Mercedes-Benz Boss Says Luxury Cars Will Be The First To Go Fully Electric

Oct. 08, 2022 5:30 PM ET by Jarryd Neves Electric Vehicles / 5 Comments

CEO Ola Kallenius believes the luxury segment will lead the transition into electromobility.

Electric vehicles are growing in popularity, even here in the United States where many remain reticent to make the switch from ICE-powered vehicles. But several hindrances are in the way, the biggest of them being cost. Even the cheapest EVs can't be considered affordable; the modest Nissan Leaf is priced at $28,040.

The electric vehicle remains the reserve of wealthy buyers, an opinion shared by Mercedes-Benz CEO, Ola Kallenius. The head of the automaker told CNBC that he believes the luxury segment will spearhead the transition into electric mobility, with mainstream vehicles relying on ICE power for a few more years.

"I really believe that in this decade, we will flip from being based upon high-tech internal combustion engines to going dominant electric, if not all electric, in the luxury segment," said Kallenius.

The chief executive believes top-tier customers will be swayed by high-end luxury products like the Mercedes-AMG EQS. "As long as you give the customer a superior product to what they had before, they're open-minded for a switch...the experience for the customer in terms of the torque, the performance, everything is fantastic."

Like its closest rival, Mercedes-Benz has taken a measured approach to electromobility. Instead of abandoning the ICE engine altogether, the automaker will sell its traditional vehicles alongside the new electric offerings. The Stuttgart-based automaker has introduced a raft of battery-powered products in the past year, including the American-made EQS SUV.

Despite the left-field styling, the brand's electric vehicles are selling phenomenally well. In fact, they're proving so popular that the company can't keep up with demand. "[It's] so tremendous that we're doing everything we can to get the cars to the customers as fast as we can," said Kallenius at the time.

Mercedes electric vehicles are, as Kallenius describes it, "pretty much...sold out" for 2022, which explains why the CEO is betting big on EVs. The company plans to introduce more posh electric cars in the coming years as it aims to pivot toward the ultra-luxury segment.

As the world's richest individuals continue to spend money, Mercedes wants in on the action and is expected to launch not only a battery-powered G-Class (known as the EQG) in 2024 but a number of electric AMGs. All existing models will have an electric alternative by 2025. Upcoming vehicle platforms designed after that date will be electric-only, but we anticipate gas-powered models will be sold for a while longer.

"We do it because we think it's right...but we also do it because we think it's going to be the better business. I don't think there's any question for a modern company, a forward-thinking modern company, that we need to decarbonize," added Kallenius.