Mercedes-Benz Targets an All-Electric Future
Not only is the German premium luxury automaker Mercedes-Benz planning on going all electric by the end of the decade, but it is also focused on an emissions-free future. By 2022, Mercedes-Benz will have battery electric vehicles in all segments that the company serves. From 2025 onwards, all newly launched vehicle architectures will be electric-only and customers will be able to choose an all-electric alternative for every model the company makes. Mercedes-Benz intends to manage this accelerated transformation while sticking to its profitability targets.
The Tipping Point
“The EV shift is picking up speed - especially in the luxury segment, where Mercedes-Benz belongs. The tipping point is getting closer, and we will be ready as markets switch to electric-only by the end of this decade,” says Mercedes Benz CEO Ola Källenius. “This step marks a profound reallocation of capital. By managing this faster transformation while safeguarding our profitability targets, we will ensure the enduring success of Mercedes-Benz. Thanks to our highly qualified and motivated workforce, I am convinced that we will be successful in this exciting new era.”
To make all this happen, Mercedes-Benz has unveiled a comprehensive plan which includes significantly accelerating research and development. In total, the company’s investments into battery electric vehicles between 2022 and 2030 will amount to over €40 billion. In 2025, Mercedes-Benz will roll out three all-electric vehicle architectures including a scalable modular system for medium to large passenger cars, a performance AMG platform and light commercial vehicles such as cargo vans.
Increased Vertical Integration
Mercedes-Benz will deepen the level of vertical integration in manufacturing and development by insourcing electric drive technology. This step includes the acquisition of UK based electric motor company YASA. With this deal, Mercedes-Benz gains access to unique axial flux motor technology and expertise to develop next generation, ultra-high-performance motors. In-house electric motors, such as the eATS 2.0, will play a key part of the overall strategy with a clear focus on efficiency.
The automaker plans to set up eight Gigafactories for producing battery cells together with its partners around the world. This is in addition to the already planned network of nine plants dedicated to building battery systems. Next generation batteries will be highly standardized and suitable for use in more than 90 percent of all Mercedes-Benz cars and vans. These next gen battery packs are said to offer a driving range of over 600 miles on a single charge.
New Charging Standards
When it comes to charging, Mercedes-Benz is also working on setting new standards in charging: “Plug & Charge” will allow customers to plug-in, charge and unplug without extra steps needed for authentication and payment processing. Plug & Charge will go live with the market launch of the EQS later this year in 2021. Mercedes already has one of the world's largest charging networks and is currently comprised of more than 530,000 AC and DC charging points worldwide. Plus, Mercedes is working with Shell to expand the charging network with access to Shell’s Recharge network consisting of over 30,000 charge points by 2025 in Europe, China, and North America.
Global Production Network
Mercedes-Benz is preparing its global production network for electric-only output alongside the ramp up pace designed to follow market demand. Thanks to early investments into flexible manufacturing, and its state-of-the art MO360 production system, Mercedes-Benz can mass produce EVs right now.
As soon as 2022, eight Mercedes-Benz electric vehicles will be produced at seven locations on three continents. All passenger car and battery assembly sites will switch to carbon neutral production by 2022. To enhance manufacturing efficiency, Mercedes-Benz is joining forces with GROB, a German global leader in highly innovative battery production and automation systems, strengthening its battery production capacity. Mercedes-Benz will also open a new battery recycling factory in Kuppenheim, Germany.
Regarding financial plans, Mercedes-Benz remains committed to the margin targets outlined in fall 2020. Last year’s targets were based on the assumption of selling 25 percent hybrid and electric vehicles by 2025. Current goals are based on an assumed EV share of up to 50 percent by 2025 and increased net revenue per unit by raising the proportion of high-end electric vehicles such as Mercedes-AMG models, while at the same time taking more direct control over pricing and sales. Investments into combustion engines and plug-in hybrid technologies will drop by 80 percent between now and 2026.
“Our main duty in this transformation is to convince customers to make the switch with compelling products. For Mercedes-Benz, the trailblazing EQS flagship is only the beginning of this new era,” Källenius recently told automotive press.