Germany wants the auto industry to pay for half of all plug-in car incentives.

Mercedes-Benz Executives Blow Hot and Cold On Electric Cars

Not so long ago, it wasn’t that unusual to hear the CEO or C-level executive of a major automaker take time out to mock a small startup called Tesla Motors. From Toyota to Honda and Audi to Ford, auto industry executives lined up to tell the motoring press why electric cars were a really bad idea.

They were too expensive. They didn’t travel far enough. And customers just didn’t want them, executives would parrot.

Mercedes-Benz customers (and some executives) aren't EV fans.

Mercedes-Benz customers (and some executives) aren’t EV fans.

In recent years, we’ve seen a paradigm shift in attitudes towards electric cars. Most major automakers are already selling their own electric vehicles or plan to bring them to market in the near future.  Save for a few skeptics (like Fiat Chrysler boss Sergio Marchionne) and companies preferring to support hydrogen fuel cell electric cars (like Toyota and Honda) attitudes towards electric vehicles are generally far more positive.

But that doesn’t mean car buyers are. And that, hints two Mercedes-Benz executives, is causing some concern.

Customers want AMG, not electric, say execs.

Customers want AMG, not electric, say execs.

While some companies like Nissan and GM are seeing the positive benefits that come from offering a plug-in model, resulting in impressive numbers of ‘conquest customers’ switching brand loyalty just so they can own a plug-in car, luxury German automaker Mercedes-Benz seems to be struggling to convince its customers that electric cars are the future.

Speaking to Australian magazine CarAdvice Mercedes-Benz CEO Dr. Dieter Zetsche said that despite the commitment both Mercedes-Benz and its parent company Daimler have towards electric cars, its core customers were still exceptionally cool towards the idea of an all-electric car.

“People are not telling us, ‘why don’t you have an electric car?’,” Zetsche said. “Rather, they are telling us ‘why can’t you deliver more AMG vehicles?’!”

As Mercedes-Benz’s in-house tuning division, AMG has made a name for itself over the years for making high-performance versions of many popular Mercedes-Benz vehicles. Sold as sporty, high-octane, high-cost range-toppers, AMG models aren’t known for their environmental street cred. Indeed, there’s only ever been AMG-badged Benz to lay claim to that title: the Mercedes-Benz SLS AMG E-Cell — an amazing all-electric sports coupe powered by four electric motors and a 48 kWh electric battery pack which never made it into production.

At the moment, Mercedes-Benz only has one purely electric vehicle on sale: the B-Class Electric Drive. Sister company Smart sells the Smart ForTwo Electric Drive, but for now, the two models are the closest Mercedes-Benz has come to offering a mainstream electric car. Plug-in hybrid variants of the S-Class, C-Class and E-Class are all either on sale or coming to market soon (depending on where you live in the world), but for now, the B-Class Electric Drive is as good as it gets.

And that, we should note, is a limited-production compliance car with a battery pack and drivetrain engineered by Tesla Motors, a company that Daimler once held a substantial shareholding in.

Despite customer apathy, Benz is keen to push for more electrified cars.

Despite customer apathy, Benz is keen to push for more electrified cars.

Despite apathy from its core base, Zetsche says Daimler will continue to drive its development of electric drivetrains, spending far more money on electric vehicle research and development for now that it is spending on autonomous vehicles.

“It is important for us to be perceived as the technological leader, we can’t always be that but we should always try to [be],” he said. “We have a decade-long vision for accident-free driving and our founders were the inventors of the automobile so we must continue to reinvent the automobile.”

It seems not all of Zetsche’s colleagues are as committed to electric vehicles — at least in the short term. Take recently-appointed head of Mercedes-benz USA Dietmar Exler, for example. Talking to the Atlanta Business Chronicle at a special event at Mercedes-Benz’s U.S. headquarters, Exler said that electric cars will one day post an existential threat to conventional internal combustion engined vehicles, but said that it was “more than a decade away.”

“It’s all well and nice to (offer) an electric vehicle,” he said. “But if the average consumer can’t afford it, we have a problem.”

Talking of battery technology — an old favorite of electric car skeptics — Exler said that in the past ten years improvements in battery chemistries has resulted in a three-fold increase in battery capacity. To be price-competitive with current gasoline vehicles in a world with no governmental incentives, he claimed a capacity increase of fifteen-fold would be needed, adding that electric vehicle battery packs would also need a longer life in order for people to consider them a solid investment.

Some executives haven't got the memo though.

Some executives haven’t got the memo though.

“Would you be comfortable buying a four-year-old electric car that might not have a warranty on the battery, the most expensive part in an EV?” he questioned.

Ten years ago, such quotes from an auto industry executive were considered de rigueur, at least among mainstream automakers. Five years ago, such comments would have been met with perhaps some distain by hardened electric vehicle enthusiasts and advocates.

But for such comments to be made in 2016, less than two weeks after Tesla unveiled the Model 3 — a car it aims to bring to market in late 2017 for an entry-level price of $35,000 before incentives and which it has already received more than $350 million in pre-reservation refundable deposits for — Exler’s comments are downright embarrassing.

Especially so for Zetche, who despite considerable resistance from Mercedes-Benz’s hardened core fans is trying hard to ensure Mercedes-Benz can remain competitive in the increasingly electrified marketplace.


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  • Daniel Zamir

    I don’t think every OEM is going all in with electrics even when it becomes completely obvious it is the future.
    This is the story of IBM with the PC, Microsoft with the internet, Kodak with digital cameras, Nokia with the smartphone etc. etc.
    They all do the very reasonable thing which is to ask the customers what they want. For the horse and buggy age that would be ‘a faster horse’. A horse and buggy salesman is not set up to sell cars. His core customer base does not ask for cars, because they are the late adopters.

  • Matt Beard

    Hmm, Mercedes main EV-based competitor has a car with a battery capable of 300 real-world miles. Dr. Dieter Zetsche thinks that battery technology needs “a capacity increase of fifteen-fold” to be competitive. This means he expects to be able to drive from his HQ in Stuttgart deep into China without stopping to recharge once. That must be one impressive bladder!

    • Will Davis

      Honestly, anyone who says an EV needs to do 1500-miles isn’t worth listening to. It’s that simple. Merc’s CEO is gonna go the way of Kodak if he doesn’t wisen up

    • Farmer_Dave

      Actually it was Exler who said that, not Zetsche.

      • Matt Beard

        D’oh… so right! Too many people quoted for me to remember which said what.

        So, if this is the head of Mercedes-Benz USA then the comparison I should have given should be a USA one… that means the sort of EV he is saying is required is one that could drive from their US Headquarters in Atlanta to New York non-stop… then all the way across to San Francisco… then down to Los Angeles, then off to a final destination in Las Vegas. All without charging once.

  • Chris O

    Mercedes brass may still be in denial about the sort of paradigm shift Tesla has caused, it’s shareholders openly express worries about the future of this carmaker for lack of competitive vehicle offerings:

    Maybe that will wake up this engineering giant and make it see that some lame low AER PHEVs are not the answer to cars like Model S.

    For example: Mercedes “Model S killer”, the S550PHEV sold 118 copies in the US in 2015, while Tesla managed to shift 25,700 of its Model S. It really is about getting the concept right…

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