The Tesla Semi’s biggest rival in the Class 8 trucking market, Daimler, is facing a reckoning amidst its ongoing EV shift and other headwinds in its main business. The European automaker released a report on February 2011, explaining its plans to recover from its dismal 2019 results. The transition to sustainable vehicles was a clear topic of choice for Daimler as well.
In its Investor Relations Release notes, Daimler reported a net profit of €2.7 billion in 2019 (2018: €7.6 billion). It also reported a free cash flow of €1.4 billion (2018: €2.9 billion) and proposed a dividend of €0.90 (2018: €3.25) per share for 2019.
Overall, Daimler reported a revenue of €172.7 billion in 2019, which was a 3% increase when compared to 2018’s revenue of €167.4 billion. Despite its 3% increase in revenue, however, Daimler was still in the red by the end of 2019, which may be attributed to the company’s investments towards its EV shift.
“While our results in 2019 reflect ongoing strong customer demand for our attractive products, we cannot be satisfied with our bottom line. Above all, material adjustments affected our financial results last year. The future of the Daimler Group lies in CO2-neutral mobility as well as in consistent digitization, leveraging its full potential in our products and our processes. To achieve that, we have substantially ramped up our investments into new technologies,” Daimler’s Chairman, Ola Källenius, said.
For 2020, Daimler’s Mercedes-Benz marque plans to quadruple its share of plug-in hybrids and all-electric vehicles in total sales by expanding its EV portfolio. “Demand for individual mobility and the worldwide transport of goods and people will continue to grow and will continue to form the basis for the core business as a vehicle manufacturer,” wrote Daimler in its report.
The European automaker plans to ramp-up production of the EQC to meet demand, market launch the EQV in the summer, and unveil the EQA later this year. It has also decided that its line of Smart vehicles will only consist of EVs only. As for plug-in hybrids, Daimler plans to have more than 20 variants by 2020 and rollout 48V technology.
Other steps in Daimler’s agenda for 2020 included ramping battery production. The legacy automaker reported that ramp-up of battery production was on track in nine of its factories in seven locations on three different continents.
Daimler’s 2020 agenda highlights digitalization, an area where new companies like Tesla are very proficient in. The Europe-based company is set to roll out the latest MBUX system to its entire fleet. Daimler hinted that it might dabble in connectivity in its S-Class series as well. There were even hints that the company is developing software for its vehicles, specifically one for its trucking business.
Daimler’s plans seem to have a central theme: electrification. However, it isn’t stopping there. The legacy automaker appears to be following Tesla’s lead by aiming to deliver a car that's fitted with technologically advanced features as well.
“Daimler is consistently committed to CO₂-neutral mobility. To achieve the CO₂ targets and to finance the important future fields of electric mobility and connectivity, enormous technical and financial efforts are required,” the German automaker wrote.
To achieve its goal, Daimler doesn’t seem to hold any delusions about the sacrifices it will need to make. The company included in its report that it will be reducing material, administrative, and personnel costs soon. This would result in job losses across the company, including some in management.
“The resulting costs require comprehensive measures to increase efficiency, streamline the company, and increase the free cash flow. Those measures include the significant reduction of material and administrative costs and the reduction of personnel costs by more than €1.4 billion by the end of 2022. The aim is to cut jobs worldwide in a socially responsible manner, including the reduction of management positions,” Daimler remarked.
But amidst the changing times in the transportation sector and the disruption from companies like Tesla, Daimler's painful transition towards sustainability may continue on for quite some time.
Featured Image Credit: Daimler