Mercedes-Benz has scaled back its initial commitment to sell only electric vehicles (EVs) by 2030, marking a notable shift in the global auto industry’s optimism toward an all-electric future. Just three years ago, Mercedes had been confidently moving toward a future driven exclusively by plug-in powertrains, with plans to phase out gas-powered vehicles by 2030, subject to market conditions. However, the company has now revised its outlook, projecting that only half of its sales will be all-electric, while gasoline and hybrid models will continue to play a role in its product line-up for the foreseeable future.
This adjusted strategy, according to Mercedes’ fourth-quarter earnings statement, reflects the influence of customer preferences and market dynamics on the pace of electrification. The company aims to cater to diverse customer needs, offering both all-electric drivetrains and electrified combustion engines well into the 2030s. Even in Europe, where the electric vehicle market is relatively more mature, Mercedes CEO Ola Källenius told Reuters that the shift to EV-only sales by 2030 is unlikely for the entire market, and likely not for Mercedes either.
This cautious stance mirrors recent sentiments across the industry. For example, Elon Musk, CEO of Tesla, anticipates a significant slowdown in sales growth for 2024. Similarly, dedicated electric vehicle companies like Rivian and Lucid expect production levels to remain stable this year. Traditional automakers like GM and Ford have either postponed factory construction or scrapped certain models.
Despite these shifts, EV sales in both the United States and Europe continue to grow, accounting for nearly 8% and 13% of total vehicle sales respectively in 2023. However, customer concerns about charging infrastructure, reliability, and cost are becoming more apparent. Consequently, sales of hybrid vehicles, which offer a compromise between traditional and electric models, have increased as customers seek a middle ground while the EV charging infrastructure continues to evolve.
