Mercedes Is Walking Back Its All-EV Future to Invest in ‘High-Tech Combustion’

Mercedes-Benz is the latest domino to fall in a long line of carmakers that have seen their EV plans tumble like small tiles, one after the other. The German automaker is no longer planning to be an all EV brand by 2030, and is now pumping millions into further development of internal combustion engines. Mercedes CEO Ola Källenius tells Wirtschaftswoche that combustion engines are going to last “well into the 2030s,” so Mercedes has no choice but to make massive investments into ICE in order to meet stricter carbon emissions rules, according to Motor1.

The changes come as Mercedes reportedly admits that it was overly ambitious with its electrification goals. This has become a common refrain among automakers that are walking back plans to replace ICE models with EVs. Automakers in the U.S. are encountering electrification setbacks that run the gamut from a lack of EV charging infrastructure, to low demand for EVs among buyers. Some of the blame can be placed on the automakers themselves, as in the case of GM, which bungled the release of its massively popular Bolt EV with a string of high-profile recalls. The Chevy Bolt was plagued by faulty battery packs from LG Electronics that ultimately cost GM and its EV partner $1.9 billion.

As more automakers begin to realize that transitioning to EVs is going to be harder than putting out a press release, Big Auto is collectively shrugging its shoulders and revising the timelines that were proposed at the start of the decade. Just three years ago, executives from M-B parent company, Daimler, told Automobilwoche the automaker was “switching from EV first to EV only.” The brass went on to say that every model in the lineup would have a fully electric version, and that Mercedes would switch to a “business without diesel and gasoline engines” by the end of the decade, as Automotive News reports.

The plans seemed ambitious even then, but, hey, everyone was doing it: Opel said it would go fully-electric by 2028; Jaguar by 2025; Volvo and Bentley by 2030; even Ford said it would only sell EVs in Europe by 2030.

Daimler and M-B gave themselves a timeline of nine years to “largely eliminate internal combustion engines,” per AN. Maybe that seemed viable back then, but, in 2024, Mercedes is largely investing in the development of “high-tech combustion technology,” as Motor1 cites the CEO of the German automaker. Hmm. It sounds redundant to say that high-technology combustion technology is the goal, but CEO Ola Källenius was likely referring to engines that must conform to stricter emissions standards around the world.

Mercedes says that becoming carbon neutral by 2040 is still its objective, but it is now investing €14 billion (or $15 billion at current exchange rates) into its passenger car division to meet it. Some of the money will fund advancements of M-B’s electrification (hybrids) and digitalization strategies, but “more money than previously planned” will fund the development of new combustion engines, like those in the upcoming S-Class. The company is also dialing in current combustion engine and transmission combinations to save every ounce of CO2 it can and avoid paying fines once Euro 7 and China 7 regulations go into effect. Because sometimes you have to spend a lot of money to avoid paying a lot more money. Meanwhile, the yardstick keeps moving, and the EV transition keeps being delayed.

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