Merc will hedge its bets on EV

Mercedes-Benz is hedging its bets over the dominant car powertrain of the future.

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Jörg Burzer, member of the management board of Mercedes-Benz AG responsible for production and supply chain management, has confirmed that flexibility is currently one of the fundamental topics in Mercedes-Benz’s manufacturing business.

“We are working on the assumption that by 2035 we will be able to produce 100% electric [vehicles] and so we are preparing the production network for that,” he said.

This is partly in response to the announcement by some European countries that internal combustion engine (ICE) vehicles will be banned from 2035.

Burzer said plants in Mercedes-Benz’s production network are not targeting the production of a certain percentage of ICE, hybrid or electric vehicles (EVs) but flexibility during this time of transition or transformation to be able to produce vehicles according to market demand.

He emphasised that Mercedes-Benz did not want to invest heavily in EVs in all its plants right now when it is unsure how market conditions will develop, particularly when Mercedes-Benz has locations globally that are very export orientated.

“The nice and very good situation that we have in South Africa is that we are completely flexible between ICEs and hybrids so we can react to market demand – and not only this year but also in the coming years.

“That is what we are basically trying to introduce in all our plants right now,” he said.

Burzer said this flexibility prevented Mercedes-Benz building factories that at a certain point in time will be unable to produce vehicles because they are focused on only one powertrain.

The pace or speed at which different markets and countries are developing charging infrastructure for EVs and hybrids is different.

However, the products produced by Mercedes-Benz depend on customer demand while customers are dependent on the charging infrastructure in terms of how they use any EV, ICE and hybrid vehicle, he said.

Burzer said there might be a time in the next 10, 15 or 20 years when Mercedes-Benz will have to decide on whether it will be producing ICE, hybrids or all-electric vehicles, but flexibility in manufacturing is currently key.

He said the future of Mercedes-Benz’s production plant in East London was secure because of investments in the plant to ensure flexibility to produce vehicles with different powertrains.

Burzer said the East London plant is one of the cornerstones of Mercedes-Benz’s global production network, with the new C-Class only being built in two other Mercedes-Benz plants, Bremen in Germany and Beijing in China.

He added that Mercedes-Benz will still be able to provide small volumes of ICE vehicles to countries that are not well prepared for electromobility.

However, Burzer said he personally believed that all markets have to start preparing for electromobility now “because this will be the driving technology for the automotive industry in the coming years”.

Mercedes-Benz Cars announced in June this year the company had invested a further R3 billion in South Africa, thereby increasing its investment in South Africa to R13 billion to produce the new generation C-Class.

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