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‘Intense Competition’ Expected By Daimler CEO If Tech Giants Enter Electric Vehicle Market


04/18/2021


‘Intense Competition’ Expected By Daimler CEO If Tech Giants Enter Electric Vehicle Market
If tech giants such as Google, Apple and Alibaba decide to launch their own electric vehicles, the German auto maker Daimler will face stiff opposition from these new entrants, believes Daimler’s chief executive.
 
With the race for electric vehicles heats up globally, there have been multiple reports that suggest that the tech companies could soon launch products that combine hardware and software even though none of the tech giants have yet started to sell cars made by them.
 
“There will be intense competition,” Daimler CEO Ola Kallenius said in in a recent television interview when he was asked about whether he or the company was worried about large tech and digital companies jumping into the electric vehicles industry.
 
“When an industry goes through transformation, I think it’s natural that new players look at the industry,” he said.
 
Kallenius said Daimler will “look at what the brand stands for and take that into the next technological era” and added that if the company does that well, it will be able to build on its position.
 
The comments from Kallenius came at a time when Daimler owned Mercedes Benz is launching an electric version of its flagship S-Class luxury sedan.
 
“It’s kind of the start of a new era,” Kallenius said, and added that there’s a lot of “curiosity” surrounding the new vehicle.
 
Daimler expects to make money on the vehicle from the moment it goes on sale, Kallenius said even though the pricing for the electric powered luxury sedan is set to be announced in the summer.
 
For vehicles that are powered by a large electric battery, the variable costs are higher when compared to what they are for vehicles that are powered by a traditional internal combustion engine, he added.
 
“Our task during this decade of transformation is on the one hand to drive the variable costs down and restore in all our segments a margin parity,” Kallenius said.
 
He added that the technology behind electric vehicles is “still in its infancy” and there is a “lot of work to do”. “It will be scaled and we will have technological developments. I’m optimistic that we will be able to restore the margins that we have been used to,” he said.
 
Over the last 12 months, the stocks of Daimler have skyrocketed and earlier this week they were higher by more than 173 per cent year over year on Friday.
 
“We have positive momentum in our stock,” Kallenius said. The significantly large surge in the company’s stock price is because of the improved financial performance of the company as well as the company’s “technology strategy for the future.”
 
However compared to the market capitalization of around 185 billion euros in 1998, the current market capitalization of the company has slipped to just about 80 billion euros. In comparison, the market capitalization of the United States based electric car maker Tesla is at $694 billion which is the highest in the auto world.
 
“If we look at the total market caps of every single auto player in the world right now, you end up with an impressive number,” Kallenius said.  “We need to make sure that the distribution of that total market cap moves more in our favor. That’s what we’re working on,” he added.
 
(Source:www.cnbc.com)