Daimler will shrink with shift to electric, autonomous cars: CEO

By Edward Taylor FRANKFURT (Reuters) - Daimler will be a smaller company five years from now, focused on capturing recurring revenues with software-based services as Mercedes-Benz seeks to redefine luxury in an era of electric self-driving cars, Chief Executive Ola Kaellenius said. The Stuttgart-based company founded by Carl Benz, who patented the first gasoline-powered car in 1886, is accelerating plans to shift the carmaker beyond combustion-engine vehicles, a step which will result in job losses

Reuters November 13, 2020 00:06:04 IST
Daimler will shrink with shift to electric, autonomous cars: CEO

Daimler will shrink with shift to electric autonomous cars CEO

By Edward Taylor

FRANKFURT (Reuters) - Daimler will be a smaller company five years from now, focused on capturing recurring revenues with software-based services as Mercedes-Benz seeks to redefine luxury in an era of electric self-driving cars, Chief Executive Ola Kaellenius said.

The Stuttgart-based company founded by Carl Benz, who patented the first gasoline-powered car in 1886, is accelerating plans to shift the carmaker beyond combustion-engine vehicles, a step which will result in job losses.

"The next five years we will become a smaller company," Kaellenius told a Reuters Events broadcast on Thursday. "We will have a fundamental change in the industrial footprint on the powertrain side," he said.

Jobs will disappear because it takes less time to build an electric car than a conventional gasoline or diesel version.

That's because an electric car's battery and motor have only 200 components, compared with at least 1,400 parts found in a combustion engine and transmission, according to analysts at ING.

The shift away from fossil fuel requires the carmaker to double down on efficiency so it can free up resources to build electric and self-driving cars, Kallenius said.

"We are hiring a lot of new software engineers, experts in battery chemistry, electrification," he explained.

Making Daimler smaller also fits with a new era where luxury no longer defines itself through opulence and excess but also through sustainability and efficiency.

"There is no doubt in our minds that the footprint that this produce leaves on this Earth needs to be smaller. That is part of the modern luxury promise," Kaellenius said.

Mercedes-Benz is tapping engineering expertise from its Formula One team to build the EQXX, an electric vehicle which aims to be the most efficient vehicle capable of taking passengers from Stuttgart, Germany, to Marseille, France, on a single charge.

"It is a pre-development project to introduce new technologies," Kaellenius said.

Daimler also wants to offer customers new digital services so it can make money with new, recurring sources of revenue such as assisted driving functionalities and infotainment services when it unveils a new vehicle car operating system in 2024.

"Think about it like an iPhone," Kallenius said, explaining that with new software updates, new services and functions can be included. "You can add to it," he said. "That’s the beauty of it."

To invest in digital tech, Daimler plans to tap growth in China, potentially by building new models in the market where Mercedes-Benz sees the biggest growth potential over the next 10 years.

"If we have individual models which reach a critical mass in China ... that’s possible," Kaellenius said, adding that no decision has been made to localise production of new models.

"It depends on how the market develops," he said.

(Reporting by Edward Taylor; Editing by Jonathan Oatis)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.