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Published on December 10th 2021 in

Mercedes-Benz to invest €60 billion into the future

Daimler’s Supervisory Board has approved the Mercedes-Benz Business Plan for 2022 to 2026, endorsing the strategic plan for Mercedes-Benz to go fully electric. Following the Daimler Truck spin-off, Mercedes-Benz will consistently focus on profit and growth opportunities in the passenger car and vans businesses, and as the most valuable luxury brand in the world, will strive for leadership in the area of electric drives and car software.

For the transformation into a software-driven and emissions-free future, although the company plans to reduce capex, research and development expenditure for the electrification of the product portfolio and digitalisation measures, including steps towards automated driving, will remain at a high level.

Ola Källenius, Chief Executive Officer of Daimler AG and Mercedes-Benz AG said: “Our goal is technological leadership in the automotive luxury segment and in the area of premium vans while remaining committed to our ambitious margin targets. Mercedes-Benz has what it takes: a clear strategy, a highly qualified and motivated team, as well as strong support from the entire supervisory board. With the most desirable cars we want to grow profitably and create sustainable value for our customers, employees, shareholders and partners.”

The Supervisory Board’s endorsement reinforces the company’s commitment to sustainably achieving the margin targets communicated in October 2020 and reiterated in July 2021, also during an accelerated transformation towards an electric-only era. An important lever for achieving this is to increase net revenues per vehicle. In addition, a gradual shift toward a direct sales model, which includes control over pricing, is being sought. Rising revenue from digital services will further support results.

Mercedes-Benz is preparing to go all electric by the end of the decade, wherever market conditions allow, and the Supervisory Board supports existing measures to consistently increase efficiency and to lower fixed costs.

The key to achieving this is stringent prioritisation of future investments, mainly by focusing on electric mobility. The company expects that the use of standardised battery platforms and scalable vehicle architectures – together with advances in battery technology – will contribute to a reduction in the variable costs of vehicles. The proportion of battery costs in a vehicle is expected to decrease significantly this decade.

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