Luxury Brand Mercedes-Benz to Go All-Electric by 2030

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【Summary】​German luxury automaker Mercedes Benz has ramped up its electrification plans and announced it will only produce fully-electric vehicles by 2030. For a company that invented the automobile way back in 1886, the switch to electric marks the end of an era for Mercedes Benz but the start of a new one.

Eric Walz    Aug 28, 2021 11:00 AM PT
Luxury Brand Mercedes-Benz to Go All-Electric by 2030

German luxury automaker Mercedes Benz has ramped up its electrification plans and will only produce fully-electric passenger vehicles by 2030. For a company that invented the automobile way back in 1886, the switch to electric marks the end of an era for Mercedes Benz but the start of a new one. The move also reflects the transformation of the global auto industry to battery-powered vehicles.

By 2022, Mercedes-Benz said it will have battery electric vehicles (BEV) in all segments.

Beginning in 2025, all newly launched Mercedes-Benz vehicle architectures will be electric-only and customers will be able to choose an all-electric alternative for every model the automaker sells. Mercedes Benz is targeting a range of over 600 miles for its future EVs.

To reach its goal of electric only vehicles by 2030, Mercedes-Benz will invest heavily in R&D. In total, investments into battery electric vehicles between 2022 and 2030 will amount to over US$47 billion. 

Mercedes-Benz is currently ramping up plans to prepare its global manufacturing network for electric-only vehicles. The automaker has already made investments in flexible manufacturing for EVs. Mercedes-Benz says it can begin mass producing electric vehicles today.

By next year, Mercedes-Benz said that electric vehicles will be produced at seven global locations. The company said that all passenger car and EV battery factories operated by Mercedes-Benz AG will switch to carbon neutral production.

Mercedes-Benz is joining with GROB, a German company specializing in highly innovative battery production and automation systems to produce batteries at scale. 

The partnership with GROB focuses on battery module assembly as well as pack assembly. Mercedes-Benz also plans to install a new battery recycling factory in Kuppenheim, Germany, to develop and secure recycling capacity. Start of operations is planned for 2023.

Mercedes will operate 8 battery factories around the world by 2030 with a combined output of 200 GWh. One EV battery plant will be located in the U.S. More than 90% of Mercedes models will be built with a common battery platform with standardized interfaces.

The transformation of Mercedes-Benz to an electric brand will also require a highly-skilled workforce. The automaker will make use of extensive re-training, but will also offer early retirement as well as buyouts. 

In addition to becoming an electric automaker, all future Mercedes-Benz vehicles will be software based, and support OTA updates for the life of the vehicle like a smartphone. Mercedes expects that rising revenue from digital services, such as OTA features that customers can download to their vehicles, will further help it meet its margin targets.

To develop the new MB.OS vehicle operating system, the company is hiring for 3,000 new software engineering jobs.

Mercedes-Benz says its remains committed to the margin targets outlined last year, which were based on the assumption of selling 25% hybrid and electric vehicles by 2025. The new profitability goals are based on an assumed EV share of up to 50% by 2025 and fully electric model lineup by 2030.

In order to increase revenue per vehicle, Mercedes plans to sell more high-end electric vehicles such as Mercedes-Maybach and Mercedes-AMG models, while at the same time taking more direct control over pricing and sales. All AMG models will be fully-electric and will be built on a completely new platform. Mercede Benz will launch a luxury electric Maybach SUV in 2023. A fully-electric G-Class will follow in 2024.

AMG models feature a high-performance electric powertrain. Mercedes Benz is acquiring Oxford-based electric powertrain manufacturer Yasa Inc. to supply the AMG vehicle electric motors.

Mercedes is also working on further reducing variable and fixed costs by creating EV platforms that will be shared among models. Common battery platforms and scalable electric architectures will bring higher degrees of standardization and lower costs. The proportion of battery pack cost is expected to fall significantly from what they are today, which will help Mercedes to maintain its profit margins per vehicle.

Future vehicles will be built on one of three new EV architectures; MB.EA, AMG.EA and VAN.EA. MB.EA will serve as the primary EV platform for the automaker and will support medium to large vehicles. The AMG.EA platform will be reserved for high-performance electric AMG models, while the VAN.EA will be for commercial electric vans.

To prepare for its transformation into an electric brand, Mercedes will significantly reduce investments into combustion engines and plug-in hybrid technologies will drop by 80% between 2019 and 2026. 

To support the charging needs of its future electric customers, Mercedes is expanding its charging network with its partners Ionity and ChargePoint. Customers will also gain access to Shell Recharge network, which includes 30,000 charging points by 2025 in North America, Europe and China. 10,000 of these will be high power chargers.

In addition to its bold new EV plans, Mercedes-Benz aims to be a carbon neutral company by 2039.

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