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Mercedes-Benz on Thursday toned down expectations on electric vehicle demand and said it will update its combustion engine lineup well into next decade, becoming the latest carmaker to flag a slower than expected appetite for battery-powered cars.<\/p>\n
The company now expects sales of electrified vehicles, including hybrids, to account for up to 50 per cent of the total by 2030, a major step back from a previous ambition to prepare for all-electric sales by 2030, which was tied to the condition of favourable market conditions.CEO Ola Kaellenius cautioned towards the end of last year that even Europe would likely not be ready by 2030 for an all-electric lineup, with multiple studies showing customers were holding back for a range of reasons including a lack of charging infrastructure and appealing electric models.Kaellenius said Mercedes-Benz (MBGn.DE) wanted customers and investors to know it was well-positioned to carry on producing combustion engine cars and was ready to update the technology well into next decade.Its current plans for updates mean \u201cit is almost like we will have a new lineup in 2027 that will take us well into the 2030s,\u201d Kaellenius said.Shares in the luxury carmaker were up 5.9 per cent following the news, also supported by a 3 billion euro ($3.3 billion) share buyback programme unveiled late on Wednesday.UNCERTAINTY AHEAD<\/strong>While automakers and suppliers are betting big on future demand for electric vehicles, investment in capacity and technology development has outrun actual EV demand, boosting pressure on companies to cut costs.Slower economic growth, supply chain bottlenecks, and trade tensions between China and both the US and European Union also weighed on Mercedes-Benz\u2019s outlook for 2024, the carmaker said, forecasting lower returns on sales across its car and van division.First-quarter sales are likely to be below the previous year\u2019s level, it said.Electrified vehicle sales, including of hybrids, were expected to remain at approximately 19-21 per cent of the total, Mercedes-Benz said, in line with reports across the industry of slower growth in EV demand.The luxury car maker reported an adjusted return on sales in its car division of 12.6 per cent for 2023, in line with its forecast, as inflation and supply chain-related costs as well as component shortages ate into its profits.For 2024, it said it expected a lower adjusted return of 10-12 per cent for cars and 12-14 per cent for vans, down from last year\u2019s 15.1 per cent.The company raised its average price by 2 per cent to 74,200 euros, and increased spending on research and development for future technologies such as its MB.OS platform.Group earnings before interest and taxes fell to 19.7 billion euros from 20.5 billion euros last year despite a 2 per cent rise in revenue.($1 = 0.9223 euros)Follow the Mercedes-Benz has revised its electric vehicle (EV) demand expectations, now anticipating that electrified vehicles, including hybrids, will make up to 50% of its sales by 2030. This adjustment marks a significant shift from its earlier goal of preparing for all-electric sales by the same year, contingent on favorable market conditions. CEO Ola Kaellenius highlighted challenges such as inadequate charging infrastructure and a lack of appealing electric models as reasons for the slower transition to EVs. Consequently, Mercedes-Benz plans to continue producing combustion engine cars and update its technology into the next decade, with a refreshed lineup expected in 2027. Following this announcement, the company’s shares increased by 5.9%, further buoyed by a 3 billion euro share buyback program. Despite the automotive industry’s investment in EVs, actual demand has not met expectations, leading to increased cost-cutting pressures. Mercedes-Benz also cited slower economic growth, supply chain issues, and geopolitical tensions as factors affecting its 2024 outlook, predicting lower sales returns. For 2023, the company reported an adjusted return on sales of 12.6% in its car division, meeting its forecast despite inflation and supply chain challenges. However, it anticipates a lower adjusted return of 10-12% for cars and 12-14% for vans in 2024. Additionally, Mercedes-Benz raised its average vehicle price to 74,200 euros and increased its research and development spending, particularly on its MB.OS platform. Group earnings before interest and taxes decreased to 19.7 billion euros from 20.5 billion euros the previous year, even as revenue rose by 2%.<\/p>\n","protected":false},"author":3,"featured_media":3196,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[810,186,189,486,33,3,641,645,599,201,308,250,67,187,468,380],"class_list":["post-3195","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyprus","tag-battery","tag-business","tag-businesspick","tag-china","tag-companies","tag-cyprus","tag-earnings","tag-economic-growth","tag-euro","tag-europe","tag-geopolitical","tag-google","tag-inflation","tag-international","tag-tensions","tag-us"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n
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