Supervisory Board confirms Business Plan: Mercedes-Benz to invest 60 billion euros into the future
- Daimler Supervisory Board endorses 2022 - 2026 Business Plan
- Investments of 60 billion euros for passenger cars and vans confirmed
- Focus on electrification, digitalization and automated driving
- Supervisory Board backs plan to raise efficiency
- Margin targets reiterated also during accelerated shift into electric-only era
Daimler AG’s Supervisory Board at its meeting today approved the Mercedes-Benz Business Plan for 2022 to 2026, endorsing the strategic plan for Mercedes-Benz to go fully electric. Following the Daimler Truck spin-off, Mercedes-Benz will consistently focus on profit and growth opportunities in the passenger car and vans businesses. The most valuable luxury brand in the world will strive for leadership in the area of electric drives and car software.
For the transformation into a software-driven and emissions-free future, the Supervisory Board signed off on an investment plan for the years 2022 to 2026 of more than 60 billion euros. Although the company plans to reduce capex, research and development expenditure for the electrification of the product portfolio and digitalization measures, including steps towards automated driving, will remain at a high level.
Ola Källenius, Chief Executive Officer of Daimler AG and Mercedes-Benz AG:
“Our goal is technological leadership in the automotive luxury segment and in the area of premium vans while remaining committed to our ambitious margin targets. Mercedes-Benz has what it takes: a clear strategy, a highly qualified and motivated team, as well as strong support from the entire supervisory board. With the most desirable cars we want to grow profitably and create sustainable value for our customers, employees, shareholders and partners.”
The endorsement by the Supervisory Board of the Mercedes-Benz Business Plan reinforces the company’s commitment to sustainably achieving the margin targets communicated in October 2020 and reiterated in July 2021, also during an accelerated transformation towards an electric-only era. An important lever for achieving this is to increase net revenues per vehicle. In addition, a gradual shift toward a direct sales model, which includes control over pricing, is being sought. Rising revenue from digital services will further support results.
Mercedes-Benz is preparing to go all electric by the end of the decade, wherever market conditions allow. Against this background, the Supervisory Board supports existing measures to consistently increase efficiency and to lower fixed costs, as was communicated during the Mercedes-Benz Strategy Update on October 6, 2020 and reiterated on July 22, 2021. At the same time, the investment plan for 2022 to 2026 remains in line with the goal of cutting capex and research and development spending by more than 20 percent between 2019 and 2025 and to further reduce it beyond this date.
The key to achieving this is stringent prioritization of future investments – mainly by focusing on electric mobility. The company expects that the use of standardised battery platforms and scalable vehicle architectures - together with advances in battery technology - will contribute to a reduction in the variable costs of vehicles. The proportion of battery costs in a vehicle is expected to decrease significantly this decade.