Mercedes Kills EV Plans
Mercedes, one of the German luxury car companies, came late to the decision that the EV sector is disintegrating. It should have decided sooner since Tesla’s sales have slowed, small high-end EV companies, particularly Lucid and Rivian, are falling apart, and car giants, led by Ford, can barely sell new EV models. The only large global manufacturer that charted the correct course is Toyota, which has emphasized hybrids and only put modest development dollars into EVs. Toyota has become the world’s largest car maker based on revenue.
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The Mercedes announcement was chilling for EV advocates. Initially, Mercedes expected 50% of its new sales to be EVs or hybrids by next year. It has pushed that date out to 2030. CEO Ola Kaellenius said Mercedes would concentrate on fossil-fuel-powered cars as it moved slowly into a future where EVs may become widespread. As has become true with several of his rivals, hybrids are a significant side bet on where the market will finally settle. According to Reuters, “Kaellenius wanted customers and investors to know it was well-positioned to carry on producing combustion engine cars and was ready to update the technology well into the next decade.”
Mercedes’s home turf is an excellent example of why Kaellenius made the decision. EV sales in the EU dropped from December to January. There is no evidence there will be a sudden recovery. Sales of EVs have slowed sharply in the US, and even California, which dominated the American EV market, is not the promising market it once was.
Mercedes might have turned to China, but with BYD in the lead, Tesla and local car companies have made the world’s largest EV market extremely competitive.
EVs have drawn criticism from many car owners. They have ranges that are too short in some opinions. These ranges can drop in cold weather. There are too few charging stations compared to gas stations. Changing a battery takes hours. Filling a car with gas takes minutes.
Mercedes has backed away from a market that appeared promising but never was.
