Summary of Daimler’s Strategy: “Everyone Keeps Telling Us, The Future Is Electric, But We Are Not Convinced!”

The first and oldest automotive company in the world, Daimler with its Mercedes Benz brand, is struggling with the future. Former CEO Dieter Zetsche was not a fan of electromobility or autonomous driving, and after 13 years at the top, he has left the company almost hopelessly behind in these technologies. It is not surprising that Zetsche’s actually planned transition as Chairman of the Supervisory Board of Daimler has been overturned, because the old man represents the old too much.

Now his successor, Ola Källenius, has presented the new corporate strategy (link to slides and link to the videos) one and a half years after joining the Daimler management team, and it can be summarized in these points

  • Daimler wants to withdraw as a niche supplier to the automotive luxury segment;
  • This should increase profitability, which seems to be the absolute priority, no matter how;
  • Electric mobility should be a priority for all brands, but the combustion engine will remain the back door;
  • Actually, electrification is only done to achieve CO2 targets;
  • A separate operating system MB.OS is to be introduced in 2024;
  • Digital is held up, but apart from generalities it is not really explained what it is;

Was ist Intelligenz im künstlichen und menschlichen Sinn? Können Maschinen Bewusstsein entwickeln und wie würden wir das erkennen? Sind Maschinen fähig, Empathie zu zeigen und zu fühlen?

Das Buch verdeutlicht die vielfältigen Chancen und positiven Auswirkungen von KI auf alle Aspekte des gesellschaftlichen und wirtschaftlichen Lebens.

Spannende Gespräche mit KI-Vordenkern und KI-Praktikern aus dem Silicon Valley vermitteln dem Leser wertvolle neue Erkenntnisse und Mindsets. Ein unentbehrlicher KI-Ratgeber für Gegenwart und Zukunft!

€24,99 | 304 Seiten | 27.2.2020
Amazon | Plassen-Buchverlag

Thus, it is clear from the slides that the reasons for the electrification strategy lie purely in compliance with statutory emission limits, but not in the creation of a better driving experience or a desire for better sustainability of the company’s own technology.

“Attractive PHEV products will support reaching CO2 targets”

The first all-electric car platform for large passenger cars is due next year, 9 years after the launch of Teslas Model S, the platforms for mid-range and compact cars will come “later”.

“Later”(!)

It is somewhat unclear why the electric car platform is called “Electric first”. Should a combustion engine still fit into it?

Electric First(?) EV Architecture

German manufacturers also seem to have a certain fixation on gears. Already the Porsche Taycan has a two-speed transmission installed, which gives the car the worst range of all comparable electric cars. Mercedes cars are also supposed to be equipped with it. This already gives an idea how small the range will be and how unnecessarily expensive the vehicle will be by complicating an electric car with a gearbox.

EV transmission

No matter how you look at the numbers, Mercedes is focusing primarily on plug-in hybrids, which are only expected to be launched in unambitious timescales and quantities. Daimler does not expect more than 50 percent of its own vehicles to be somehow electrified until 2030.

A restrained electrical future

When it comes to battery cells, Daimler does not let its cards be played. The company believes it is well positioned through partnerships, its own research and development, and raw materials contracts, but is rather hesitant about allocating capital. Let’s be pregnant, but just a little bit. The Board of Management also hopes that kWh prices will fall below one hundred euros by the middle of the decade. Tesla, by the way, is already achieving this today.

Capital allocation

Like VW, Daimler is also working on its own operating system, MB.OS. This is to be launched in 2024 and is being developed by a distributed team at 9 locations. Even though Daimler talks a lot about digitization, very little concrete is said. For example, the term over-the-air updates (OTA) is only mentioned twice in subordinate clauses (slides 34 and 59)

What is MB.OS?

Daimler also entered into a partnership with NVIDIA to advance the development of autonomous driving. The previous partnership with BMW was terminated at the beginning of the year. Whether the new partnership will be so successful remains to be seen. NVIDIA is primarily a chip manufacturer, not so much a developer of software, in this case autonomous driving software based on neural networks. This corresponds to the situation of Sony or Canon, who build cameras and include image processing software. Good for the hobby photographer, but the professional gets software from specialists like Adobe. So we should expect Daimler entering a partnership with a specialist such as Waymo or Baidu.

Als 1977 Elvis Presley starb, wuchs die Zahl an Elvis-Imitatoren in kurzer Zeit so sprunghaft an, dass bei einer Fortsetzung des Trends im Jahr 2000 ein Drittel aller Amerikaner ihren Unterhalt als Elvis-Imitatoren verdienen würden.
Wieso kam es aber nicht dazu? Das lässt sich mit den Methoden des Foresight Mindsets erklären.
Zukunft lässt sich vorhersagen. Einigermaßen, mit einer gewissen Unschärfe jedenfalls. Diese Disziplin ist erlernbar und das ist zugleich die gute Nachricht. Man muss nicht erst auf Futuristen und Zukunftsforscher warten, die einem die nächsten Trends erklären. Organisationen können sich selbst darauf vorbereiten und ein strategisches Set an Werkzeugen in ihren Kanon aufnehmen. Die Werkzeugkiste in diesem Buch hilft dabei nicht nur zu reagieren, sondern ermöglicht, von Anfang an die Gestaltung der Zukunft mitzubestimmen.

€29,80 | 278 Seiten | 2.4.2019
Amazon | Verlag Franz Vahlen

It is not surprising that many investors could not be convinced by Daimler’s strategy. Sam Korus of Ark-Invest in New York, finds sharp words.

The ambitions for corporate social responsibility may turn out differently than expected. For example, although production is commendably carbon-neutral as early as 2022, by 2030 the majority of vehicles will be electrified and by 2039 they will be completely carbon-neutral. However, the timeframe is so far off that this goal could also be reached earlier, but not as expected. By then, it will have taken a long time to decide whether Daimler will still exist at all.

Carbon- neutral

If Carl Benz had developed a strategy back then for what the Daimler 2020 Strategy looks like today, Motor Car 1 would have looked like this:

Was ist Intelligenz im künstlichen und menschlichen Sinn? Können Maschinen Bewusstsein entwickeln und wie würden wir das erkennen? Sind Maschinen fähig, Empathie zu zeigen und zu fühlen?

Das Buch verdeutlicht die vielfältigen Chancen und positiven Auswirkungen von KI auf alle Aspekte des gesellschaftlichen und wirtschaftlichen Lebens.

Spannende Gespräche mit KI-Vordenkern und KI-Praktikern aus dem Silicon Valley vermitteln dem Leser wertvolle neue Erkenntnisse und Mindsets. Ein unentbehrlicher KI-Ratgeber für Gegenwart und Zukunft!

€24,99 | 304 Seiten | 27.2.2020
Amazon | Plassen-Buchverlag

This article was also published in German.

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