‘Current situation is not sustainable’
Mercedes-Benz is more negative about its profit forecast for this year. There is one overriding reason for this: according to the brand, the EV market forces unhealthily low profit margins.
Mercedes recorded a 6.8 percent lower profit in the third quarter, reports Reuters. The annual forecast is not really adjusted, but the German brand is now aiming for the lower limit of the forecast of 12 to 14 percent that it previously made. In short: more likely 12 than 14 percent.
Even more interesting than those figures is what CFO Harald Wilhelm has to say about them. Wilhelm says the current EV market is leading some brands to offer EVs cheaper than fuel-powered equivalents, while building an EV is still much more expensive. “I cannot imagine that the current situation is sustainable,” Wilhelm reportedly said. He is referring to the trend that EVs are becoming increasingly cheaper, partly thanks to the arrival of Chinese brands and the significant price drops at Tesla. Anyone who still wants to participate in the EV world must price the products competitively, even if it has a Mercedes star on it.
Despite this, according to the brand, ‘ruthless market’, Mercedes would stick to its EV targets, but says that profits may have to be supplemented with higher returns on cars with a traditional combustion engine on board.
– Thanks for information from Autoweek.nl