The automobile market, and in particular electric vehicles, is driven by a fierce price competition. This is, in absolute terms, pretty good news as we see some manufacturers lower their prices with some regularity to increase volumes, but also gain an advantage over competitors.

The price war in the electrical sector was initiated by Tesla and forced many other manufacturers to follow the same path, not to see their market share melt like snow in the sun. But not everyone will play this little game, at least not Mercedes, as evidenced by the words of its CEO Ola Kellenius.

“We are always looking for the best compromise to ensure the viability of the company. We look for a balance between supply and demand in each market. But for a brand like Mercedes, too drastic a change is not a good thing. They are not the right solution and do not give the expected results”– clarifies the presenter to the American InsideEVs journalists. For us, the goal is clear: mobility must become zero-emission. There are no ifs, ands, or buts.

Complex economic context

However, the current economic situation does not favor this transition. Ola Kellenius also clarified that inflation, followed by higher interest rates, created the situation “in which macroeconomic cooling may occur”. However, the economy, which “cool” is not ideal for triggering profound strategic changes for a company such as the one Mercedes is currently facing.

The changes involve significant investments and “We are investing billions, tens of billions not only in electrification, of course, but also in the rest of the automotive industry”said the boss of Mercedes.

Mercedes does not operate in all markets

To make matters worse, some markets that Mercedes relied heavily on are not delivering the expected results: “Many observers, economic analysts, professors believed that China would immediately return to growth after Covid, but the market is a bit flat.”

“As a builder, you have to decide how to approach the market in this context”the presenter explained “And for Mercedes, price stability is crucial. Make sure the beautiful cars we build have a long life, residual value, and more. is a top priority for us. Therefore, we do not succumb to the logic underlying the depreciation of our products. »

“However, we must strive to be flexible in other areas. For example, studying the full range with a series of models with different degrees of electrification. We can build electric, hybrid and petrol cars on the same lines in many of our factories. This allows us to quickly adapt to the different requirements of the Chinese, US or European markets. We will not follow Tesla’s pricing lead. »

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