A marathon, not a sprint: Mercedes-Benz CEO outlines challenges in shift to EVs

The shift to zero-emission mobility should be viewed as a marathon not a sprint, according to the CEO of Germany’s Mercedes-Benz.

Speaking to “Squawk Box Europe,” Ola Kallenius sought to highlight the huge challenge facing the automotive industry in the years ahead as it shifts its focus toward electric vehicles (ESs).

“I think we have to realize that the transition to zero-emission driving is really a marathon, and I believe we’re maybe on kilometer eight or kilometer nine on that journey right now,” he told CNBC’s Annette Weisbach Thursday. “So it’s not something that we should look at as a sprint. The strategic direction is clear — we’re investing into the future, we’re going to go zero-emission.”

Kallenius said Mercedes-Benz’s EVs had received a “good reception” so far. The automaker’s EV models include the EQA, EQB and the EQE SUV. 

His comments came as the Mercedes-Benz Group reported earnings for the second quarter this week. Earnings before interest and taxes rose 8% to hit 5 billion euros, or roughly $5.48 billion.

When it comes to EVs, its battery electric vehicle sales reached 61,211 compared to 31,259 in the second quarter of 2022. Plug-in hybrid sales for the second quarter came in at 34,699, a slight increase on the 32,335 sold in the same period last year.

“We have a whole host of our, so to speak, first generation electric vehicles on the market now,” Kallenius told CNBC Thursday. “And there, we’re gaining momentum.”

The business was also, he explained, “investing in new architectures” that would appear toward the middle of the 2020s and “define our electric play for the second half of this decade.”

“So we are bullish on electric vehicles and zero emission driving and we’re putting billions into it,” he added.

However, Kallenius did stress the importance of maintaining what he called tactical flexibility when it comes to balancing EVs with traditional autos. “In this case, our production network is flexible to produce both high-tech electrified combustion engines and electric vehicles,” he added.

The Mercedes chief’s comments come as major economies around the world formulate plans to move away from vehicles that use fossil fuels in favor of electric cars.

With the majority of cars on the road still using diesel or gasoline, any shift to low- and zero-emission mobility represents a massive task for lawmakers and businesses.

Despite this, some parts of the world are already seeing significant changes.

In the U.K., for instance, the Society of Motor Manufacturers and Traders said Thursday that electrified vehicle production — which includes hybrid electric, plug-in hybrid and battery electric cars — reached 170,231 between January and June 2023, a record for the first half of a year.