Daimler AG’s (OTCMKTS:DDAIF) flagship brand Mercedes plans to invest over Euro 40 billion ($47 billion) between 2022 and 2030 to transition to battery electric vehicles. Moreover, all the company’s newly launched vehicle platforms will be electric-only from 2025.
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Growing urgency to fight climate change is causing governments to double down on regulation favoring electric vehicles. The European Union, for example, has proposed a ban on the sale of new gasoline and diesel cars from 2035. Other auto companies such as Volvo Cars and General Motors have committed to going all-electric by 2030 and 2035, respectively.
It remains to be seen how lucrative Mercedes’s shift to EVs will be. The barriers to entry into the electric vehicle market aren’t too high, with a slew of new entrants and incumbents looking to gain share. That said, investors seem to like the company’s plans, as the stock edged slightly higher in Thursday’s trading.
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