Customers can't afford pricey electric vehicles, so the German giant is reportedly rethinking its strategy.
Canadian Mercedes-Benz dealers report that the automaker may be slowing its transition to electric vehicles, said various agents at a North American retailers meeting last month.
According to Automotive News Canada (ANC), dealers claim Mercedes has noticed consumer hesitancy over buying expensive luxury EVs in an economy battered by inflation and soaring interest rates. Perry Itzcovitch, dealer principal of Mercedes-Benz Downtown, told the publication that Mercedes is all for the electromobility. “But people are value-conscious. Interest rates have increased, and people are a little tighter [with their budgets].”
Another dealer principal from Calgary, Jim McManes, claims company representatives told him that the automaker won't transition to EVs as quickly as previously planned. “They have come to the realization that consumers have a role to play in this decision. They have to listen to what consumers want. Many just can't afford electric vehicles,” said McManes.
In the United States, Mercedes offers five EVs, the most affordable of which is the $52,750 EQB. The combustion-powered GLB 250 has a considerably lower starting price of $39,800.
Mercedes-Benz Canada officials were unwilling to disclose details on the matter but told ANC that Mercedes EV sales are slowly strengthening. “In Q1 2023, Mercedes-Benz Canada set a new quarterly sales record for Mercedes-EQ vehicles. “Led by the EQB SUV [136 units], the company sold 332 Mercedes-EQ units,” said spokesperson Zak Paget.
This mirrors what Mercedes CEO Ola Kallenius said last year. The chief executive told reporters that the EQ lineup is proving so popular that “we're doing everything to get the cars to customers as fast as we can.”
Paget added that Mercedes is still committed to “offering all-electric vehicles wherever market conditions allow,” as per the automaker's Ambition 2039 document.
However, dealer principal McManes says not all markets in Canada are so keen on EVs. He referenced freezing temperatures, suggesting reduced range in winter – an issue cheaper ICE cars don't have.
So what's the solution? According to Canadian Mercedes-Benz dealers, the luxury automaker will pay more attention to hybrid vehicles while continuing to offer a line of ICE models. Itzcovitch also claims the company will put a greater emphasis on affordable products. Interestingly, Mercedes-Benz announced in 2022 that it would pivot towards the high-end luxury segment and discontinue certain low-end models like the A-Class.
“For a while there, every car company thought it was invincible, but we're going into a new business model and a new economy. It's a wake-up call for all of us,” said Itzcovitch.
Of course, we'll have to wait and see whether Mercedes will introduce this new strategy in the coming years. Of course, we can still expect the Three-Pointed Star to introduce many electric vehicles in the coming years. This includes the new electric CLA and GLC.
These vehicles have already been previewed to North American dealers, who claim the CLA is more prominent than its gas-engined sibling and should be able to travel 400 miles on a single charge. That would mean the electric CLA will battle the popular Model 3. It should do well, especially if Mercedes can get the price right. Remember, the Model 3 is an absolute steal at the moment.
The electric GLC will reportedly have softer styling than the existing model and should wade into battle with 300 miles of range. There's even a rumor that Mercedes may drop the confusing EQ nomenclature when these models arrive.
Keyword: Mercedes Might Have Jumped The Gun On EVs In America