Generation EQ

After a massive push to prepare its EQ electric vehicle sub-brand, Daimler AG is looking to reduce annual investments in plants, equipment and new technology from a peak this year in order to maintain profitability.

According to a Bloomberg report, the Mercedes-Benz parent aims to cut capital and R&D spending from 14 billion euros down to 12 billion euros next year, Daimler AG CEO Dieter Zetsche told reporters at the Hamburg club of business journalists recently.

“The range of investments is an extreme challenge, as both electric and conventional vehicle-powering systems will need work in coming years,” Zetsche said.

Generation EQ

In the face of increased regulatory pressure to reduce vehicle emissions with electric vehicles, as well as developing future technologies such as automated driving, carmakers have splurged on development, and Daimler is no exception.

The company, along with BMW AG, are aiming to have as much as 25% of its annual vehicle sales to be made up of battery-electric vehicles within the next 10 years. Recently, a German resolution called for the ban of internal combustion engines in Europe by 2030, and it is certainly good timing that companies are focused on zero-emission vehicles.

Even so, the company will continue to find ways to make its petrol- and diesel-powered vehicles more fuel efficient. “We cannot stop advancing combustion engine technology, even if 25% of vehicles sold in 2025 are e-cars, as 75% won’t be,” Zetsche said.