We will be seeing some rapid changes from all of the European manufacturers as January 1, 2020, marks a significant shift. On that date, the EU begins imposing fines–big fines, for companies that don’t pass its very aggressive emissions regulations. The fines can amount to billions of dollars. That is why so many are embracing electrification. It’s a way to offset its own ICE production. For Mercedes, that means killing off most of its AMG models.
Europe has embraced diesel power for decades, but that has all been stifled due to the dieselgate scandals of a few years ago. Manufacturers are not going back to diesel. That’s why electric vehicle technology is running at the pace it is at. But there is another problem facing carmakers.
SUVs have prompted Mercedes killing some AMG models
The popularity of the SUV is not just in the US. Europeans have embraced SUVs to the extent that popularity has risen from 20% in 2014 to 35% today. And with SUVs come worse mileage. So manufacturers are facing both the abandonment of diesel and pursuit of electrification and the proliferation of a vehicle segment that consumes fuel in copious amounts.
While manufacturers have taken the lead on electric vehicles, consumers are as interested in them as Americans. In the US only 2% of vehicles sold are electric, and in Europe, it’s 3%.
With big sedans, SUVs, and performance cars, you’re forced to kill off some
When the majority of your product line is made up of big sedans, SUVs, and performance cars, it’s going to be difficult reigning in the emissions numbers. That is what Mercedes is facing right now. And because of this, it will be seriously cutting back on AMG projects.
Mercedes head Ola Källenius as first reported by Financial Times said, “What we can’t control is buyer behavior, but we have the technologies within our portfolio to get within a target range.” Put another way, Mercedes will be eliminating or cutting back on all of its highest polluting models. Especially targeted will be AMG variants.
As much as 75% of AMG range will be killed
The AMG range is the high-performance variant of many models in the Mercedes lineup. Some sources are saying more than 75% of the AMG range will be killed off. And that’s only for starters. There’s a domino effect that this creates.
AMG is a huge profit center for Mercedes. Killing off AMG will seriously reduce profits. So too, will killing off the large S-Class sedans with big ICE engines which is another possibility.
When Mercedes executives speak about future plans, it’s all about electrification. Recently it was announced that Mercedes has stopped the development of internal combustion engines. While it seemed somewhat shocking at first, in the context of the Euro regulations looming it makes sense.
There are other manufacturers in the same boat
And Mercedes is not the only company scrambling to get in compliance. Ford is another that is making cuts and reworking vehicles it plans on keeping. So when it comes to European vehicles we may be on the verge of seeing radically different versions over the next couple years.
There used to be a saying that certain companies made what they wanted you to have, not what you really want. It may look more like the truth in the coming years.