Daimler to hit the gas on electric shift after strong start to 2021

LONDON (Reuters) -Mercedes-Benz maker Daimler said on Wednesday it will accelerate its shift to electric cars as it builds on a strong start to 2021 despite a global semiconductor chip shortage, but gave no details of how fast its car line-up will go electric.

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The German company said it expected 2021 to be a significantly better year for revenue, and pretax profits than a pandemic-hit 2020.

In common with German rivals BMW and Volkswagen, Daimler benefited from Chinese demand for high-margin luxury vehicles in the second half of 2020, which helped sales to recover from production shutdowns in the first part of the year.

But a shortage of chips the auto industry uses in a range of functions, such as managing fuel economy and emergency braking, has meant much of the auto industry has struggled to maintain output.

Daimler said it planned to speed up the electrification of its product range, but did not provide any specific detail.

In 2019, Daimler said it expected plug-in hybrids or all-electric vehicles to make up more than 50% of its car sales by 2030

“We want to accelerate the electrification of our product portfolio,” Chief Executive Ola Källenius said. “It’s our goal to reach this target sooner.”

When asked during a video conference call with investors why Daimler had not provided updated targets for accelerating electrification, the carmaker’s CEO said this would depend on many factors, including the availability of charging infrastructure for electric cars.

Källenius said Daimler will retool two of its oldest German plants, Untertürkheim and Berlin-Marienfelde, and retrain workers to make electric car components as well as parts for fossil-fuel models.

Daimler will next month unveil the EQS, an all-new electric Mercedes-Benz sedan using a dedicated electric vehicle platform. The company said on Wednesday the EQS should have a battery range of up to 770 kilometers (478 miles).

CEO Källenius said the EQS can also be charged up to a range of 300 km in 15 minutes. Carmakers are developing faster charging batteries for consumers used to filling combustion engine fuel tanks in just minutes.

Across the industry, carmakers are racing to adapt as CO2 emissions targets tighten in Europe and China.

This month, BMW said it expected at least 50% of its sales to be zero-emission vehicles by 2030.

Sweden’s Volvo said this month its line-up would be fully electric by 2030, and Ford said in February its European models would be too.

While it focuses on electric cars, is preparing to list its truck making unit, Daimler Truck, which it said should happen by the end of 2021.

The company announced plans to spin off the unit, the world’s largest truck and bus maker, in February, seeking to increase its investor appeal as a focused electric, luxury car business.

Reporting by Nick Carey. Editing by Emma Thomasson, Mark Potter and Barbara Lewis