Daimler is accelerating the transformation of its auto division into a provider fully geared towards electromobility.

Especially in the luxury segment, where Mercedes-Benz is at home, the transformation is gaining momentum, said Daimler CEO Ola Källenius when he presented his strategy update on Thursday.

From "Electric first" one is now switching to "Electric only".

Susanne Preuss

Business correspondent in Stuttgart.

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The Daimler boss, who has been in office for a good two years, started his presentation with an emotional video scene of a snowy electric Mercedes, recorded in Källenius' Swedish homeland - combined with the wish that such scenes in frost and ice should also be experienced in the future. “The whole world has woken up. We all have to change our behavior in the direction of a CO-neutral world, "said Källenius later in a conference call with journalists with a view to the EU's new climate rules, which stipulate that from 2035 practically no cars with internal combustion engines will be registered.

In contrast to other car managers, Källenius did not name a clear end date for the Mercedes internal combustion engine.

“We will be ready when the markets switch completely to electric cars by the end of the decade,” he promised.

The Daimler boss urged that at the same time everything had to be done by politicians to build the infrastructure for electromobility and also to provide CO2-neutral electricity.

Hard cuts announced

Mercedes-Benz alone will shoulder 40 billion euros in investments in this decade for the way into the electric age, explained CFO Harald Wilhelm. At the same time, spending on conventional technology is expected to decrease by 80 percent by 2026. Despite this exertion, the company is sticking to the previous promise of return, emphasized Wilhelm with a view to investors. Last autumn, the goal was to generate a margin in the low to mid single-digit percentage range in “normal times” (operating return on sales) and even a double-digit margin in good times, although electric cars may not be so profitable at first. In addition, the fixed costs are to be reduced significantly.

The transformation will not work without hard cuts in the personnel area, explained Sabine Kohlenisen, Mercedes’s chief human resources officer, but she promised that fair solutions would be found.

The measures had already been discussed with the works council last year.

More than 20,000 employees were trained in activities in the world of electromobility last year.

Maybach and G-Class electric too

Wilhelm emphasized that the return forecasts that have now been confirmed had been made on the assumption that the proportion of electrically powered cars (including plug-in hybrids) should reach 25 percent by 2025. This rate is now twice as high. In order to drive the innovation forward internally, Mercedes wants to introduce a car called EQXX as early as next year, which has a range of more than 1000 kilometers and a single-digit consumption value for kilowatt hours per 100 kilometers, "at motorway speed", as Kallenius said.

The developments from this concept car are to flow into the new platforms, which are to be purely electric from 2025 onwards.

Mercedes board member Britta Seeger announced three vehicle architectures, one for medium and large cars, one for vans and one for high-performance vehicles like AMG - a big step for this part of the automotive world, as Seeger admitted.

Maybach and the G-Class should also have an electric future.

Mercedes does not plan to use so-called synfuels as low-CO2 or CO2-neutral fuel, said Ola Källenius when asked.

However, he sees the development of such fuels as valuable because they can be used for example for existing vehicles with combustion engines and for other applications such as aviation.

The company's own battery cell production is also one of the major investment projects. Eight gigafactories are planned with a total capacity of more than 200 gigawatt hours, reported Källenius. Four of these are to be built in Europe, partly in partnerships that have apparently not yet been finally negotiated, one in America, where Mercedes-Benz assembles off-road vehicles and vans, the other three in Asia.

That is a significant change in strategy. Daimler had already got together with Evonik in 2008 and built a battery cell factory in Kamenz. The cells were mainly used for smart cars, which were electrified at an early age, but from a business point of view the project appeared to be a flop. Daimler also couldn't find a new partner when Evonik wanted to get out, and in the end - like the other European car manufacturers - they resorted to battery cells from traditional suppliers. Cells are an interchangeable mass product, was the last argument of long-time Daimler CEO Dieter Zetsche.

Under the leadership of Ola Källenius it was increasingly emphasized that one also wanted to understand the technology of the cell in order to be able to offer products that are better than others. This involves energy density, charging speed, safety, range, service life, recyclability and other properties that are relevant to the quality of the car. The in-house development and production of cells and modules for batteries together with partners will help ensure that "Europe remains a center of the automotive industry even in the age of electric power," said Källenius.

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