Ola Kallenius, the CEO and chairman of Mercedes-Benz's parent company, Daimler, stated in an interview with the Financial Times that the business around internal combustion engine (ICE) vehicles is very robust and allows it to fund projects around electrification. He said it is not clear if electric cars would kill ICE cars by 2030."I think it's too early to definitively say what the market is going to look like in 2030, but it's our job to put ourselves in a position to address that market. Our combustion engine business is extremely robust and produces cash flows that we invest in the future," he said in the interview.
The EQS is an electric S-Class which is the first Mercedes branded EV in the US
Kallenius has accelerated the push towards electrification with the Daimler group being said to be rebranded to just Mercedes Benz. Under Kallenius, the EQ brand of EVs was created and as the group prepares itself for a zero-emissions future, the main focus for the brand that invented the automobile is to make the best luxury cars in the world.
The EQC is the electric cross-over that Mercedes has also launched in India
Even though Mercedes has outlined an EV first future, ICE based vehicles for the group are critical from a cash-flow perspective as they are the ones that move in volumes and are highly profitable. This creates a virtuous cycle of cash flow which is reinvested in developing vehicles -- electric vehicles -- for the future.
The balanced nature of the approach Kallenius talks about is in stark contrast to other manufacturers which are going all-in on electric vehicles before 2030. Recently, Jaguar joined the bandwagon, but it seems under Kallenius the iconic three-pointed silver star will take a more cautious approach.
This makes sense as Mercedes takes baby steps towards electrification but it has some way to go to catch up with the likes of Tesla in terms of battery and autonomous technology.
