Mercedes-Benz's net profit soared by 485% in 2021. Electric becomes the only strategic direction.

"All in" electrified, Mercedes-Benz is duty-bound.

"We have only one direction of development, and that is electrification." In a conference call after the release of the company's 2021 results, Mercedes-Benz group chairman Kang Linsong (Ola Kllenius) said sales of Mercedes-Benz electric cars would increase by 40 per cent in 2022.

On February 24th, Mercedes-Benz reported that in fiscal year 2021, the group's turnover was 168 billion euros, up 8.88% from the same period last year, and net profit was 23.4 billion euros, up 485% from the same period last year. Excluding the already independent Daimler truck and bus business, Mercedes-Benz made a full-year net profit of 14.2 billion euros; earnings per share rose 280% to 12.89 euros.

Sales are down 5%, but it's more profitable.

"A year in which Mercedes-Benz made strategic progress in 2021." In Kang Linsong's view, the improvement of product structure is one of the main factors for Mercedes-Benz's revenue and profit growth, which is also driven by stable net pricing, continued improvement in cost efficiency and good performance of the used car business.

According to the financial report, in 2021, the total turnover of the Mercedes-Benz passenger car and light commercial vehicle business segment was 109.648 billion euros, an increase of 11% over the same period last year; adjusted profit before interest and tax was 13.914 billion euros, an increase of 105% over the same period last year; adjusted sales profit margin reached 12.7%.

However, it can be seen from the main figures in the financial report that total sales of Mercedes-Benz passenger cars and light commercial vehicles last year were 2.3302 million, down 5 per cent from a year earlier. Of this total, passenger car sales fell 5 per cent to 2.055 million, down 5 per cent from a year earlier; even in China, its brand's largest single market, total sales fell 2 per cent year-on-year to 758863.

Although sales have declined, Mercedes-Benz has made a lot of money from a profit point of view. High-end cars, including Mercedes-Maybach, Mercedes-AMG, G-Class, S-Class, GLS SUV and EQS, grew by 30% in 2021, while deliveries of electric models for passenger cars and light commercial vehicles increased by 64% year-on-year in 2021, according to the data. Since 2019, fixed costs in the Mercedes-Benz passenger car business have fallen by 16%, while bicycle turnover has increased by 26%, to an average of 49800 euros per vehicle.

"at present, we are still unable to predict when the semiconductor supply bottleneck will be eliminated." Kang Linsong believes that the supply shortage related to semiconductors will continue to affect the development of the market in 2022, but the relevant supply situation will tend to be stable. "the company is keeping in touch with suppliers to solve the chip supply problem. It is hoped that the chip shortage will be alleviated in the second half of the year."

At the annual results meeting, Mercedes-Benz also proposed a number of supplier changes, including from relying entirely on first-tier suppliers in the past to more in-depth cooperation with different semiconductor suppliers; adjust the design of parts and components, and so on.

Continuous power electrification

In addition to continuing to focus on cost efficiency and supply chain management, Mercedes-Benz's strategic focus is to continue to increase investment in pure electric models. Kang Linsong notes that Mercedes-Benz aims to double its sales of electric vehicles by 2022 and expand its influence in relevant global markets. "this year, we will launch a series of new pure electric models, including the new EQE and the new EQS pure electric SUV."

In July 2021, Mercedes-Benz announced that its corporate strategy would shift from "electric first" to "all-electric". The goal is to provide pure electric models for all market segments by 2022. Pure electric and plug-in hybrid models account for 50% of sales in 2025, and each model will launch a pure electric version. It is planned to achieve full electrification and sell only pure electric models by 2030. In addition, Maybach, G-class, AMG three high-end brands will also gradually achieve pure electrification. According to the news announced at the press conference at that time, Maybach will launch the Mercedes-Maybach EQS SUV model, and the all-electric G-Class car is expected to be unveiled in 2024.

As a bright spot in sales, the delivery volume of Mercedes-Benz plug-in hybrids and electric passenger vehicles reached a record 227458 in 2021, of which the delivery volume of the "EQ series" pure electric passenger vehicles formed by EQA, EQB, EQS and EQE was 48936, an increase of 154.8% over the same period last year.

"in 2022, we will launch 21 new products, including 8 pure electric and plug-in hybrid models." According to Yang Mingzeng, President and CEO of Beijing Mercedes-Benz sales and Service Company, the new EQE, Mercedes-EQ's first pure electric car based on EVA platform, will be launched soon; plug-in hybrid products from C-Class and S-Class cars will also be available; and Mercedes-Maybach S 680 4MATIC high-definition launch will be launched this year.

In addition to further strengthening its electric strategy, Mercedes-Benz, the first to take European L3 self-driving photos, also plans to bring the technology to the Chinese market. According to Kang Linsong, the company is communicating with Chinese regulators about the introduction of L3 self-driving technology into the Chinese market.