuts.
Outlining its strategy for an electric future, the inventor of the modern motor car said on Thursday it will, with partners, build eight battery plants as it ramps up electric vehicle production. From 2025, all new vehicle platforms will only make EVs, the German luxury car manufacturer added.
“We really want to go for it … and be dominantly electric, if not all-electric, by the end of the decade,” CEO Ola Källenius said, adding that spending on traditional combustion-engine technology will be “close to zero” by 2025.
However, Daimler — to be renamed Mercedes-Benz as part of plans to spin off its trucks division later this year — stopped short of giving a hard deadline for ending sales of fossil-fuel cars.
Some car makers, like Geely-owned Volvo Cars, have committed to going all electric by 2030, while General Motors said it aspires to be fully electric by 2035, as they all try to close the gap to industry leader Tesla.
“We need to move the debate away from when you build the last combustion engine because it’s not relevant,” Källenius said. “The question is how quickly can you scale up to being close to 100% electric and that’s what we’re focusing on.”
Daimler shares rose as much as 2.5% after the news, which comes just over a week after the European Union proposed an effective ban on the sale of new petrol and diesel cars from 2035 as part of a broad package of measures to combat global warming.
Ahead of the EU’s announcement, car makers had announced a series of major investments in EVs. Earlier this month, Stellantis said it would invest more than €30-billion by 2025 on electrifying its line-up.
At Mercedes-Benz, the shift will see an 80% drop in investments into combustion engines and plug-in hybrid technologies between 2019 and 2026, which the group said would have a direct impact on jobs. EVs have fewer components and so require fewer workers than combustion engine vehicles.
“A transformation of our workforce will involve tough decisions. Yes, overall we must and will reduce our personal costs,” Mercedes-Benz management board member and head of human resources Sabine Kohleisen said.
Daimler said that as of 2025, it expects electric and hybrid electric cars will make up 50% of sales — with all-electric cars expected to account for most of that — earlier than its previous forecast that this would happen by 2030.
The car maker will unveil three electric platforms — one to cover its range of passenger cars and SUVs, one for vans and one for high-performance vehicles — that will be launched in 2025. Daimler is also acquiring British firm YASA Limited to help develop high-performance electric motors.
The company said it will build 200GWh of battery-cell capacity. Four of its new battery plants will be in Europe and one in the US. Daimler said it will announce new European partners for its battery production plans soon. The EU has been pushing hard to build battery capacity to counter China’s dominance of battery production. (Rival Volkswagen plans to build half a dozen battery-cell plants in Europe.)
Daimler said that as part of its electrification strategy, it will build a battery recycling plant in Kuppenheim, Germany, which will start operations in 2023. — Reported by Nick Carey, with additional reporting by Joe White, Ilona Wissenbach and Christoph Steitz, (c) 2021 Reuters