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    Källenius Outlines EV Parity Timeline

    Stockholm (NordSIP) – The journey to net-zero carbon emissions by 2050 that the European Union set for itself in March 2020 requires all sectors of the economy to pull their weight. As the source of a quarter of all CO2 emissions from fuel combustion, the transportation sector is crucial for the successful achievement of this goal, particularly the automotive industry, which produces 39% of the CO2 emissions within that sector.

    The connection between the auto industry and carbon emissions means we pay attention to the long term electric vehicle (EV) strategies of big industry names, particularly when they are motivated by economic profitability. Most recently, reports in the global financial press suggested Ola Källenius, Chairman of the Board of Daimler, had announced that “Mercedes-Benz will earn as much from electric cars as its luxury combustion engine models by the end of this decade.”

    Such a goal is consistent with recent developments at Daimler. In October 2020 Källenius had already announced a “clear commitment to the full electrification of our product portfolio and our determination to ensure the business is fully carbon-neutral, in line with our Ambition 2039 target.”

    “Our strategy is designed to avoid non-core activities to focus on winning where it matters: dedicated electric vehicles and proprietary car software. We will take action on structural costs, target strong and sustained profitability,” Källenius added on that occasion.

    The announcement makes Daimler the first company to outline such a detained timeline for EV parity and follows the decision to split the parent company into a pure-play car company, Mercedes Benz, and a company focused on trucks and buses, Daimler Truck.

    That deal is in the works and should be completed by the end of the year. “A significant majority stake in Daimler Truck will be distributed to Daimler shareholders. The Daimler Truck business will have fully independent management, stand-alone corporate governance including an independent Chairman of the Supervisory Board, and is targeted to qualify as a DAX company. The transaction and the listing of Daimler Truck on the Frankfurt stock exchange is expected to be complete before year-end 2021.”

     

    Image Courtesy of Daimler

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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