Why Mercedes does not intend to lower the price of its electric cars?

The automobile market, and that of electric cars in particular, is driven by a fierce battle over prices. This is, in absolute terms, rather good news since we see certain manufacturers lowering their prices with a certain regularity in order to make more volume, but also gain the upper hand over the competition.

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

“We are always looking for the best compromise to ensure the viability of a business. We seek the balance between supply and demand, on each market. But for a brand like Mercedes, too drastic changes are not a good thing. They are not the right solution and do not give the expected results”specifies the leader to the American journalists ofInsideEVs. “For us”, the objective is clear: mobility must become zero emissions. There is no ‘if’, ‘and’ or ‘but’”.

A complicated economic context

However, the current economic situation does not facilitate this transition. Ola Källenius also clarified that inflation, followed by rising interest rates, created a situation “in which macroeconomic cooling can occur”. However, an economy that “cools” is not ideal to launch a profound strategic change for a company such as the one Mercedes is currently facing.

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

Mercedes does not perform in all markets

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

“As a builder, you have to decide how to approach the market in this context”explained the leader, “and for Mercedes, price stability is crucial. Ensuring that the beautiful cars we build have a long lifespan, residual value, etc. is a top priority for us. We therefore do not give in to the logic underlying the depreciation of our products. »

“However, we must strive to be flexible in other areas. For example, studying a complete range, with a series of models having different degrees of electrification. We can build electric, hybrid and gasoline cars on the same lines in many of our factories. This allows us to adapt quickly to different market demands, whether in China, the United States or Europe. We won’t follow Tesla’s lead on pricing. »

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