Mercedes Makes ‘Course Correction’ to Extend Combustion Engine Life

It was only a few days ago that Audi announced plans to continue producing gas-powered cars longer than initially intended, and now its long-time rival, Mercedes, is essentially saying the same thing. Head honcho Ola Källenius admitted the Stuttgart-based automaker has had to make a “course correction” and retain internal combustion engines longer than initially planned. As a refresher, the company announced a few years back that it aimed to go fully electric “where market conditions allow” as early as 2030.

The Mercedes chairman and CEO told German magazine Auto Motor und Sport that “electrified high-tech combustion engines will run longer than we originally expected.” While he didn’t provide an exact timeline, he referred to the dual gas-and-electric strategy as the optimal solution given the slower-than-expected EV adoption: “In the current situation, I think the most rational approach is for an established manufacturer to do both and not neglect either technology.”

Automakers retreating from their previously lofty EV goals has fueled a misconception about a general decline in the electric car market. While it’s true that some companies are struggling, including Mercedes, which reported a 23% drop in 2024, the overall segment is growing. The International Energy Agency reports EV sales jumped by more than 25% last year, reaching 17 million vehicles.

Additionally, BloombergNEF’s annual Electric Vehicle Outlook, published just yesterday, projects sales of plug-in hybrids and electric vehicles will surge by 25% this year compared to 2024, reaching nearly 22 million units. As you’d expect, China is estimated to account for the lion’s share, with almost two-thirds of PHEV and EV sales, according to the same study.

As with rivals BMW and Audi, China remains Mercedes’ largest market, despite a 7% decline in sales last year to 683,600 combustion and electric vehicles. Speaking of which, Källenius claims Chinese buyers “don’t just use their cars to get from A to B. For many, it’s also a second living room.” Maybe that explains the heavy reliance on screens in recent models wearing the three-pointed star.

Germany’s luxury trio will continue to offer a mix of combustion and electric cars well into the 2030s, appealing to both camps. It remains unclear what will happen in countries that follow European Union regulations, which from the middle of the next decade will prohibit automakers from selling new vehicles that emit harmful pollutants. Some car companies are likely hoping for a delay in the ban, but the EU shows no signs of backing down.