Mercedes-Benz CEO says luxury drivers will help transition to electric vehicles

A charging port is seen on a Mercedes Benz EQC 400 4Matic electric vehicle at the Canada International AutoShow in Toronto, Ontario, Canada on February 13, 2019.

flicker mark | Reuters

Mercedes Benz CEO Ola Kallenius told CNBC’s Jim Cramer that while he thinks there will be a market for internal combustion engine vehicles for a while longer, consumers, particularly in luxury segments, will insist on more purely electric cars and SUVs. sooner than later.

In fact, he said, it is already beginning to happen.

“Step by step, we see the market change,” Kallenius said in an interview as part of CNBC’s ESG Impact conference on Thursday. “I really think that in this decade, we will go from being based on high-tech internal combustion engines to becoming electric dominant, if not completely electric, in the luxury segment.”

Mercedes’ corporate goal is to be carbon dioxide neutral by 2039. The company has said it will have fully electric versions of all its models by 2025, and that all new vehicle architectures it develops after that date will be electric only. .

“We have all realized that climate change is real, the CO2 problem needs to be solved,” Kallenius said. “And where does that problem end up? It ends up on our engineers’ desks.”

It’s a somewhat surprising message from the company that literally invented the internal combustion car more than 130 years ago.

“We do it because we think it’s the right thing to do,” Kallenius said. “But we’re also doing it because we think it’s going to be a better business. I don’t think there’s any question for a modern company, a modern forward-thinking company, that we need to decarbonize.”

Mercedes plans to sell its electric vehicles alongside internal combustion models for at least several more years.

But Kallenius expects most of Mercedes’ wealthy customers to switch to electric versions over time.

“As long as it gives the customer a superior product to what they had before, they will be open-minded about switching” to electric models, he said. “The customer experience in terms of torque, performance, everything is fantastic.”

In the very short term, making that change could be a challenge. Although Mercedes is ramping up electric vehicle production as quickly as possible, Kallenius acknowledged that “pretty much everything is sold out” for the year at this point.

Mercedes delivered around 31,000 EVs in the first half of 2022.

“I think maybe it’s a good problem,” he said.

Mercedes-Benz CEO says luxury drivers will help drive transition to electric vehicles
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