Grim Warning About EVs Issued by the World's Largest Truck Maker, Don't Worry Yet

Martin Daum is Daimler’s CEO. He leads the company that owns Mercedes-Benz, which is also the one that makes a lot of trucks or, as recent data suggests, the newest trucks we see on the road worldwide. The man is worried about EVs and admits it publicly. Here’s why.
Martin Daum 6 photos
Martin DaumMartin DaumDaimler truckDaimler truckDaimler truck
Last year, Mazda was one of the first manufacturers to share their concerns about EV pricing. European representatives of the Japanese manufacturer said at the time authorities shouldn’t push the industry in only one direction. Long story short, they argued cars would get extremely expensive if the internal combustion engine had to die. People wouldn’t be able to pay, the industry wouldn’t have money for innovation, and everything would turn into a mess.

Not many people paid attention to what Mazda Europe said in 2021. Admittedly, there were other more important problems we were facing globally. But here we are today, when Daimler’s CEO is more or less taking the same approach. It may not be of much interest to you if you’re just a normal, average citizen with no plans to invest in a vehicle or a fleet sometime soon, but you should pay attention. This is underlining a problem almost all carmakers face. Ultimately, they’ll become our issues, as we’re the ones who pay the end price.

Martin Daum said in a talk with Financial Times that building battery-electric vehicles (BEVs) will “forever” be more expensive than internal combustion engine (ICE) ones. He argues that cells are too expensive, and shows that for making a new electric truck the biggest cost is the battery. According to him, the cell packs alone amount to the money needed for the engine, transmission, axle, tank system, and cooling in a traditional truck.

Even so, Daimler managed with its Mercedes-Benz, FUSO, Western Star, Freightliner, BharatBenz trucks and Thomas Built buses to more than triple its sales of BEVs. It delivered almost 455,000 units just in 2021.

Bring the alternatives!

This impressive sales result might sound like it was to be expected, since we’ve all thought EVs will have a lower cost, as innovation continues to happen over time. Right? Wrong! The CEO confirms Daimler will have to raise the already high prices at some point, because batteries aren’t getting cheap fast enough. Furthermore, he even thinks hydrogen might become the better alternative to BEVs and ICE cars or trucks – a path the company will follow for two reasons: the absence of expensive raw materials and a lack of competition.

Last year, Martin Daum served as Chair of European Automobile Manufacturers' Association (ACEA). He tackled this subject back then too, when he said "Europe's truck and bus industry is fully committed to the Paris agreement." But not without some public help!

"My colleagues and I want to make road transport CO2-neutral. But to achieve that we need more than the right vehicle technology. We also need the right infrastructure and cost parity. Our customers must be able to easily charge CO2-neutral trucks and buses, and they must be able to earn money with them. Otherwise, they won't buy them. It's that simple," declared Daum.

In this regard, the German government has already closed deals with other countries to source hydrogen, and it is eyeing the development of a charging network. At the same time, other key players think hydrogen might be a way to preserve the internal combustion engine by transforming it. There are a lot of opportunities here, but proper funding is lacking.

Companies are struggling with their decisions when it comes to looking in a new direction, because of many relevant reasons like investing in plants and retraining employees, but also due to the fact that there's no clear end in sight. Nobody actually knows if they want to be or beat Tesla, except Ford. In the meantime, the Chinese auto industry is expanding everywhere.

There's more to come

This is not a dead-end. There are multiple advantages to using EVs or ICE trucks, but companies need to establish how they’ll properly utilize their fleets. Not because they care so much about efficiency. Profits need to be protected. After all, you can’t keep asking more for your products, just because you didn’t know how to properly organize your supply and distribution chains.

What Daimler’s CEO told us here is that governments and relevant authorities should support truck makers and other relevant parties of the industry in their journey towards changing how we view shipping and how it happens. It’s a subtle way of talking with stakeholders without addressing them directly.

In the end, you don’t have to worry too much, if you’re not a company looking for new trucks. Costs of BEVs like the Model 3 or Honda e will come down at some point. The industrial development will have advanced far enough in five or six years for us to enjoy better-priced EVs. Battery making and recycling or reusing will play a big part in this aspect.

Until that happens, you’ll have to decide what’s best for you: an EV, or a PHEV that combines the best of both worlds, until the best time to switch to the green side comes. It’s hard to argue in favor of ICE vehicles now, as we can see gas prices rising almost every day. Ultimately, the choice is yours – make sure it’s made in your best interest.


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