Daimler CEO Ola Kaellenius.

Learning from one challenge for the other

COVID-19 and CO₂.

Overview Ola Källenius Jörg Burzer Renata Jungo Brüngger Sabine Kohleisen Markus Schäfer Britta Seeger Hubertus Troska Harald Wilhelm Remuneration

April 20, 2020 – This article is appearing while people all over the world are fighting COVID-19. It’s too early to take stock, but we can already learn some lessons from dealing with the pandemic, for another global challenge that will be with us for much longer: climate change.

Individual mobility is and will continue to be a valuable asset

For some weeks now, we have been experiencing how our social, cultural and economic life is being restricted. These measures are temporarily essential – and permanently revealing. One insight from the time when the world is at a standstill is that individual mobility is and will continue to be a valuable asset. A vehicle is more than a protected space; it gives us the independence to move from A to B in a self-determined way at any time. And what is even more important right now is the certainty that helpers will get to people in need and goods will get to the supermarkets.

At Mercedes-Benz, individual mobility is the purpose of our work and the legacy of our founding fathers. Our mission for the future is to preserve this asset – and we will change in order to achieve this. A lane change is necessary. We know that and we are working on it with all our efforts.

This lane change is mainly connected with two issues: decarbonization and digitization. Success with digitization will determine the future of many companies; success with decarbonization will determine the future of our planet.

At Mercedes-Benz, we aim to offer a CO₂-neutral fleet of new cars worldwide by 2039. We also aim to ensure that all new Daimler commercial vehicles in our most important markets are CO₂-neutral in use by then. We already have all-electric trucks, vans and buses on the roads today. By the end of this year, our car portfolio will include five all-electric models and more than 20 plug-in hybrids. And we are also continuing to pursue fuel-cell technology. The electrification of our vehicle portfolio is one of the key issues we are continuing to drive forward while a large proportion of our plants and offices are temporarily closed due to the coronavirus. At the same time, decarbonization goes far beyond our products. It also affects supply chains and production. “Factory 56,” which we will open this year in Sindelfingen, will be supplied with CO₂-neutral energy right from the start. In the future, it will serve as a blueprint for all plants where Mercedes-Benz vehicles are built.

It takes determination and a sense of proportion

All of this means that our company is changing fundamentally, which requires determination and a sense of proportion. That is my second lesson from the corona pandemic. A high-ranking government official recently put it in a nutshell: “COVID-19 is developing along an exponential curve, so we should not think in straight lines.” The same goes for the climate. We must avoid passing the “point of no return,” even if many people are still not feeling the most severe symptoms of climate change today. At the same time, the current crisis shows that we not only need effective measures, we also need the people to implement them. Both are crucial. This is why multilateral agreements such as the Paris Climate Agreement are important. Our mission here is CO₂-neutral mobility through innovation. And we are determined to take that path. This message is important to me: We stand by the CO₂ targets that have been decided upon. The fight against the pandemic must not be an excuse in the fight against climate change.

Yes, financial resources are currently scarcer than ever. And yes, decarbonization will at first cost a lot of money. But we are firmly convinced that it will pay off in the long term. In this sense, the move into green financing is also part of our lane change. In the future, we will use financing instruments such as green bonds. They offer us new opportunities to finance the high future investments required for CO₂-neutral technologies. And they also offer environmentally oriented investors the opportunity to participate directly in our sustainability projects: a win-win situation. In this way, we are also supporting the EU’s Green Deal. In return, politicians can support this lane change by expanding the charging infrastructure as quickly as possible. The CO₂ pricing already agreed upon and the environment bonus for electric vehicles and plug-in hybrids will also have a positive influence.

We have reason to be confident

Finally, there is a third conclusion that can be drawn from the way the COVID-19 pandemic is being dealt with all over the world. Despite all the challenges, we have reason to be confident, because we have seen what we can achieve if we act together. The emergency measures that have been put in place within a very short time are impressive. From aid packages in the billions, to production lines converted for the manufacture of breathing aids or disinfectants, to countless solidarity actions from the middle of society. The state, companies and civil society are pulling together in these weeks and doing great things. This is also the only way we can win the fight against climate change. It requires alliances beyond the supposed interest groups. I hope that the corona experience will help to achieve them. I will then be optimistic that we can also positively influence the development of the global temperature curve.

This text was published as guest contribution by Ola Källenius in the German newspaper Frankfurter Allgemeine Sonntagszeitung on April 19.