Interview Synopsis

Daimler – Mercedes EV analysis

  • Public Equity
  • Industrials
  • North America

Mercedes, a subsidiary of German multinational Daimler, has bounced back from a “fairly steep fall” at the beginning of 2020, a former department manager at Volkswagen AG told Third Bridge Forum. However, the road ahead looks more positive: “I expect Daimler to have… a marginal growth, potentially 3-5% on the 2019 numbers, and also a little bit [of] a shift in the type of vehicle segments or body styles which they’re selling.”

Promising road ahead for EV uptake

Post-pandemic, the Chinese market is leaning more towards premium and luxury. “Daimler has taken advantage of this, so their growth is driven by new products like the S-Class, which is selling very well in the Chinese market, also with their medium-sized SUVs, like the  GLC and GLE” have performed well in the past six months.

New energy vehicles, including PHEVs (plug-in hybrid electric vehicles) and BEVs (battery electric vehicles), register at about 7-8% of total sales. The specialist expects this to rise in future, with two main drivers, one of which being European incentive programmes. “If you look, for example, in the German market, there has been already… an increase in the incentive for credits towards pure BEVs and PHEVs below certain pricing thresholds.”

When asked whether Mercedes’ goal for a 50% share of EVs by 2030 is realistic, the former Volkswagen executive commented that it depends on further legislation – particularly in the US. “The US market, at the moment Daimler is selling, again, [the] majority of their models as ICEs [internal combustion engines]. It’s a very, very difficult market for them to enter and gain proportion for EVs, specifically BEVs. This is basically Tesla’s home ground.”

We also heard how the global semiconductor shortage is affecting production, including which models are likely to face disruption. In addition, the specialist offered their perspective on what lines Mercedes should prioritise, and that it depends on the market and the respective emissions compliance regulations.

Other topics included comparisons with Audi, BMW and Tesla, expected volumes for the EQS and S-Class models, and the threat from other luxury marques’ EV products.

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