Mercedes-Benz is laying the groundwork for going all electric by the end of the decade, where market conditions allow.
Shifting from electric-first to electric-only, Mercedes-Benz plans to have all battery electric vehicles in all segments the company serves by next year. From 2025 onwards, all newly launched vehicle architectures will be electric-only and customers will be able to choose an all-electric alternative for every model the company makes.
“The EV shift is picking up speed — especially in the luxury segment, where Mercedes-Benz belongs. The tipping point is getting closer and we will be ready as markets switch to electric-only by the end of this decade,” said Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG.
To accommodate this shift, Mercedes-Benz is unveiling a comprehensive plan that significantly accelerates research and development. Between 2022 and 2030, the company will invest €40 billion, or approximately $47.1 billion, in battery electric vehicles.
Starting in 2025, Mercedes-Benz will launch three electric-only architectures — the MB.EA, which will cover medium to large size passenger cars; the AMG.EA, which is dedicated to performance electric vehicle platforms; and VAN.EA, which will accommodate electric vans and light commercial vehicles.
Mercedes-Benz has already reorganized its powertrain activities, placing planning, development, purchasing and production under one roof. Now the company will align manufacturing and development, and insource electric drive technology, which includes its recent acquisition of UK-based electric motor company YASA, with its axial flux motor technology.
Batteries Key to the Transition
Mercedes-Benz will need a battery capacity of more than 200 Gigawatt hours and plans to set up eight Gigafactories for producing cells. This is in addition to the nine plants already dedicated to building battery systems. Mercedes-Benz also plans to team up with new European partners to develop and efficiently produce future cells and modules, allowing the company to transform its powertrain production network and increase the range of models and shorten charging times.
Mercedes-Benz is also working on Plug & Charge, a way customers can plug in, charge and unplug without extra steps needed for authentication and payment processing. The Plug & Charge system will go live later this year with the launch of the EQS. The company already has the Mercedes me Charge, one of the world’s largest charging networks comprising more than 530,000 AC and DC charging points worldwide. Plus, the company is working with Shell on expanding the charging network through Shell’s Recharge network, consisting of more than 30,000 charging points by 2025 in Europe, China and North America.
Mercedes-Benz is preparing for its production network to go electric-only at the pace set by market demand. As soon as next year, Mercedes-Benz will be producing eight electric vehicles at seven locations on three continents. Furthermore, all passenger car and battery assembly sites run by Mercedes-Benz AG will switch to carbon neutral production by 2022. As such, training of its current workforce to build electric vehicles is already underway.
Paying for the Transformation
To help pay for these shifts, Mercedes-Benz will need to increase net revenue per unit by raising the proportion of high-end electric vehicles, such as Mercedes-Maybach and Mercedes-AMG models, while at the same time taking more direct control over pricing and sales. Common battery platforms and scalable electric architecture will help standardize and lower costs.
“Our main duty in this transformation is to convince customers to make the switch with compelling products,” said Källenius. “For Mercedes-Benz, the trailblazing EQS flagship is only the beginning of this new era.”
In the South, Mercedes-Benz has plants in Alabama and South Carolina. In Alabama, the Mercedes-Benz U.S. International plant, in Tuscaloosa, is already producing the Mercedes-Maybach vehicles. Nearby in Bibb County, MBUSI is beginning to build batteries for the EQS and EQE SUV models. In Ladson, South Carolina, Mercedes-Benz Vans assembles the Sprinter vans for the U.S. and Canadian markets under the brands Mercedes-Benz and Freightliner. They also reassemble the Metris vans.