Daimler CEO Sees Solid Returns on Flagship E-Car, FAS Says

(Bloomberg) --

Daimler AG’s new flagship electric sedan will generate “reasonable” returns right from the start as the vehicle features top-line technology, Chief Executive Officer Ola Kallenius said.

The Mercedes EQS, which debuts this week, will produce attractive profits while still lagging the returns of its combustion engine-powered sibling, the S-Class, due to the higher cost of electric-car components, Kallenius said in an interview with Frankfurter Allgemeine Sonntagszeitung.

“The logic remains the same: the top segment promises the best profit margin,” he said.

The EQS will be the first Mercedes built on dedicated electric-car underpinnings, marking a milestone for the German brand that’s been criticized for taking too long to embrace EVs. It will feature a driving range of 770 kilometers (478 miles), putting the vehicle ahead in the electric-car race, according to Kallenius.

Carmakers are stepping up their game to catch up with battery-vehicle leader Tesla Inc. and a host of other newcomers whose valuations have vaulted past those of many incumbent manufacturers. Volkswagen AG last month announced plans to become the new global EV sales leader no later than 2025, while General Motors Co. has said it’ll quit making combustion-engine cars by 2035.

Daimler may hit a target to make its fleet carbon neutral by 2039 faster than expected, said Kallenius, who pronounced the goal two years ago.

“This will likely happen faster given the dynamic pace we’re seeing today,” he said.

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