Mercedes-Benz (formerly Daimler) Group CEO Kang Songlin said that in the foreseeable future, the variable cost of producing electric vehicles will still be higher than that of internal combustion engine models, saying that this will continue to intensify the already fierce competition.
Ola Kaellenius’ comments came as Mercedes-Benz revealed more details about its latest electric vehicle architecture, the CLA compact electric sedan. The electric car, due to be launched in 2024, aims to increase range by 30 to 35 percent.
“The variable costs of electric vehicles are higher. This will remain the case for the foreseeable future,” Kang Songlin said at the IAA auto show in Munich, adding that electric vehicles cannot be replaced on a reciprocal basis. Higher costs are passed on to consumers.
Variable costs that affect the production price of electric vehicles include battery raw materials, software development and electricity prices.
Kang Songlin said this is why the group is working to optimize fixed costs and resource allocation, hoping to achieve the same profitability as internal combustion engine vehicles.
The new CLA electric car aims to consume 12 kWh per 100 kilometers and have a range of 750 kilometers. The EQA 350 compact SUV model currently offered by Mercedes consumes 17 to 18 kWh per 100 kilometers.
When asked how much the new CLA model has reduced costs compared to the previous generation model, Mercedes-Benz Chief Technology Officer Markus Schaefer said they are on track to reduce costs by 50%.
Batteries for the CLA models will be produced by key suppliers CATL and ACC, of which Mercedes owns a third.
Schaefer revealed that the CLA model will enter production next year and be on the market from 2025, aiming to significantly reduce the complex challenges encountered in model development in recent years.
Mercedes-Benz will offer hybrid and fully electric models, but it has no plans for a diesel vehicle.
