Mercedes-Benz: Revises Strategy to All-electric

Expanding the Top-End segment and strengthening the development of autonomous driving

2024/12/06

Summary
Revised All-electric strategy
Luxury strategy: Aim to expand the Top-End segment in the mid- to long-term
New battery factories
Introduction and enhancement of autonomous driving
Business performance and future outlook
GlobalData Sales Forecast: Mercedes-Benz Group’s sales in 2027 will be 2.58 million units

Summary

“Electric G-Class” to be launched in Q4 2024
(Source: "G 580 with EQ Technology" press release)

In July 2021, the Mercedes-Benz Group announced that "by the end of the 2020s, all new cars sold by the Mercedes-Benz Group (in markets where possible) will be “EV-only," but in February 2024 the company revised that plan. The pace of electrification and the transition to all-electric (BEVs) will be determined by customer and market conditions, so the company will be tactically flexible and will continue to meet the needs for internal combustion engine vehicles well into the 2030s.

However, the company's strategic goal has consistently been to go "all-electric," and the plans it is currently implementing are intended to lay the prerequisites for an all-electric future. The strategy is based on profitable growth through the introduction of luxury EVs, and as part of this strategy, it will launch the Mercedes-AMG PureSpeed, the first in the ultra-luxury brand "Mythos" series, in 2025.

The company also announced plans to strengthen its battery supply system and increase energy density by using high-silicon anodes in batteries and using solid-state batteries.

In addition, the company plans to lead the market with digital experiences, in particular by strengthening its autonomous driving and driver assistance systems, introducing next-generation Level 2 autonomous driving, upgrading Level 3 autonomous driving, and conducting field testing of "Level 4 autonomous driving for privately owned cars" in Beijing from August 2024.

The Mercedes-Benz Group's financial performance results were solid in 2023, but in the January to June period of 2024, sales volume, revenue, EBIT, and net income were all lower compared to the same period last year. Furthermore, EBIT and net income fell by half in the July to September period. In September, the company lowered its full-year 2024 earnings forecast, lowering its operating profit margin for its Mercedes-Benz Cars division from 10-11% to 7.5-8.5%.

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