Incoming Daimler CEO Ola Kallenius Talks Mercedes EVs and Future of Diesel

There’s a new sheriff in town. Ola Källenius, 49, takes over as CEO of Daimler AG on May 22, replacing longtime boss Dieter Zetsche, who faced mandatory retirement but will return as chairman of the supervisory board in 2021. Zetsche, CEO for 13 years, helped groom the Swede who becomes Daimler’s first non-German CEO. We recently caught up with Källenius as he prepared to take over an automaker working to reinvent itself in an age of electrification, ride-sharing, autonomy, and connectivity.

Can we expect a smooth transition and continuation of current strategies?

Of course. I’ve been working hand in hand with Dieter Zetsche for many years now, getting prepared for the new assignment.

Why partner with BMW to develop autonomous driving technology and mobility services?

In terms of mobility services, to be able to create even bigger critical mass and grow faster, we saw a strong complementary and partially overlapping portfolio within BMW. With regard to autonomous driving, you have two strong technology leaders in discussions. We see an opportunity to pool our technological resources. We can do more, we can get there quicker, and we can share investments for the second generation of driving assistance systems. We will have higher volumes, getting better variable cost. There was a clear case for a win-win.

What can we expect?

There are two market segments we are talking about. One is private use. We have a first-generation, Level 3, highway-style pilot in development for the next-generation S-Class. Part of the driving experience will be fully autonomous. The premium luxury segment is ideal for this partnership with BMW. Then you have the robo-taxi, Level 4 and 5 [autonomy]. We are developing this with Bosch, and we’re in discussions with BMW should we want to expand the partnership. It is possible.

How is the Mercedes-AMG One hypercar coming?

We’re in the middle of development right now.

When will the first car be delivered, and how many will you make?

Next year. Not early in the year. There will be 275.

 

What will your EQ electric vehicle family look like?

We’re going to make a complete family out of the EQ. The first one is the EQC, and EQ will have SUVs that are both bigger and smaller than that, and it will also have different sizes of sedans.

How important to the success of Smart is rebranding it as an electric brand?

Electric car demand far outstrips supply at the moment, so we are going to ramp up our supply. It’s really the ideal electric car. It’s actually the most cost-efficient electric car. For many people in an urban environment, it is exactly what you need. We made the conscious decision to say, “Let’s go all electric.” Quite a brave decision, actually. And now we’re scaling up.

Will you still have diesel engines in 10 years?

Yes. Our new era of diesels, starting with the four-cylinder engine we launched in 2016 in the E-Class, had a dramatic improvement in NOx emissions, well below regulations under real driving conditions—that problem has been technically solved. The diesel engine still has a 15- to 20-percent CO2 advantage over a petrol engine. For Europe, diesel still has a role to play for the next decade at least—and for commercial vehicles, much longer.

2018 was not a good year for Mercedes for revenue.

What you see is the first few chapters of the transformation. It means we have to work hard on the cost side, on the efficiencies, be selective in our investments going forward. But at the same time, be bold. We’re investing at an all-time high level. If you are going through a transition, you have to make sure you are as strong in 10 years as you are now and not be shortsighted and underinvest.

Mercedes was not at the Detroit auto show. What is your policy toward auto shows?

We decided to do a little bit of an experiment because CES and Detroit are next to each other. We have always gone to both, so you have to double up everything that you do: Launch technologies at CES, and then go to Detroit to launch products. We said, “Why don’t we move the car debut to CES and kill two birds with one stone?” Something that we have never done. So instead of bringing the CLA to Detroit, we decided to launch it at CES. I think it worked, and we spent less money.

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