Mercedes re-invests more in ICE

Mercedes-Benz will once again invest more in combustion technology, Group CEO Ola Källenius told a German newspaper. The drivetrain of the hybridized combustion engines is to be “properly” reworked so that “it will last well into the 2030s.”

Mercedes-Benz is far behind schedule in terms of EV sales. As the general economic and regulatory conditions do not promise a boost, the Group changed course at the beginning of the year. Mercedes CEO Ola Källenius canceled his own EV target in 2030, announcing that the company would be running on two tracks (electric & combustion engine) for longer than previously planned.

Hybridized ICE

It was previously unclear to what extent the Stuttgart-based company would reinvest in combustion technologies as part of this. Källenius now told the German business magazine Wirtschaftswoche that Mercedes aims to revamp the hybridized combustion engine.

All “relevant combustion engines and transmission combinations” will comply with new regulations such as EU7 or China 7 to ensure the engines are always at the highest technological level.

Electric S-Class is coming

Nevertheless, Mercedes is sticking to its investments in electric cars, says Källenius. Rumors that the next electric S-Class has been discontinued are false. The plan for constructing battery cell factories also remains in place: “In total, we will still need eight gigafactories or a battery capacity of 200 gigawatt hours.” Only later than previously planned.

This ‘later’ also includes a recently announced cutback at Automotive Cells Company (ACC), the battery cell joint venture of Stellantis, Mercedes-Benz, and TotalEnergies. ACC is pausing construction work on its battery cell plants in Kaiserslautern, Germany, and Termoli, Italy.

Which platforms?

With his commitment to the electric S-Class, Källenius also responds to a rumor that became public in mid-May, according to which Mercedes is no longer developing its ‘MB.EA-Large’ electric platform. From 2028, the Stuttgart-based company wanted to electrify the new generation of its largest saloons and SUVs based on this architecture.

Citing four insiders, the German newspaper Handelsblatt wrote that the development has been put on ice. It would cost Mercedes “investments at least in the mid-single-digit billion range.” Handelsblatt did not deny that the electric S-Class was coming but raised the question of which platform it would be based on.

Insiders reported in May that, contrary to the original plans, the future large luxury electric vehicles will now be partly based on the existing 400-volt EVA2 architecture in the production process. According to earlier rumors, the EVA2 could be switched to an 800-volt system. However, this has not been confirmed.

No ‘electric only’ soon

Mercedes’ ‘electric only’ plans (in combination with the platform plans) date back to 2021, when Källenius announced the goal of only selling purely electric new cars from 2030 if possible – Mercedes wanted to become an electric brand “wherever market conditions allow.”

Since February, the new direction sounds completely different. “The company expects xEV sales to reach up to 50% of total sales in the decade’s second half. The Stuttgart-based company refers to BEVs and PHEVs as ‘xEVs’.

That means that instead of an almost 100% BEV share in 2030, the car manufacturer assumes that the share of BEV and PHEV in total sales will be no more than half by the end of the decade. In his interview with Wirtschaftswoche, Källenius now speaks of 50% electric cars and 50% hybrids, which are referred to as high-tech combustion engines in Mercedes jargon.