Mercedes pumps the brakes on EV goals after profits drop
Mercedes-Benz is retreating from its ambitious plans for going all-electric, delaying its goal by years after a decline in profits in the first quarter.
Mercedes-Benz reiterated this week that it will continue to produce gas-powered vehicles well into the next decade, acknowledging its goal for producing nothing but electric vehicles is not going as well as the company hoped, amid a decline in profits.
"We want a CO2-neutral fleet by 2039," CEO Ola Källenius said in prepared remarks to shareholders at the automaker's general meeting on Wednesday. "However, the transformation might take longer than expected."
Källenius said Mercedes will stick with making both EVs and electrified combustion engines, "If the demand is there, well into the 2030s."
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The speech came after the German luxury carmaker reported a 30% drop in first-quarter earnings before interest and tax (EBIT) to 3.86 billion euros ($4.13 billion), compared with the 3.87 billion LSEG estimate.
This is the second time this year that Mercedes has backtracked on its all-EV ambitions, after previously setting a goal for EVs to make up all of its sales by 2030.
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The company announced in February that it would not meet its 2025 deadline to have EVs, including hybrids, make up 50% of all sales. Lackluster demand for electric-powered cars has delayed that goal until at least 2030, the company said at the time.
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The CEO had previously warned late last year that even in Europe, sales would likely not be all-electric by 2030, with battery-powered cars currently making up just 11% of total sales, and 19% including hybrids.
FOX Business' Chris Pandolfo and Reuters contributed to this report.