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What are the projections in electric cars of two giants of the automotive industry

Mercedes bet everything on electric cars and announced that by 2030 it will only sell this technology in Europe
Mercedes bet everything on electric cars and announced that by 2030 it will only sell this technology in Europe

Almost a year and a half ago, one of the first big brands to announce its full conversion to electricity was Mercedes Benz. It did so through its CEO, the Swede Ola Källenius, who announced in July 2021 an investment of 40,000 million euros exclusively to develop the electric platforms that would allow it to have at least one electric model in each segment in which they have products by 2022, and from 2025 only launch new cars under that technology. The announcement said that from 2030, Mercedes will only sell battery-powered cars in Europe.

In Volkswagen Something similar happened, although with the date set in 2033 as the moment in which new non-electric models will no longer be manufactured for the European continent. But the process of the VW Group’s mother house was a little more traumatic, because in the midst of its digital expansion, with the successful ID.3 and ID.4 on the streets, they had to go through a change of command when the CEO who promoted accelerated electrification, Herbert Diess, ceased to function and was replaced by who held that same function at Porsche, Oliver Blume.

The commitment of both German companies was very clear towards the new battery-powered mobility, but even anticipating the deadline that the European Union posed to manufacturers, who will no longer be able to sell cars with Thermal motors since 2035. However, although the numbers are good, neither company seems to have managed to meet the 2022 goal for electric cars.

Herbert Diess was the driving force behind the VW Group's electrical outpost and left office last September.  The bet is very big and quite risky and not all the numbers seem to give as expected REUTERS/Fabrizio Bensch/File Photo
Herbert Diess was the driving force behind the VW Group’s electrical outpost and left office last September. The bet is very big and quite risky and not all the numbers seem to give as expected REUTERS/Fabrizio Bensch/File Photo

The economic situation of European countries has been affected by unexpected inflation and a major energy crisis, which creates a scenario in which many users have decided to postpone it as a precaution or have not been able to achieve their personal objectives directly, which it has led them to opt for cars from more affordable brands instead of making the leap to expensive electric ones in general.

Although a year ago, VW’s two electrical products positioned themselves strongly against the advanced Tesla, the reality seems to indicate that today they are the fourth group in sales of cars with this technology, behind the brand of Elon Musk, the Chinese BYD and the North American General Motors. In fact, recently the news of an almost certain postponement of the ambitious project has been known Trinitythe ultra-modern platform designed only to build long-range electric cars and the ability to reach Level 4 autonomous driving.

Tesla continues to be the leading brand in sales and profitability in Europe, and that is the parameter that the large manufacturers have.  REUTERS/Hannibal Hanschke/File Photo
Tesla continues to be the leading brand in sales and profitability in Europe, and that is the parameter that the large manufacturers have. REUTERS/Hannibal Hanschke/File Photo

For Mercedes the picture is not very different. His goals of surpassing Tesla may not be realized yet. Between January and September, the electricity market only grew 1.9%, according to Bloomberg, and the same source assures that the Stuttgart brand occupies 16th place in the ranking of exclusively battery-powered products globally. Without going very far, outside of Europe, Mercedes appealed for a reduction in prices of their electric cars in China due to low demand in recent months. And the price drop was substantial, because the most expensive models, those of the EQS line, reached up to 32,000 euros, which represents between 21 and 25% of the previous price.

The data that generated this decision is that in what was the year until October, Mercedes has sold 12,000 units of electric models of its entire range, while the local CHILD registered 10,059 automobiles in October alone.

China is the world's largest automotive market and Mercedes decided to lower its prices by up to 25% for its electric cars in search of improving sales.  REUTERS/Aly Song
China is the world’s largest automotive market and Mercedes decided to lower its prices by up to 25% for its electric cars in search of improving sales. REUTERS/Aly Song

The investments in product development, in electric mobility technologies and in software for its implementation, coexist with those that must continue to be done to give continuity to the current models, which are the ones that maintain constant and stable income for the coffers of the companies automotive.

The bet must be very well evaluated and that is why some projects such as the autonomous driving that both Volkswagen and Ford have been doing together since 2019, have been dissolved, to turn these gigantic investments into technology that the user can buy and enjoy today. Finding balance is not easy with variations of a so unstable economy and one supply chain still in crisisand that could be extended for at least another 12 months.

The big brands have a “back” to support this heavy load that they have placed on themselves, but even so, the CEO of one of the most important groups in the industry had to step aside since his great motto was to take the leap to full electrification in a short time. For everyone, it will be a matter of understanding that the steps cannot be longer than the stride.

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