The automaker behind the shift from internal combustion engines to luxury electric vehicles

Mercedes-Benz, the German automaker known for pioneering the internal combustion engine, says electric vehicles will be the dominant car on the road, especially luxury electric vehicles. The automaker’s CEO says he sees the shift to luxury electric vehicles happening step by step over this decade.

It was New Year’s Eve 1879 when the first stationary gasoline engine first worked, according to Mercedes-Benz. The single-cylinder two-stroke engine was developed by Carl Benz, a German engineer.

Seven years later, on January 29, 1886, Carl Benz filed a patent for his “petrol engine vehicle” (Model No. 1) which contributed to the development of the automobile industry.

Fast forward 100 years, and the automotive industry is undergoing one of the most significant transitions since the creation of mass-produced gasoline-powered vehicles.

The shift from internal combustion engines to electric vehicles is happening faster than expected. As technology advances, enabling longer battery life, more power and new features, consumers are converting faster than ever.

Sales of electric vehicles in the United States hit another record in the first semester 2022, rising to 196,788 to claim 5.6% of the overall market. Most automakers released their September sales this week, and while electric vehicle sales continue to rise, gasoline vehicle sales are down. For example, Ford reported September 2022 sales showing an almost 9% drop in total vehicle sales compared to 2021. Toyota, GM, Stellantis, Honda, Nissan and many others are reporting similar figures.

Tesla, which only makes electric vehicles, delivered a record 343,000 electric vehicles in the third quarter, up 43% from the third quarter of 2021.

Mercedes Benz sees this trend growing as consumers increasingly turn to electric vehicles over internal combustion engines, especially luxury buyers.

Mercedes-Benz EQS Source: Mercedes-Benz

The shift to EVs from internal combustion engines is underway

In a meeting With CNBC’s Jim Cramer, Mercedes-Benz CEO Ola Kallenius said, “Step by step, we see the market transforming” from internal combustion engines to electric vehicles.

Mercedes-Benz plans to become an all-electric brand in this decade, launching an electric vehicle alternative for every model offered by 2025. Additionally, all new vehicle architectures will be designed for electric-only models from of 2025.

Kallenius continues to say that change may happen faster than expected with luxury electric vehicles, stating:

I truly believe that in this decade we will move from being based on high-tech internal combustion engines to being electric, if not all-electric, dominant in the luxury segment.

Mercedes plans to achieve carbon neutrality by 2039, working to reduce CO2 emissions in its supply chain through mineral recycling initiatives and sourcing components from IRMA-certified mines. The automaker admits that climate change is an issue that needs to be addressed.

We have all realized that climate change is real, the CO2 problem needs to be solved. And where does this problem end? It ends on the desks of our engineers.

As the shift to electric vehicles accelerates, Mercedes-Benz believes it’s better for the planet and can also boost business.

We do it because we think it’s right. But we also do it because we think it will be the best deal. I don’t think there’s any doubt for a modern company, a modern forward-looking company, that we need to decarbonise.

The head of the German luxury automaker concluded, hinting that as electric vehicles progress, buyers will prefer them, saying:

As long as you give the customer a superior product to what they had before, they are open-minded for a change. The customer experience in terms of torque, performance, everything is fantastic.

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Kevin A. Perras