Mercedes-Benz is trying to improve its sluggish BEV sales, especially in China, but also in other markets. The answer of CEO Ola Kälenius and his management team is to heighten the investments. “Sales may be slow for the moment; changing strategy would be really dangerous,” he says in an interview with the German Handelsblatt.
According to an interview in other German media, the automaker is adapting already developed models for China to meet the needs of Chinese customers better. In an interview, Ola Källenius also reaffirmed the China focus of his strategy.
Included in the article in Automobielwoche was not only an interview with the company CEO. There were also quotes from a ‘high-ranking Mercedes manager’ who revealed future models based on the upcoming MB.EA electric platform are currently being revised. The aim is to “better meet the needs of Chinese customers in terms of space or digital content in the future.”
In the interview, Group CEO Ola Källenius emphasized the focus on the Chinese market, “For our next wave of the electric offensive, which will start in 2025 with the new E-architectures, China is absolutely central. We have to master the electric drive just as perfectly as digitalization. That’s what our customers expect.”
Mercedes has seen disappointing sales results in China, where the company’s BEV sales in the first half of this year are “significantly below” its global average of 10%, according to Automobilwoche. Between January and May, Mercedes only sold 6 900 BEVs in China, while they sold 56 300 in the first half of the year worldwide.
In the German automaker’s report on the half-year sales for 2023, Mercedes did not mention its BEV share in China, merely reporting growth in China with 486 900 units (+7%) and increased sales in the E-Class (+43%) and the GLB (+77%), both combustion models.
Although Mercedes had seriously reduced prices for the EQE and EQS in China at the end of 2022, Källenius now says he doesn’t want to engage in further discount battles. “You can always buy market share, but in terms of profitable growth, strategic patience is necessary here,” he explained. “Most of the growth in electric cars in China has been in the entry-level and volume segments. That’s also where most of the funding flowed.”
At the same time, competition from Chinese manufacturers is also growing in the premium segment, where BYD offers the Han EV, Nio the ET7, and the Chinese carmaker Human Horizons is also aiming for the luxury class with its HiPhi X and Z models, just to name just a few examples. And, of course, there are other BEV manufacturers on the global market: Tesla is the one that stands out, but many are coming.
“The competitive situation and innovative power in China must be taken seriously. At the same time, we are self-confident and don’t let ourselves go crazy,” says Källenius. “I promise you: there will be more models from Mercedes that you can’t get past. Of course, we also want to defend and expand our technological lead in the future.”
The Mercedes boss did not want to comment on a concrete end-of-production timing for the last combustion engine models. “What is important for us is strategic clarity. This starts with our 2039 ambition for CO2-neutral new cars throughout the entire supply chain.”
“We want to cover all segments fully electrically by the end of this decade, so we are focusing investments on new E-architectures from 2025. Nevertheless, we have tactical flexibility if it takes longer. Our plants around the globe are designed to produce all types of powertrains.”
In the meantime, Mercedes-Benz has adjusted its goal to reach half of its sales with electrified cars (BEVs and PHEVs). This won’t be in 2025 anymore, but the target has been adjusted to a year later, 2026.