Summary
- Mercedes electric car sales have dropped significantly in the third quarter of 2024, contrasting sharply with the increasing sales of its rival, BMW.
- Mercedes-Benz has recently adjusted its ambitious EV targets for 2030, reflecting a broader industry trend of declining consumer interest in electric vehicles.
- The company has announced plans to extend its investment in internal combustion engine development, suggesting a more balanced approach to powertrain technology.
- Other automakers, including Volkswagen and Volvo, have also faced difficulties in achieving their EV sales goals, indicating a broader industry trend.
- The declining sales of electric vehicles raise questions about shifting consumer preferences and the long-term viability of the EV market.
Mercedes-Benz faced a challenging third quarter as its electric vehicle (EV) sales took a significant hit. Both its passenger car and van divisions saw a marked decline in demand for fully electric models, reflecting a broader global downturn in EV interest. This trend arrives just months after Mercedes-Benz announced a strategic shift, tempering its ambitious EV targets for 2030—a move that is closely correlated with this recent slump. Meanwhile, competitors like BMW have reported substantial gains in EV sales, highlighting a sharp contrast in the luxury automotive landscape.
The recent sales figures underscore the shifting dynamics in consumer preferences for electric vehicles and raise questions about Mercedes-Benz’s long-term EV strategy. As the industry continues to navigate a volatile market, Mercedes-Benz continues re-adjusting its approach to fully electric models and even announced the company will extend investment in internal combustion engine development further than anticipated.
Mercedes-Benz’s Electric Car Sales Drop in Q3 While BMW’s Soar
Mercedes-Benz seems to have lost its competitive edge in the electric car market. Last February, due to poor sales results of its battery-electric cars, the brand had to back off from its goal of being an all-electric car brand by 2030. Barely two months later, in March, the brand disavowed the EQ acronym that has identified its electric cars since 2021 and announced that, in the coming years, it would revert its electric vehicles to traditional model naming structures. During the third quarter of this year, Mercedes-Benz electric car sales experienced a 31% decline.
What’s worse is that not only are Mercedes EV sales plummeting in Q3 2024, but those of its main rival, BMW, have increased in recent months and remained high. The commercial results for the third quarter of the year do not lie. From July to October 2024, Mercedes-Benz sold a total of 42,500 electric passenger cars worldwide, accounting for 503,600 car sales overall. This represents a 31% decrease in sales compared to the same period in 2023.
Two other concerning facts accompany this figure: it’s 7% lower than the number of electric cars sold in the second quarter of the year, and this decline in zero-emission vehicle sales has also affected the brand’s commercial vehicle division (vans), which also saw a 31% drop in sales of its electric vans in the third quarter of the year.
Mercedes finds these sales figures even more challenging, particularly considering that the company’s arch-rival, BMW, achieved significantly better results in the third quarter of the year. Specifically, the Bavarian carmaker sold 103,440 units overall during this period, more than twice as many as Mercedes, and it also saw a 10.1% increase in sales year-over-year.
Mercedes’ CEO Says They Will Invest More in Internal Combustion Engines
Mercedes-Benz is committing to developing separate platforms for internal combustion engine (ICE) and electric vehicle (EV) models to meet ongoing market demand for both. CEO Ola Källenius emphasized the need for dedicated architectures to optimize performance, space, and technology. He cited the upcoming S-Class, expected in 2028, as a prime example, explaining that retrofitting ICE models as EVs, or vice versa, leads to compromises in space and performance.
Källenius acknowledged the cost increase from dual-platform development but noted that Mercedes would share as many non-powertrain components as possible between ICE and EV models to manage expenses. The company’s shift is already evident with the new electric G-Class named the G580, signaling a gradual phase-out of the EQ sub-brand as EVs integrate more closely with their ICE counterparts.
Despite these changes, Mercedes remains committed to EVs while investing in new combustion engines that meet Euro 7 standards. Källenius stated that Mercedes will continue supporting both if the market remains split between ICE and EVs by 2030. This strategy positions the brand as adaptable, and ready to lead in luxury automotive innovation regardless of market shifts.
Other Automakers Are Also Struggling
Mercedes-Benz is not the only automaker to struggle in 2024. Overall EV sales in 2024 have dropped for most manufacturers, forcing them to rethink their EV goals for 2030. For instance, in Q3 2024, Volkswagen Group’s global deliveries of all-electric vehicles fell nearly 10% year-over-year, with 189,400 units delivered compared to 209,900 in 2023. Year-to-date, EV deliveries dropped 4.7%, totaling 506,500 versus 531,500 last year. EVs represented 8.7% of VW’s global deliveries this quarter. In Europe, EV deliveries fell 11.9%, while China saw a 5.2% increase. However, U.S. deliveries plummeted by nearly 42%, from 20,500 units last year to 11,900 this quarter.
Volvo is another example. In early September, the Swedish carmaker scaled back its profit forecast after announcing it would slowly walk full EV plans for 2030. Volvo revised its operating profit margin target to 7-8%, down from over 8%, and dropped its sales goal of 550-600 billion SEK. This marks the second target cut this year, after lowering EBIT and sales targets in January from initial 2021 projections. Volvo Cars experienced a decline in overall car sales of 19.9% in Q3.
