Mercedes To Cut Costs By $4.8 Billion To Fund EVs

Mercedes-Benz intends on cutting costs by $4.8 billion as it pushes forward with its ambitious electric vehicle goals.

Speaking to AutoNews on the eve of the Frankfurt Motor Show, Mercedes chief financial officer Frank Lindenberg said the automaker will sacrifice short term profits in favor of higher electric vehicle sales.

“We will still be aiming at 10 percent return on sales, but we have to be prepared for a corridor of 8 percent to 10 percent,” he said.

By 2025, the brand believes up to 25 per cent of its sedan, coupe and utility vehicle sales will be accounted by all-electric vehicles. Lindenberg also said that about three-quarters of the future EVs from Mercedes-Benz will replace traditional internal combustion engine powered offerings.

Daimler admits that electric vehicles will have lower profit margins at the beginning of their life cycle but believes they will eventually become just as profitable as ICEs.