Mercedes-Benz Weighs ICE Vehicles Over EVs

Mercedes-Benz may be shifting focus once again. According to recent sales data, electric vehicles have seen a decrease in demand. This has prompted many automakers including Mercedes-Benz to redirect their strategy. Initially, Mercedes predicted that hybrids and EVs would account for nearly half of its yearly sales by 2025. In the wake of slowing EV demand, the German automaker is planning on redirecting funding toward internal combustion vehicles. The new goal is to have hybrids and EVs account for half of yearly sales by 2030. We’ll dive further into Mercedes’ new plans but so far, it’s looking like consumers can expect more focus on ICEs.

Mercedes-Benz Targets ICEs Over EVs

In the wake of recent EV sales data, Mercedes-Benz is shifting its strategy. The German automaker initially estimated that EVs and hybrid vehicles would account for half of its yearly sales by 2025. Due to decreasing EV demand, Mercedes is planning on redirecting funding toward internal combustion vehicles rather than EVs. The automaker’s new estimate is that EVs and hybrids will account for half of yearly sales by 2030. This shift in focus comes from several factors including the capital costs surrounding EVs. Consumers have been hesitant to purchase EVs due to higher MSRPs. Reinforcing this hesitancy is the sharp decline in used EV prices over the past few months. 

Another factor contributing to Mercedes’ shift in strategy involves policies surrounding EVs. As US elections loom nearer, it’s uncertain whether the larger focus on EV legislation and sustainability will continue. Finally, the lack of EV infrastructure like charging stations has caused many would-be buyers to reconsider their decision. Mercedes-Benz has spent a significant amount on building EV infrastructure in the Southeast US but it is a huge time commitment. The German automaker will still spend capital on EVs but ICE vehicles will become a larger priority.

Merecedes-Benz plans to invest upwards of $15 billion in its passenger car sector this year. The automaker has stated that funds will go toward high-tech combustion technology. The Mercedes S-Class for example will see a mid-cycle upgrade. While combustion engines will be in focus, Mercedes will still abide by emission laws set in place. These laws are stricter in places like the EU so the German automaker will need to make adjustments. Fans of traditional ICE vehicles can rejoice, but that’s not to say that those interested in hybrids and EVs will not have something to look forward to.

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Photo Credit: Mercedes-Benz