Mercedes Shifts Focus Back to Gas Engines
In an interview with German business newspaper Wirtschaftswoche, Mercedes-Benz CEO Ola Källenius stated a rather notable trajectory shift for the luxury automaker: It is once again shoveling serious money into the development of even more efficient internal combustion engines.
Källenius stated that he believes that ICE technology “will last well into the 2030s,” and to ensure that those engines meet ever-tightening emissions demands, the automaker has earmarked €14M (roughly $15M at current exchange rates) for its passenger car division. Those funds will help progress a few pillars of that business, including “high-tech combustion technology” as well as electrification and digitalization. And while the proportions for each weren’t revealed, Källenius admitted that the amount the company will spend on ICE tech is “more than previously planned.”
Specifically, Källenius alluded to the 2026 mid-cycle update that’s on the way for the company’s flagship S-Class. “We have invested a lot more in the model update of the new combustion engine S-Class than we normally spend on a facelift,” he said.
Getting the company’s ICE tech up to snuff will be vital for the coming Euro 7 and China 7 emissions standards that regulate massive markets for Mercedes. Without the capital expenditures now, there would be an increased risk that Mercedes “would suddenly stall our combustion engine business in 2027 or 2028,” according to Källenius.
The shift in strategy echoes pressure being felt all over the automotive landscape, as sales of electric vehicles fail to reach the anticipated growth rates that so many automakers were relying on to achieve those lofty “all-electric by X date” goals they were trumpeting just a few years back. Three years ago, Mercedes said that it expected plug-in hybrids and all-electric cars to account for half its annual sales by 2025. But the growing pains of the electric market are such that that’s now very unlikely.
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V8’s and less of their complicated hybrid stuff would make a better Mercedes to me. That C63 AMG is awful compared to the outgoing one with the sweet TT V8.
Apparently the EV idea was way oversold, way too early. The Hybrid, plug-in or not, seems to be the sensible solution.
I think that it is fine for Mercedes to increase development on IC engines. However, $15M is a drop in the bucket, and indicative that Mercedes is looking at a shrinking IC market. Historic Mercedes cars have sold for more than that. It isn’t much money. We won’t be seeing new V8s, and likely only small improvements in the 4 cylinder hybrid engines. What I want to see is Mercedes budget for electric vehicles… There won’t be much of a market for IC engines in industrialized countries in 10 years. Production will be low, and mostly for underdeveloped nations, if at all.
Battery technology will continue to improve, as will range and the ability to quick charge. Hybrid systems will continue to improve, and be the basis of most high end sport cars, for a while longer. While there are those who are just looking at the numbers and predicting that the numbers of electrics will never be met, things are changing far more quickly than the numbers might indicate.
Also, aliens will teach us a universal language, and crystals reveal the music of the spheres.
The free market has spoken.
A few years ago when fuel economy and performance were driving engines to be 2 liter turbocharged;
that was after Diesels were going to dominate the landscape.
Then came electrics which morphed into hybrids.
I think we have finally landed successfully.