Making Mercedes-Benz leaner, faster and stronger.

A Mercedes-Benz is a Mercedes-Benz – no matter how it’s powered. This means: Every Mercedes is extraordinary. Its status derives from exceptional design, advanced technology, superb refinement and craftsmanship, a sublime ride and drivetrain, world class safety systems and outstanding digital solutions – be it a battery-electric vehicle (BEV), a hybrid, or a car with an electrified high-tech combustion engine (ICE). Mercedes-Benz will apply a coherent, status-oriented design across the entire portfolio and customers will primarily decide on a model – and then choose their preferred drive type. The all new CLA, which will be offered as both a BEV and an ICE variant, takes a big step in this direction. And there is more to come.

The concept offers drivetrain flexibility in the form of a pure electric car with benchmark range, consumption and charging performance; in addition to a highly efficient ICE variant using small transverse high-tech electrified engines.

Even though the designs will be almost identical, in the Core and Top-End Vehicles (TEV) segments, the rear-wheel-drive cars will be based on separate, uncompromised BEV/ICE concepts. Cutting-edge BEV and ICE models can exploit their respective strengths, without sacrificing space, elegance, convenience, or efficiency. Thanks to intelligent modularisation, Mercedes can offer best-in-class roominess and perfect proportions while keeping a tight grip on costs and manufacturing flexibility.

By focusing on the most promising segments, Mercedes-Benz retains the ambition to defend margins as the BEV share increases. Mercedes-Benz plans to expand and protect the share of Top-End Vehicles (TEV) and aims to leverage the potential of its luxury brands such as G-Class, as the undisputed icon of adventurous luxury; Maybach as the epitome of sophisticated luxury and Mercedes-AMG as the performance luxury brand. The legendary G-Class family will be expanded with a new smaller version. Mercedes-AMG plans to outgrow the performance market, thanks to a heavily refreshed model lineup from 2026 onwards and a strategic evolution of its portfolio, which will include a next-generation, high-tech electrified V8 and dedicated high-performance electric models based on AMG.EA.

Beginning with the all-new CLA this year, Mercedes-Benz will start the most intense product launch programme in its history, including the major upgrade of the S-Class in 2026 as well as a string of launches at Mercedes-AMG. Overall, Mercedes-Benz plans for dozens of new or refreshed models to reach markets until 2027.

The CLA will be offered with an electric drivetrain or a 48-volt electrified high-tech four-cylinder engine, paired to an electrified eight-speed dual-clutch transmission. The electric variant sets new standards in its class in terms of range, consumption and charging power, thanks to know-how transferred from the VISION EQXX technology programme. The product substance in this class will be elevated, while at the same time, the portfolio complexity of its family will be reduced from seven to four variants.

By launching all-new electric GLC and C-Class models, Mercedes-Benz will close a gap in its electric core segment. An all-new fully electric E-Class will round out the picture.

The pace of BEV adoption will continue to be determined by market conditions, infrastructure and customer needs. Boosted by new BEV model introductions, the Mercedes-Benz Group AG is targeting an xEV share of more than 30% in 2027.

Production: Mercedes-Benz Group is adapting its cost base with a raft of measures. The company plans to cut production costs by 10% until 2027 after using the past years to adjust its nominal production capacity. This, among other factors, resulted in an exit from plants in Hambach (France), Iracemapolis (Brazil) as well as CKD plants in Russia and Indonesia. A powertrain plant in Poland is being transformed into a future production site for Vans and the sale of a Van plant in Argentina is another step towards adapting the company’s global production footprint. Global production capacity for passenger cars is planned to be reduced from 2.5 million in 2024 to between 2 - 2.2 million units by 2027, while retaining the flexibility to readjust, as the product launch campaign gains traction. There are no plans to shut down plants in Germany. Production capacity at each German plant is being balanced at an average 300,000 units. A core segment model will be added to the production lineup in Kecskemet (Hungary), where capacity is being added to take advantage of factor costs which are roughly 70% lower than in Germany.

Mercedes-Benz will make greater use of digitalization and AI, adopting a ‘digital first’ approach. Thanks to digital twins, Mercedes-Benz can plan potential moves of models between plants, including ramp up times and retooling, without having to significantly interrupt real-world production.

Local for local: By 2027 the share of local-for-local production is planned to be increased from 60% to 70%. An additional Core segment model could be allocated to the United States and a long-wheelbase version of the GLE will be localised in China by mid-2026.

Material Costs: Suppliers are engaged in a dialogue with Mercedes-Benz procurement and engineering teams to reduce material costs by challenging specifications and the design of components to identify where cost can be reduced through standardization and technical refinement. One result is earlier and deeper integration of key suppliers in the development process. Material costs will be tackled in close collaboration with suppliers. The BEAT26 program aims to jointly achieve long-term and sustainable changes to cost structures in procurement for both Mercedes-Benz and its partners.

Fixed Costs: Mercedes-Benz achieved a 19% reduction in fixed costs between 2019 and 2024, net of inflation. An additional reduction of more than 10% is being targeted over the next three years. To achieve this, the company is, among other things, in constructive discussions with its works council. Moreover, opportunities are being evaluated to determine how Mercedes-Benz sales and financial services organizations can work more closely together, to cater to customers across the different touchpoints more efficiently. In addition to selling its own retail business in Germany to experienced dealer groups, the company plans to further reduce management positions and increase the use of digitalization and generative AI to streamline processes.

Conference language: English with simultaneous translation into German and Chinese.