Electrification was one of the big buzzwords at the recent Frankfurt Motor Show, with almost every carmaker present revealing a new electric vehicle or concept car. Not least of which was Mercedes-Benz – the company revealed its luxurious Vision EQS concept and promised to be fully carbon neutral by 2039, with its production sites in Europe set to be the first to reach that milestone by 2022.
Twenty years seems like a very long time to achieve zero emissions across the company, and the boss at Stuttgart, Ola Källenius, explained that the large demand for passenger cars around the world – and the lack of infrastructure for electric power and other renewable energy sources – would make it very difficult for it to wean itself off petrol and diesel immediately.
“Today, the world market for light vehicles or passenger cars is somewhere between 85 and 90 million vehicles per year. Looking at how heterogeneous the infrastructure is around the world, if you want to replace that quickly with 100% fully electric vehicles or perhaps fuel cells, that would be an enormous industrial undertaking. So on the product side, depending on regulations and how the different markets develop, this will be a journey that will probably take at least 20 years,” he said.
Källenius understands that not every market is ready to go electric at the moment, which is part of the reason why complete carbon neutrality is still so far away. “But one thing is key – we all realise that we need to get to CO2 neutrality, so that’s the direction that we’ll have to take. But it will be a heterogeneous journey and not the same journey at every country at the same speed.”
While that’s going on, the company can work on other aspects of the organisation first. “On the things that we can influence and do quicker now, such as our own production – where we’re replacing fossil-based energy production with renewable-based electricity and so on – we have decided to move as quickly as we can. We’re starting with our own production facilities here in Europe and we are evaluating our international production sites as we speak,” Källenius said.
The executive kept mum on the specifics of the company’s carbon neutral strategy, as there are so many alternative fuels being developed at the moment. “If you look at the technologies that are in the pipeline now, we have the battery electric vehicles, there’s the fuel cell for commercial vehicles and larger vehicles, and there’s even the dark horse of synthetic fuels, combined with grown biofuels from algae and so on.
“For the next 10 years, we have a relatively clear strategy – on passenger cars, we’re going electric, on commercial vehicles [there will be] a combination of electric and perhaps fuel cell, and then we’ll see what happens with synthetic fuels. But I don’t want to say exactly what’s going to happen in 20 years’ time – engineers have so much creativity and ingenuity that probably if we meet here in 20 years’ time we’d be surprised at what has happened!” he said.
One thing’s for certain – Mercedes (or indeed its parent company Daimler) will not diversify into the energy business anytime soon. “We will still get you from A to B in style, we’re not planning on vertical integration and becoming an energy company. We will cooperate with energy companies to define a roadmap to sustainable modern luxury, which is our brand promise. But we will focus on what we know best.”
On the subject of its near-term product strategy, Källenius said that electrification will lead to a consolidation of the current lineup as part of the company-wide transformation – one that does not just mean the discontinuation of models and body styles, but powertrain options as well. “With the launch of the EQ family of new cars, obviously we’re adding some to the portfolio. But we have a simple rule: don’t add another model or niche just for the sake of it – it has to make economical sense,” he said.
Källenius adds that while government incentives for electrified vehicles is welcome, it will also need to provide products that are genuinely compelling to consumers. “It’s true that some of the electric [uptake] we are talking about is regulation-driven, and you can throw regulatory incentives that will greatly change consumer behaviour,” he said. “But what we’re seeing now, especially with the launch of a whole range of electric vehicles from Mercedes, that if you have the right product, you will create the pull factor as well.”
One of the ways to create that pull factor is to bring its Mercedes-AMG and Mercedes-Maybach sub-brands into the world of electrification, and the latter will be showing a new SUV model next month. “We have been unbelievably successful with AMG and have also been growing the Mercedes-Maybach brand. We have some ideas there, and you shall see more of that coming later this year, stay tuned.”
