As Tesla rises, Mercedes-Benz prepares for all-EV future whenever customers are ready

Mercedes-Benz is prepared to switch to an all-electric line-up as soon as Australian customers are ready for it.

While Mercedes hasn’t set a firm end date for the development and sale of internal combustion vehicles - something rival brands, such as Audi, have done - the company is preparing to make a wholesale switch to electric vehicles (EVs) whenever the market demands.

“We can be flexible,” said Jerry Stamoulis, Mercedes Australia’s Head of Media Relations.

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“With a brand like Mercedes-Benz, without a doubt we could move to full-electric, but the market will dictate that move. By 2025, locally, every vehicle we sell locally will have some kind of electrification - from mild-hybrid to fully electric.”

EV sales still represent a relatively small part of the Australian new car market but are on the rise. According to the latest new car sales data released by the Federal Chamber of Automotive Industries covering the first five months of 2023, EVs are up more than 275 per cent on the same period in 2022.

Mercedes is enjoying its own EV surge as it introduces more all-electric models, most recently the EQE sedan. Up until May, EV sales for the German brand represent 8.2 per cent of its total Australian sales, which is a jump up from the 4.3 per cent compared to the same time period in 2022 and just 2.3 per cent in 2021.

In the first five months of 2023 Tesla has out-sold Mercedes.

Stamoulis said the local operation will continue to discuss its EV growth strategy with its German headquarters but is adamant the company is flexible based on what customers buy, so he was reluctant to put a timetable on it.

“It will be market-driven,” he said. “We’ve seen it with diesel, we’ve seen it with plug-in hybrids. The number of plug-in hybrid vehicles that we had on our fleet has reduced dramatically.”

Stamoulis added: “Part of our normal planning process is to give the feedback back to headquarters on a regular basis, like we do today, to say what we think the future is for certain cars.

“So, if we see a major shift to electric, it doesn’t happen overnight, we can have those conversations to say ‘we need to be more or even all-electric’ - if we need to do that we can and vice versa. And if there isn’t the appetite for electric, well there needs to be other conversations,” he said.

Mercedes is enjoying its own EV surge as it introduces more all-electric models, most recently the EQE sedan.

The shift towards EVs is shaking up the Australian car industry and could see Mercedes lose its place as the best-selling luxury brand in the country to all-electric upstart, Tesla. In the first five months of 2023 Tesla has out-sold Mercedes, with the American brand selling 18,599 vehicles compared to Mercedes’ 10,216 passenger cars and SUVs.

While Tesla seemingly competes with Mercedes on price, Stamoulis isn’t concerned about sales chart rankings and instead says the company will use other measures to determine its place in the automotive landscape.

“We’re not focused on volume, but we are focused on being the number one luxury brand in Australia and being number one in the segments that we play in where we have direct rivals,” he said. 

“It’s the experiences that we can give to our customers and the service that we give them within our dealer network.”