September 11, 2017 / 9:30 AM / 9 days ago

Daimler says early electric cars only half as profitable

FRANKFURT, Sept 11 (Reuters) - Daimler has set itself a new target of saving 4 billion euros ($4.8 billion) by 2024-2025 as electric cars may only deliver half the margin contribution compared to equivalent vehicles with combustion engines, it said on Monday.

“In the beginning of the cycle we believe that we will have to face a significantly lower margin, for some vehicles half of the margin of the vehicles they replace,” Frank Lindenberg, Vice President of Finance and Controlling at Mercedes-Benz Cars, said at Daimler’s investor day.

As part of the programme, Daimler wants to save 1 billion euros from fixed costs, another billion from research and development and capital expenditure. The remaining savings will come mainly from product costs.

Daimler said that by 2025, the purchasing cost of electric cars will likely reach parity with their combustion-engined equivalents.

Electric cars are currently more expensive than combustion-engined cars because of the costs of a vehicle battery.

$1 = 0.8320 euros Reporting by Edward Taylor; Editing by Maria Sheahan

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