Mercedes-Benz, the German car manufacturer, has delayed its plans for electrification. The company had planned for electric cars and hybrids to account for half of their car sales next year, but they have now pushed this goal back to 2030. Currently, electric cars make up about 11 percent of the company’s sales, with hybrids pushing this figure up to 19 percent.
The company made the announcement about their change in plans in Stuttgart, during a discussion about last year’s results. While the company said that its strategic focus remains on the all-electric era, they acknowledged that “customers and the market determine the pace of change.” A number of factors have contributed to the slower pace, including car sales slowed by inflation, pressure from Chinese cars, difficulties in obtaining parts for some cars, and general geopolitical uncertainty.
The operating profit for the company was 19.7 billion euros, a slight decrease from the previous year. However, the group’s net sales increased by two percent to 153.2 billion euros. No growth is expected for this year. In addition to this, the company announced a three billion euro share buyback program, which is a way of distributing profits by decreasing the number of shares in the stock market, thereby increasing the value of the remaining shares.
Other European companies have also set goals for electrification in 2030. The Stellantis Group is aiming for full electrification in Europe by that time, and the Volkswagen Group is aiming for 80 percent. Currently, electric cars make up 8.3 percent of the cars delivered by Volkswagen, which also includes the Audi and Škoda brands.
In 2035, the European Union plans to phase out new traditional combustion engines for environmental reasons. Germany has found a loophole in this ban, allowing cars to use synthetic fuel as a substitute for gasoline or diesel. According to Reuters, Mercedes-Benz assured on Thursday that it will continue development of internal combustion engines, hinting that the company is currently researching this synthetic technology in Stuttgart.
