Cars

Published on September 13th, 2017 | by James Ayre

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Daimler Exec Says Electric Cars Only Half As Profitable As Conventional Cars … At First

September 13th, 2017 by  

The Vice President of Finance and Controlling at Mercedes-Benz Cars, Frank Lindenberg, was recently quoted at one of Daimler’s investor meetings as saying that electric vehicles may be only half as profitable as diesel or petrol/gas-powered cars at first.

Lindenberg noted that if the all-electric Mercedes-Benz EQ model ends up being popular, company profits could drop — well, initially.

“In the beginning of the cycle we believe that we will have to face a significantly lower margin. For some vehicles half of the margin of the vehicles they replace,” he stated.

As such, the exec argued that if a rapid shift to electric vehicles was made, it could prevent the company “from meeting its return on sales target.”

“We are still aiming for a 10% return on sales, but have to be prepared for a kind of transition, with a corridor of 8% to 10%,” he stated.

Reuters continues: “Daimler said that by 2025, the purchasing cost of electric cars would likely reach parity with combustion equivalents, which could accelerate migration to battery powered vehicles. Electric cars are currently more expensive than combustion-engined cars because of battery costs. … One way for Daimler to lower costs would be to purchase a larger proportion of electric components from suppliers rather than making substantial parts of the car in-house, Chief Executive Dieter Zetsche said.”

In related news, the CEO of Daimler, Dieter Zetsche, was also recently quoted as saying that the transition away from internal combustion engines vehicles (diesel, petrol/gas, etc.) and to electric vehicles (EV) shouldn’t be “forced” through the use of EV quotas.

I wonder why he would say that? Ordinary people in Germany have got to be getting a bit tired at this point of this sort of crap from auto industry execs, don’t you think?

Here’s the quote (via Reuters): “We want to reach the maximum speed ourselves, we don’t need quotas for that.” If they don’t need quotas, what’s the problem with quotas? If they will lose profits and have to adjust those forecasts downward with a quick transition, do they really want to reach maximum speed?

Interestingly, Zetsche also was quoted as saying that Mercedes-Benz had actually sold more diesel cars over the last year then during the previous one, despite public discussions about possible diesel car bans in some cities.

As I haven’t heard audio of the quotes in question, I can’t say for sure what the context was, but that observation does seem a bit strange, doesn’t it? It almost sounds like an “adult” version of “Na na na, you can’t get me!”

For more on the core topics at the top — that a quick transition to electric cars is a great threat to conventional automakers’ finances — also see:

What Goes On In The Minds Of Auto Execs?

Sergio Marchionne Admits EV Revolution Would Crush Automakers

What’s Actually New In The Electric Car World?

Crazy Auto Company Exec Comments About Tesla


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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.



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