Mercedes-Benz warned electric vehicles would remain more expensive than their combustion-engine siblings for years to come as the luxury-car maker braces for cooling demand for cars with a plug.
The manufacturer forecast lower returns in 2024, citing challenges from a slowing economy. Mercedes also pared back its outlook for electric car sales, with demand mainly in the small and medium segments where it is not as present.
Variable cost parity between electric and traditional cars “is many years away”, chief executive Pla Källenius said. “You can see that in the pricing.”
While the company is rewarding shareholders, its push to sell more top-end cars like the S-Class to bolster profits and fund the costly transition to battery technology is running into its first roadblocks.
The carmaker long benefited from pent-up demand that helped offset some of the economic challenges. But orders are expected to normalise this year as high living and borrowing costs weigh on consumption.
The company also needs to deal with fierce competition in its key market China — where it plans to introduce 15 new models this year — and pressure from Tesla's frequent price cuts.
Car makers have grown more cautious on battery technology. Sales of fully electric cars this year are set to grow at the slowest rate since 2019, according to BloombergNEF, with the unexpected stall in momentum intensifying competition.
Late last year, Mercedes rival Audi said it was paring back its electric rollout.
The share of fully electric and plug-in hybrid vehicles will remain roughly stuck at between 19% and 21% of Mercedes’ sales this year. The manufacturer also pared back its medium-term outlook for the technology, and now expects electric cars to account for half of sales in the second half of the decade rather than in 2025.
• Bloomberg