Mercedes backtracks on its electrification goals, now targets 50% electrified sales by 2030

22 February 2024

Back in 2021, Mercedes came out with an ambitious goal: to have 50% of its sales come from electrified vehicles by 2025. Today, the company has backtracked on that and delayed the goal by five years to 2030.

A big part of the initial goal of 50% electric by 2025 was to be taken by all-electric vehicles, but now that seems to have changed too, with the company saying it expects plug-in hybrids to "stay relevant" for several more years. Hybrids and pure EVs are counted together towards Mercedes' goals.

This is only the latest announcement that comes as a consequence of EV demand waning despite a ton of investment from all major car makers (well, except Toyota). The plateau that's been hit is pretty obvious - all of the 'early adopter' types already have an EV, while for most people the cost is a huge factor. And since pure EV prices are still huge compared to ICE vehicles and hybrids, sales aren't jumping anymore.

Currently, 11% of Mercedes cars sold in Europe are all-electric, and 8% hybrids. The rest? ICE. Thus, the company will continue to update its ICE models for the next few years. CEO Ola Kaellenius wants customers and investors to know Mercedes is "well-positioned to carry on producing combustion engine cars" and is "ready to update the technology well into next decade", according to a Reuters report.

The current plans mean "it is almost like we will have a new lineup in 2027 that will take us well into the 2030s", Kaellenius said.

Aside from EV demand growth waning, Mercedes was also impacted by slower economic growth, supply chain issues, component shortages, and trade tensions between China and both the US and EU. Thus, first quarter sales this year are likely to come below those in Q1 2023. Electrified vehicle sales are expected to be at around 19-21% of the total, when counting both battery EVs and hybrids together.