Mercedes-Benz's all-new fully electric CLA concept car, first revealed at the 2023 Munich Auto Show, has now entered production and is set for its global debut in 2025. As the brand's first vehicle built on the pure electric MMA platform, the CLA showcases Mercedes-Benz's latest advancements in battery technology, cabin design, and intelligent driving systems. The car is equipped with the new MB.OS operating system and the MB.EA architecture, marking the company's entry into a new era of electrification.
The CLA will first be launched in Europe in March 2025, with simultaneous releases planned for China and the United States in the fall. This model will be Mercedes-Benz's sole fully electric intelligent vehicle for the 2025 model year, alongside three new gasoline-powered models, two of which will be high-end luxury vehicles.
Mercedes-Benz's strategy stands out by focusing on the parallel development of fuel, plug-in hybrid, and fully electric vehicles to achieve profitability across all three powertrains. While pure electric vehicle sales have declined, sales of plug-in hybrids have grown by 13.7% year-on-year. In addition, Mercedes-Benz plans to apply its electric architecture and operating system to its gasoline and plug-in hybrid models to improve development efficiency.
At the 2024 Mercedes-Benz annual financial briefing in Sindelfingen, CFO Wilhelm detailed the company's "Next Level Performance" cost-reduction plan for the next three years (2025-2027), aiming to save €5 billion, with a particular focus on reducing costs by 20% at Beijing Benz. Mercedes-Benz intends to reduce total production capacity from 2.5 million units to 2-2.2 million units, with reductions achieved through production cuts and flexible labor arrangements.
To further reduce costs, Mercedes-Benz plans to move some production to Hungary, with expectations that Hungary's share of total production will rise from 15% in 2023 to 30% by 2027. In addition, the company aims to optimize production by reducing headcount, increasing internal efficiency, and implementing artificial intelligence and digital twin technologies. By 2027, Mercedes-Benz also plans to increase the proportion of localized production from 60% to 70%, particularly in China and the United States.
In terms of material costs, Mercedes-Benz has set a target of reducing costs by 8% by 2027. The company also plans to cut battery costs by 30%, driven by economies of scale and optimized design. Regarding investment in research and development, the budget for 2025 is set at €1 billion, with a gradual decrease expected starting in 2026. By 2027, spending on research and development is expected to be 10% lower than in 2024.
These cost-saving initiatives highlight Mercedes-Benz's competitive strength in the global automotive market and suggest a potential comeback for traditional automakers amid evolving market conditions.