Mercedes-Benz go all-electric by the end of the decade

According to its press release, Daimler, the parent company of Mercedes-Benz, announced that Mercedes will go all-electric. There are several highlights in the statement.

First of all, the German automotive giant decided that all newly launched architectures would be electric-only from 2025 onwards. It also intends that Mercedes-Benz will launch three electric-only architectures in 2025. Furthermore, Mercedes-Benz will be ready to go all electric at the end of the decade, where market conditions allow.

To realize this ambitious transition, the company installs battery cell capacity of more than 200 gigawatt hours with partners. It means that the German company plans for eight gigafactories in Europe as well as outside the continent. Thus, this amount would be equal to the production of two million luxury electric vehicles.

When it comes to its financial plan, acceleration of electrification needs a radical shift in capital allocation. Also, Mercedes-Benz commits to its margin targets as well.

People Plan

Even if we plan something new, we will not realize anything without our actions. In other words, execution is everything. In this sense, the announcement included more specific execution plans and People Plan is one of them. Mercedes-Benz thinks that the transition from internal combustion engines to electric vehicles is feasible. In fact, the company feel that it is already underway.

For example, the company work together with employee representatives and try to continue the transformation of its workforce. Another example is to make use of extensive re-skilling schemes, early retirement as well as buyouts. What’s more, TechAcademies will be offering colleagues training for future-oriented qualifications.

As a result, in 2020 alone, about 20,000 employees in Germany were trained in aspects of e-mobility. Furthermore, 3,000 new software engineering jobs will be created worldwide.

Key Take Away

We have already reported other Mercedes-Benz’s initiative, Digital Factory Campus in Berlin. Therefore, the announcement means its seriousness to transform gasoline or diesel engine automotive manufacturer into electric vehicles. Even though transformation of ourselves is difficult task, transformation of organizations are much more difficult than it. This is because each organization has different culture, people, strategy and key success factors.

Therefore, we can say that Mercedes-Benz takes further step to realize transition. The company referred early retirement as well as buyouts in the official statement, so it will happen sooner or later. These actions are crucial since to change people might be difficult than our expectation, takes time and needs energy.

One more important aspect in the announcement seems that most of luxury vehicles will be all electric within a decade. In fact, the rich people are affordable to purchase them. Furthermore, if they enjoy gasoline or diesel engine cars, many people will criticize it. Thus, the rich people will buy luxury EVs more to avoid these criticisms.

Finally, Mercedes-Benz referred the establishment of gigafactories. This is a mega trend, too. Even though they will sell luxury cars, battery production is a key success factor in the market.