Anticipate Prolonged Period of Elevated EV Costs, Says Head of Mercedes

MUNICH, September 3rd - Embracing the future of automotive innovation, the CEO of Mercedes-Benz, Ola Kaellenius, shared insightful thoughts on the dynamics of producing electric vehicles compared to traditional combustion engine models. His positive outlook and strategic perspective shed light on the ongoing competition in the industry.

Kaellenius's remarks coincided with the exciting revelation of Mercedes-Benz's latest electric vehicle marvel, the CLA compact electric sedan. Set to make its debut next year, the CLA aims to provide an impressive 30% to 35% increase in driving range, showcasing the brand's commitment to pushing boundaries.

Speaking at the vibrant IAA car show in Munich, Kaellenius affirmed, "Electric cars do carry higher variable costs, and this trend is likely to continue for the near future." His words radiated confidence and optimism, underlining the persistent drive for progress. He emphasized the challenge of maintaining similar pricing for customers, acknowledging the inherent disparities in cost structures.

Within the realm of electric vehicle production, factors such as battery raw materials, software development, and electricity pricing contribute to variable costs. These facets, while presenting challenges, also ignite innovation and creativity within the industry.

Kaellenius pointed to Mercedes-Benz's proactive approach to streamlining fixed costs and resource allocation, aligning with the aspiration to achieve comparable profitability for electric cars as that achieved with combustion engines. This positive stride reflects the company's determination to evolve with the evolving landscape.

The forthcoming CLA is poised to achieve remarkable feats, aiming for a power consumption rate of 12 kilowatt hours per 100 kilometers and an impressive driving range of 750 kilometers. These ambitious goals set the stage for an electric driving experience that outshines previous models, such as the EQA 350 compact SUV.

When asked about the cost reductions achieved by the new CLA class, Chief Technology Officer Markus Schaefer echoed the sentiment of progress. He stated that the trajectory was toward an astounding 50% reduction in costs, highlighting the brand's dedication to economic feasibility.

To power the CLA, key supplier CATL (300750.SZ) and ACC, of which Mercedes holds a third, will be responsible for producing the batteries. This strategic collaboration exemplifies the symbiotic relationships shaping the future of the automotive industry.

Scheduled for production next year and market entry starting in 2025, the CLA embodies a strategic shift in model development. Chief Technology Officer Markus Schaefer emphasized the brand's drive to simplify and streamline model development, acknowledging the growing complexity faced in recent times.

As Mercedes-Benz sets its sights on a sustainable and electrifying future, the CLA stands as a testament to this journey. The brand's commitment to offering hybrid and all-electric options underscores a progressive approach, leaving behind diesel variants in favor of innovation and advancement.

Source : Reuters (Reporting by Christina Amann and Victoria Waldersee)