Strategy: Daimler seeks its salvation in luxury and accelerates electrification

Part-time electric vehicles on the rise: High PHEV share

In the meantime, the company reports a rising share of electrified vehicles in sales. Despite "challenging conditions" due to the COVID-19 pandemic, Mercedes-Benz passenger cars in Germany exceeded last year's sales in the third quarter with 84,676 units (+4.0%). Order intake for Mercedes-Benz passenger cars in Germany was significantly higher in the third quarter than in the previous year (+20%). More than one in five vehicles of the Mercedes-Benz passenger cars and smart models sold in the third quarter was a so-called xEV, and this share increased to one in four vehicles in September.

However, most of these come from the pool of more than 20 plug-in hybrid models, to which the PHEV version of the new S-Class with a range of 100 km is to be added in 2021, but not full-electric vehicles. So far, Mercedes-Benz only offers the recently launched EQV large-capacity limousine and the EQC derived from the SUV GLC, as well as the smart models with electric drive. In the compact class, production of the EQA, the fully electric sibling of the GLA, is set to start this year, followed by the EQB in 2021.

Accelerating with electric vehicles: EQS to be released in 2021

As part of the "Electric First" strategy, the company announced four new electric vehicles that will be based on the upcoming Electric Vehicle Architecture (EVA). The luxury limousine EQS will be the first model on this new standalone platform and will be launched in 2021 with an electric range of more than 700 km (WLTP). On the way to series production, the EQS is currently undergoing the final tests, including at the testing and technology center (PTZ) in Immendingen, according to recent reports. The EQS will also be produced together with the new S-Class in the "Factory 56" in Sindelfingen.

The camouflaged prototypes under testing reveal key design features such as the cab-forward design or the coupe-like "One Bow" design. The EQS SUV, EQE, and EQE SUV, which are to follow, are also already being tested. In addition, AMG, Maybach, and G-Class will be electrified. Based on the second newly conceived electric vehicle platform, the Mercedes-Benz Modular Architecture (MMA) for vehicles in the compact and midsize segment, further models will complete the electric vehicle portfolio from 2025 onwards, according to the promise.

There is also gradual progress in the electrification of light commercial vehicles "under the good star": The sales of battery-electric driven eVito and eSprinter increased by 43 percent in the third quarter compared to the previous year, the company reported. 

EQXX: Keeping the next steps in mind, in-house software

With the technology program Vision EQXX, the manufacturer also announces the next step in the development of electric vehicles. The goal is maximum efficiency and range, for which the development department is setting up a cross-functional and multidisciplinary team in Stuttgart. This will be supported by specialists from the British Mercedes-Benz F1 HPP group, who will contribute their expertise in e-motors and their development speed inspired by motorsport. Innovations from this technology program will quickly find their way into series vehicles, it is promised.

In the field of vehicle software, they intend to rival Tesla and its proprietary strategy, relying on their own developed MB.OS operating system. It is to be launched in 2024 and will enable central control of all vehicle domains and thus customer interfaces, which the company has recognized as essential.

“At Mercedes-Benz, we aim for nothing less than leadership in electric mobility and digitalization through an intelligent platform strategy and a software-based approach,” explained Markus Schäfer, member of the Board of Management of Daimler AG and Mercedes Benz AG, responsible for Daimler Group Research and Mercedes-Benz Cars COO.

The Mercedes path: In-house development and collaboration

In this, the company follows its own "Mercedes path" and wants to offer an intuitive and luxurious experience with electric vehicles. This is done with its own development department, but also strategic partnerships, Schäfer continued. The plan is to achieve high contribution margins from 2025 onwards for all new architectures through high common parts rates, targeted investments, and further falling battery costs, Schäfer outlined. According to Daimler's forecast, the share of electrified and fully electric vehicles will account for over 50 percent of global sales by 2030. In contrast, investments in internal combustion engines will quickly decline and the number of variants will be reduced by 70 percent by 2030, Schäfer announced.