Mercedes puts great faith in gasoline engines
Mercedes CEO said gasoline engines "will be around until the 2030s", so the company invested heavily to make engines meet emissions standards.
After admitting its electrification goals were too ambitious, Mercedes is now pouring huge sums of money into the internal combustion engine (ICE). In an interview with German newspaper Wirtschaftswoche , CEO Ola Källenius said ICE technology “will last until the 2030s.”
This year alone, the three-pointed star brand is spending around $15 billion on its passenger car division alone. The money is being spent on developing high-tech internal combustion engines, electrification and digitalization. While the CEO did not specify how much Mercedes will spend on ICE, he admitted that it is “more money than previously planned.”
V12 engine block on Mercedes S-Class model. Photo: Motor1
Källenius mentioned the S-Class and the mid-cycle update of the flagship model due in 2026: "We invested more in the update of the internal combustion engine S-Class than we would normally spend on a facelift."
He stressed that without spending a lot of money on ICE, the luxury brand will stagnate its ICE business by 2027 or 2028. The engines will have to be updated to run cleaner to meet increasingly stringent emissions regulations, such as Euro 7 or China 7. The goal is for Mercedes to adapt all “internal combustion engines and related powertrains” to avoid paying large fines.
Källenius said Mercedes' internal combustion engines will be electrified to some extent in the future, meaning more hybrids will be launched.
Mercedes admits that the transition to electric vehicles isn’t going as planned. Three years ago, the company said that plug-in hybrids and all-electric vehicles would account for about 50% of its annual sales by 2025. But that’s unlikely to happen. At one point, the company even said it would switch to all-electric vehicles by 2030 in some countries “where market conditions allow.”
Mercedes knows it has to adapt now that the transition to electric vehicles isn’t going as planned. Three years ago, the company said plug-in hybrids and fully electric vehicles would account for about 50 percent of its annual sales by 2025. But that’s unlikely to happen.
The company now wants hybrids and electric vehicles to account for half of its deliveries by the end of the decade. The ultimate goal of becoming carbon neutral by 2040 remains unchanged, Källenius said.