ICE costs higher than expected: Mercedes-Benz

MERCEDES-BENZ is reported to be spending more on combustion engine technology than previously planned, including €14 billion ($A22.6b) on passenger cars this year alone.

Speaking with German publication Wirtschaftswoche this week, Mercedes-Benz chief executive officer Ola Kallenius said the manufacturer was continuing to invest in production facilities, research and development, and the reworking of its hybrid drivelines so that the technology is viable “well into the next decade”.

Further, Mr Kallenius said Mercedes-Benz had spent “much more” than it usually would on a facelift of the combustion engine of its flagship S-Class, due for international launch in mid-2026.

“Our engines will always be at the very highest technological level. Otherwise, we would suddenly stall our combustion engine business in 2027/28,” he said.

Mr Kallenius’ comments come after the executive told investors in February that the company would continue reworking combustion engine models amid slower demand for electric vehicles.

Like many other OEMs, Mercedes-Benz has long said it was preparing for 100 per cent electric vehicle sales by the end of this decade “where market conditions allowed”, but Mr Kallenius said earlier this year that the company now expects just 50 per cent of sales will be electrified – including hybrids – by 2030.