Daimler Strains for Balance in Tech Investments

Daimler AG is struggling to balance investments in technology, factories and equipment with the cost of launching its new EQ electric-vehicle sub-brand, CEO Dieter Zetsche tells reporters.

He says the company is “fighting” to trim this year’s €14 billion in capital and r&d spending to €12 billion-€13 billion in 2017, Bloomberg News reports.

The challenge is that regulatory pressures make it impossible for Daimler—along with its rivals—to back off from continuing to refine conventional powertrains as it ramps up spending on the cleaner alternatives it will need to meet future emission limits.

Zetsche says the resulting range of highly critical investments represents “an extreme challenge.” Even if demand for EVs surges to 25% of future sales, as Daimler predicts, that means 75% of the company’s vehicles will continue to be powered by internal combustion engines.

Bloomberg notes that competitive pressure to bring self-driving technology to market adds another powerful drain on company resources.