Daimler supervisory board approves billions in investment

Image: Mercedes Benz

The supervisory board of Daimler AG has approved the Mercedes-Benz business plan for the years 2022 to 2026 and thus confirmed the strategic planning, such as the transformation to fully electric drives.

Since the spin-off of Daimler Truck AG on 1 December, Daimler has consisted only of the Mercedes-Benz Cars and Mercedes-Benz Vans divisions. Daimler said it would now “consistently” focus on the growth and profitability opportunities in the passenger car and van business, aiming for “leadership in electric drives and vehicle software”.

In the years 2022 to 2026, Mercedes wants to invest more than 60 billion euros for the “transformation into an emission-free and software-driven future”, this plan has now been confirmed by the supervisory board. The share of research and development expenditure will increase slightly, while Daimler will continue to reduce investments in property, plant and equipment.

However, research and development spending is also subject to strict guidelines: Total investments are to fall by 20 per cent by 2025 compared to 2019, and are to be further reduced by an as yet undisclosed amount beyond that. Within the declining investment budget, however, priorities are shifting.

In order to achieve the investment savings target, the “key to this lies in the stringent prioritisation of future investments – first and foremost the focus on electromobility”, the group informs. Two other factors are expected to contribute to this: firstly, the company says it expects that “standardised battery platforms and scalable vehicle architectures – together with advances in battery technology – will contribute to a reduction in the variable costs of battery-electric vehicles”. In addition, the share of battery costs in the vehicle “is expected to fall significantly in this decade”.

In addition to the falling capital expenditure, the course of increasingly placing the vehicles at the upper end of the respective segments was also confirmed. In other words, net sales per vehicle are to be increased and were defined as an “important lever” for achieving the margin targets. In addition, “a direct sales model” is to be introduced step by step, with which Daimler wants to achieve fixed prices without discount battles at the dealers. Increasingly, digital services are also to contribute to revenue.

“Our goal is to be the technology leader in the automotive luxury segment as well as in premium vans. In doing so, we remain committed to our ambitious margin targets,” says Daimler CEO Ola Källenius. “Mercedes-Benz has everything it takes to achieve this: a clear strategic course, a highly qualified and motivated team, and the strong support of the entire Supervisory Board.”

Mercedes-Benz had already outlined its future strategy in strategy updates in October 2020 and July 2021: From 2025, all newly launched vehicle platforms will be purely electric. By the end of the decade, Mercedes-Benz wants to be purely electric – but with the restriction “wherever market conditions permit”.

The first concrete steps of this new, consistent orientation have already become apparent since then: at the end of September, Mercedes joined the battery cell joint venture ACC (from Stellantis and Total), and Stellantis and Mercedes also invested in the solid battery developer Factorial just this week. Daimler is planning a total of eight battery cell factories together with partners to cover its own needs.



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