Daimler's carbon-neutral strategy: PHVs and EVs expected to account for 50% of car sales by 2030

Launching six EQ sub-brand models by 2022, building global battery production network

2021/07/09

Summary
Electrification strategy: Achieving carbon-neutrality along entire supply chain in 2039
EQS and EQE on new large-car EVA platform set for launch from 2021
Building global production network for EV batteries, partnering with battery makers
Daimler to spin off Daimler Truck, rename itself as Mercedes-Benz
Earnings grow significantly in Q1 2021 due to recovery from COVID-19 pandemic and strong portfolio
Revenue grows 16% for Cars & Vans, remains unchanged for Trucks & Buses, and declines slightly for Mobility Service
China market driving sales for passenger car sector
Production forecast by LMC Automotive: Daimler Group’s production expected to be 3.16 million units in 2024

Summary

Daimler aims to achieve carbon-neutrality along the entire supply chain by 2039 based on its midterm business plan “Ambition 2039”. As a part of the plan, the automaker will accelerate its electrification strategy, targeting more than 50% of new car sales as PHVs and EVs by 2030. Mercedes-Benz announced its intention to lead the industry in electric drive and in-vehicle software in its new strategy unveiled in October 2020.

According to its electrification strategy, Mercedes-Benz plans to launch six EQ sub-brand EV models by 2022. Following the EQC which had been already released, the EQA and EQB compact SUVs were launched. In 2021, its new large-car Electric Vehicle Architecture platform is scheduled to be introduced and used by the EQS large sedan, EQE midsize sedan, and their SUV variants.

Regarding batteries, EVs’ most important component, Daimler is building a global production network of its nine battery plants in Europe, North America and Asia. The automaker will also cooperate with the Chinese battery manufacturers Farasis and Contemporary Amperex Technology (CATL) in the development and supply of batteries.

Daimler plans a spin-off of its trucks & buses business and a separate listing of Daimler Truck by the end of 2021. Daimler will rename itself as Mercedes-Benz which focuses on the luxury car business. Separation of its passenger car and commercial vehicle businesses allow them to operate faster, invest more ambitiously, and target growth and cooperation. Daimler plans to split Daimler Mobility and assign resources and teams from it to both businesses to support their respective mobility services.

The Daimler Group’s unit sales for Q1 2021 increased by 13.1% year-over-year (y/y) to 730,000 units. Of this, Mercedes-Benz Cars & Vans’ sales grew by 14.7% y/y to 630,000 units while Daimler Trucks & Buses’ sales increased by 3.8% y/y to 100,000 units. Daimler attributed sales growth to global economic recovery from the COVID-19 pandemic and its strong portfolio.

According to its outlook for 2021 announced in April 2021, the Daimler Group forecasts that global vehicle demand will be strong and the company’s unit sales are expected to increase significantly from the previous year. The Group’s revenue and EBIT are also anticipated to exceed the prior-year level significantly.