Daimler planning to cut down on R&D investment for electric vehicles

If you remember, just a couple of weeks back Mercedes-Benz announced a brand new concept EV at the Paris Motor Show . It had also announced a new brand for its upcoming lineup of electric vehicles called EQ. Now their parent company Daimler is planning to cut its annual research and development budget by $2.2 billion.

The company is hoping to restrict its R&D spending from $15.4 billion this year to $13.2 billion for the coming year. This can turn out to be a difficult task as Daimler’s brands have to produce conventional, hybrid as well as fully electric vehicles.The company’s Chief Executive Dieter Zetsche spoke to Bloomberg and confirmed the news after Daimler’s spending skyrocketed to announce its new EQ brand.

Daimler is expecting that in the next 10 years, 25 percent of all its deliveries will consist of electric vehicles and they can manage to cut costs, they can secure the company’s profitability in the future. With that Daimler will also have to make sure that it doesn’t lag behind as competing brands like Volkswagen, Volvo and many more who are investing heavily to produce electric vehicles in the coming 5-10 years.

One of the biggest competition for Daimler will be Tesla who is already mass producing EVs and is expected to increase production four-folds once its new Gigafactory starts operations.