Luxury automaker Mercedes-Benz has backed off its previously-announced plans to sell only electric vehicles after 2030.
On Thursday, the company made the announcement, which is serving as more evidence that the auto industry across the globe isn’t feeling as positive as it once was about the future of all-electric vehicles. All of this is coming as sales growth in the sector has slowed considerably.
Just three years ago, Mercedes was so bullish about its plug-in powertrain vehicles that it announced that it would sell EVs only by 2030. When it made that announcement, it said all gas-powered vehicles were to be completely phased out “where markets allowed.”
Now, though, the market seems to be dictating that those plans aren’t realistic.
In the fourth quarter earnings statement that Mercedes put out this week, the company said that it expects only 50% of its sales to be for all-electric vehicles. That marks a huge drop from the outlook it once had.
As such, hybrid vehicles and gas-powered vehicles will now be part of the future for Mercedes-Benz for years.
In the report it released this week, Mercedes officials said:
“Customers and market conditions will set the pace of the transformation. The company plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s.”
EVs sales in Europe significantly outpace that in North America. But, even there — where the company is based — does Mercedes expect that it will be transitioning to an all-EV fleet anytime soon.
As Ola Kallenius, Mercedes’ CEO, told Reuters recently:
“It’s not going to be 100% in 2030, obviously … from the whole European market, but probably from the Mercedes side as well.”
Those comments add to previous ones from other executives in the auto industry who have expressed much more caution about the future of EVs than environmentalists and other optimists would like.
Even Elon Musk, who is the CEO of the all-EV company Tesla, said that they are bracing for 2024 sales numbers that are expected to be significantly slower than in years past.
Other similar companies such as Lucid and Rivian said they expected that production would remain flat in 2024. And other companies such as Ford and GM have both delayed construction of factories to build EVs or have altogether canceled some EV models.
Last year, EV sales reached almost 8% of total auto sales in the U.S. In Europe, that number reached about 13%.
While sales of EVs are growing, customers are starting to become more discerning about their price while at the same time expressing concerns over reliability and charging time.
What has happened at the same time is that sales of hybrid vehicles — which combine electric and gas — have significantly increased. Many consumers have looked at hybrid vehicles as a great middle ground of “bridge” to EVs as they wait for charging infrastructure throughout the country to be built out.
