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Market to dictate speed at which Mercedes-Benz electrifies its portfolio

Samantha Chiew
Samantha Chiew • 8 min read
Market to dictate speed at which Mercedes-Benz electrifies its portfolio
Steinhoff: Mercedes-Benz will be doubling down our efforts to develop the most desirable EVs for our customers. Photo: Albert Chua/ The Edge Singapore
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The switch from internal combustion engine (ICE) vehicles to electric vehicles (EV) is one of the biggest transformations in the automotive industry, says Claudius Steinhoff, president and CEO of Mercedes-Benz Singapore.

“If there was ever a better time to be in the automotive industry, it would be now,” says Steinhoff, who works for a company whose founder Carl Benz invented the first automobile about 138 years ago. “It is not only our task, but our duty and our honour to now drive the change and be at the forefront of this electric era,” he adds.

Amid climate change and the global push for sustainability, the ICE industry recognises its role in reducing emissions harmful to the environment, while balancing the critical function of providing individual mobility.

The company and the industry need to bear the responsibility of balancing both sustainability and mobility, says Steinhoff. “EVs have been the most promising technology thus far. Therefore, we will be doubling down our efforts to develop the most desirable EVs for our customers.”

While Mercedes-Benz is best known to be a brand that is associated with luxury and status, the company is launching new models across different segments to smoothen the market’s transition into EVs instead of just confining itself within the top tiers of the automobile market. Currently, the brand has eight EVs in the market ranging from compact to luxury models. “I believe this is the right thing to do to support climate change. This is our business going forward and we are just beginning to launch our EV models,” adds Steinhoff.

Already, Mercedes-Benz has its EQA and EQB EVs, compact models boasting an impressive range of about 500km per full charge. This year, the company will be focusing on the top-end side of its portfolio and launching top-end luxury models, such as the Maybach EQS SUV.

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The vision is to build “the world’s most desirable EV and the way Steinhoff sees it, it is a combination of two things: Heart and mind. The heart refers to the emotional aspect of owning a vehicle. “It is something we also call iconic luxury. It is how the cars look and feel, creating memorable moments for its owners,” he explains.

The mind, or the more rational part, is what Steinhoff refers to as “leading technology” as Mercedes-Benz applies the highest-end technology into its range of EVs. “This is related to everything concerning the inside of the car, such as the electric drive train, range, charging speed, driving comfort, noise level in the car and so much more. Safety has also been one of our biggest promises at Mercedes-Benz for over 130 years and we want to bring it to the next level with our EVs,” says Steinhoff.

 

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New era of cars

While the EVs are indeed more eco-friendly, they have significant shortcomings, specifically range.

On average, an ICE vehicle can move about 700km on a full tank of fuel while EVs average around 430km with a fully-charged battery. For dense urban environments such as Singapore, the issue is not as pronounced as long inter-state drives.

Nonetheless, manufacturers are paying full heed to this engineering challenge. “Range is one of the biggest concerns in the market now that is affecting people’s decision to purchase an EV. We have heard the people and we are working on it,” says Steinhoff.

Mercedes-Benz’s EQA and EQB compact models have a range of about 500km while its EQS has a range of up to 760km on a single charge. Steinhoff also shares that Mercedes-Benz is working on a concept car at the moment that could boast a range of about 1,200km on a single battery charge.

Another common worry is the easy availability of charging points, as well as the time it takes for a full charge. For ICE vehicles, it is as simple as pulling up to the nearest petrol station and filling up the tank within minutes. Until EV charging networks become as dense as petrol stations, this luxury is unfortunately not available for EV owners.

“We need to make this process as comfortable as possible for car owners,” says Steinhoff. He shares that the Singapore government has been working on increasing charging points across the country and this has helped to alleviate the worries of EV drivers. However, there is still more work to be done on this end.

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Mercedes-Benz is also offering its car owners mobile charging services. It has partnered with local charging company PowerUp that will offer mobile fast charging services, as it charges a vehicle through a battery source in its van. “On average, the mobile charging service can charge a car up to 80% in about 45 minutes. And they provide a carwash service while your car is being charged,” tells Steinhoff.

Currently, there are about 11,000 EVs in Singapore and about 4,000 public chargers, says Steinhoff. This translates to less than three vehicles to one charger, which he believes is a comfortable ratio.

 

Sustainable mobility

While Mercedes-Benz aims to ensure that its EV models address common issues in the market and remain an eco-friendly alternative to ICE vehicles, Steinhoff points out that it is also important for the company to make the sourcing and production of the EVs and its batteries as sustainable as possible.

“It is an important point in the value chain for the batteries to be sustainable. This transition is happening and it started with the sourcing of raw materials. That has to be sustainable. We are also making sure that human rights are another aspect to consider,” says Steinhoff, adding that since 2022, all Mercedes-Benz production sites are net carbon neutral.

Mercedes-Benz is committed to “green” the whole EV production process from start to end. The brand is also in the process of building a recycling facility in Germany that will be doing nothing else but recycle EV batteries.

Just to be sure, the company is constantly taking in market signals on its electrification journey. On Feb 22, it announced that sales of EVs will account for up to half of the total by 2030 — five years later than its earlier forecast made in 2021.

“The pace of the transformation to electric mobility is determined by market conditions and our customers’ requirements,” says Ola Källenius chairman of the board of management of Mercedes-Benz Group in the company’s 2023 annual report released on Feb 22.

“We will be prepared for every kind of market scenario. The motto for the production of our vehicles with combustion engines is ‘tactical flexibility’. When it comes to electric mobility, our strategic course is to create the preconditions for becoming all-electric,” he adds.

Regardless of how quickly the shift will be, the company is making sure it is ready. Last year, the company invested EUR10 billion ($14.5 billion) in R&D, of which EUR 9.1 billion was allocated to Mercedes-Benz Cars, where it focused on the development of the new platform generations, which are designed for electromobility. It has also intensified its R&D into digitalisation and automated driving.

As Steinhoff reinforces Mercedes-Benz’s commitment towards sustainable mobility, he admits that on a global scale, the brand cannot completely remove or stop producing ICE vehicles. While Singapore has policies in place to have all EVs on the road by 2040, this goal is not as easily achievable for large countries and countries where electricity is expensive.

Hence, Mercedes-Benz will be keeping a very competitive ICE portfolio in place, at least until 2030. “Then when that time comes, we will see how to assess our offerings. We are also making our ICE cars more efficient today and having them mildly hybrid to make it more fuel efficient,” says Steinhoff.

This shows the brand’s agility, which has been its strength from the very start, allowing it to be flexible amid changing market conditions. While certain brands in the market have fully committed to a full EV portfolio in the years to come, Mercedes-Benz is allowing itself the space to pivot in the uncertain environment.

Overall, Steinhoff believes that Singapore, with its legions of car and technology fans, has a special role to play in the region about EV adoption, as many of the learnings here have been introduced to other markets. “I believe that Singapore has a great starting point and I believe that if we cannot make it in Singapore, then we cannot make it anywhere else. The range issue is less of a concern in Singapore, the government has its 2030 Green Plan and already put in the right set of measures,” he says.

 

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