Ola Kallenius, the first non-German CEO of Daimler and its Mercedes-Benz brand, has been tested by a range of unforeseen challenges, from the coronavirus pandemic to the global semiconductor shortage, during his first two years in charge. The native of Sweden has also presided over the launch of Mercedes’ first electric vehicle in the luxury class, the EQS, and is pushing the automaker farther into the digital realm with plans to digitalize the entire sales and distribution network, all while aiming to lower the company’s break-even point, trim fixed costs and broaden Daimler’s lineup and customer base. He discussed these topics and more in an interview with Automotive News Europe Associate Publisher & Editor Luca Ciferri and Correspondent Nathan Eddy.
Since taking over from Dieter Zetsche in early 2019 you have undertaken a radical overhaul of Daimler. Where do you stand now in this process?
The transformation of the auto industry is obviously picking up speed. Every type of technological trend is driving this transformation. That includes the move toward zero-emissions vehicles and the car turning into a supercomputer with a very sophisticated software architecture that is fully connected with everything. In both these dimensions, we are significantly increasing our base of development. On the electrification side, this is an important year for us. We are launching four electric cars. With the EQS, we are launching a vehicle on the first fully dedicated large EV platform in the U.S. The transformation is going to continue and increase in intensity over the next few years. In this decade, the auto industry will be turned on its head, and we will significantly change both our technological industrial footprint and in some areas also our business model. What we have also been working on, during the last 18 to 24 months, is to improve the company’s financial performance. That includes lowering our break-even point and trimming our fixed costs to be able to fund this significant technological shift. We are functioning almost like our own venture capitalist, making sure that we produce healthy cash flows to find a way to help to cover the costs of the transformation. But when it comes to where we are in this process, I will use a term from American football: we are only in the first quarter of this transformation.