Bad EV sales performance has forced Mercedes to reinvest in traditional combustion powertrains and give all cars lookalike designs
February 20, 2025 at 10:38
- Mercedes will launch almost 40 new models over the next two years.
- More than half will be ICE-powered in response to falling EV demand.
- Mercedes will cut costs by 10% by 2027, but won’t shut German plants.
Mercedes says it will cut production costs over the next two years while at the same time, it will roll out almost 40 new or heavily revised models in an effort to reverse its fortunes. The automaker expects earnings to take a big hit in 2025 and thinks a renewed focus on traditional combustion power could help stop the slide.
It wasn’t long ago that Mercedes was vowing to go EV-only in major markets by 2030, but terrible sales figures for many of its electric cars has prompted a major rethink. The brand isn’t turning its back on EVs by any means – 17 of the new models it will launch by 2027 will be battery-powered. But 19 of the new cars will have combustion power and live on well into the 2030s.
Related: Customers Pull The Plug On Mercedes EV Sales, EQS Plummets 52%
This time, however, there will be very little design differentiation between ICE and EV models, even in the top-end models that ride on entirely different platforms and unlike smaller cars that will use a common architecture for both electric and combustion powertrains. The egg-shaped EQS has been a sales bomb for Mercedes and having learned from that mistake, future EVs will look like their gas brothers.
New products in showrooms this year include the CLA sedan, which will be available in EV and ICE forms with very similar prices and spawn a family of cars built on the same platform. The new CLA model family will feature many different body styles, including an SUV and wagon. All-electric GLC and C-Class cars are also on the way and Mercedes confirmed it is working on an E-Class EV to rival BMW’s i5.
On the combustion side, the company will soon unveil a facelifted S-Class and says engines with four to eight cylinders will be available across the Mercedes range, equipped to meet Euro 7 emissions standards. And it’s also hanging onto the mighty V12 engine for its flagship sedans.
Earnings at Benz’s car division dropped by 39 percent to €8.7 billion ($9.1 bn) during a tough 2024 and it expects 2025 to be even more brutal. It has pledged to cut costs by 10 percent by 2027 and reduce them even further by 2030.
Despite the announced cuts, Mercedes won’t shut down its German factories but it will move production of at least one model line from Germany to Hungary, where production is 70 percent less expensive. Mercedes also says it will increase its focus on building models for America and China within those countries to future-proof itself from looming tariff threats.
