Dusseldorf. Mercedes-Benz wants to align its sustainability strategy more closely with the vehicle. “With our cars, we have the greatest leverage to advance decarbonization,” said Olaf Schick, who is responsible for integrity, governance and sustainability on the Mercedes board, in an interview with Handelsblatt.
In his first year in office, Schick sharpened and simplified the group's sustainability strategy. He wants to put a stronger focus on cars, enter into more partnerships, make more targeted investments and make the sustainability committees more efficient.
“We can and want to afford sustainability even in these times,” says Schick. But: “We have to find the right balance between sustainability and economic success.” Innovation and decarbonization were based on the company's financial strength. “The profits from combustion engines finance our investments in sustainability,” says Schick.
Mercedes is currently significantly expanding its range of electric cars. However, this puts additional pressure on the margin because the company still earns less with electric cars than with combustion engines due to the high battery costs. Margin parity should not be achieved until the end of the decade.
“In the future generation of our vehicles, we will place an even greater focus on avoiding and reducing emissions,” says Schick. According to the company, the current series are already more sustainable:
Aluminum is an important lever because its production causes high emissions of climate-damaging CO2. Mercedes has deepened its cooperation with the Hydro company. The Norwegians supply CO2-reduced aluminum that contains at least 75 percent aluminum scrap.
The battery is the individual component of an electric car with the largest CO2 footprint. Together with partners, Mercedes relies on electricity from renewable energies to produce the cells and cell material.
The efforts made with aluminum and batteries are exemplified by the electric C-Class: Mercedes says it can save around 30 percent of CO2 emissions with aluminum. The CO2 footprint of the battery cells is said to have been reduced by 40 percent.
“If we bring a more sustainable component into series production, it must meet Mercedes quality requirements,” says Schick. At the same time, it has to be financially viable. “We don’t want to put any money on it.” The group wants to reduce its material costs by eight percent by 2027 compared to 2024.
Mercedes publishes a raw materials report for its new vehicles. Customers can see which raw materials are installed where in the vehicle and where they come from. “We want to create a new level of traceability,” says Schick.
As electromobility ramps up, there are increasing risks in respect of human rights, says the manager. Take cobalt, for example: The important raw material for electric car batteries is mainly mined in the African Congo. According to Schick, Mercedes is working with non-governmental organizations to consider how working conditions on site can be improved and is financing protective clothing, for example.
In production, Mercedes is sticking to its goal of reducing its own CO2 emissions by 80 percent by 2030 compared to 2018. According to Schick, more than 50 percentage points of this have already been achieved. One lever is the use of green electricity. Mercedes and a partner are investing a three-digit million sum in a wind farm on the Mercedes test site in Papenburg. From mid-2027, this will cover around a fifth of Mercedes' German electricity needs in Germany.
Sales is about selling more electric cars. Mercedes has significantly increased sales of electric vehicles this year. However, pure electric cars accounted for less than twelve percent of new cars sold worldwide in the first half of the year. If you include hybrid vehicles in which a combustion engine and battery are installed, the share is 20 percent. Mercedes wants to double this to 40 percent by 2028/29.
Originally, CEO Ola Källenius had the goal of energizing the entire new car fleet by the end of the decade. He has long since abandoned this strategy. Instead, he also wants to sell combustion engines well into the 2030s.
“Decarbonization is our goal, we at Mercedes agree on that,” says Schick. “But we need tactical flexibility and have to remain open to technology so that we don’t force something on customers.” Mercedes needs to build convincing electric cars to convince buyers to switch to e-mobility.
From Mercedes' perspective, combustion engines have also become more sustainable. A 48-volt battery is installed in the new series, which supports the classic engine at low speeds and thus reduces emissions.
But that is not enough to meet the requirements of the European Union. As an interim goal, car manufacturers must reduce their CO2 emissions by 15 percent by 2021 in the three-year period between 2025 and 2027. If they fail to do so, billions in fines will be due at the end of 2027.
Mercedes vehicles newly registered in the EU between January 2025 and August 2026 emit 103 grams of CO₂ per kilometer. This is shown by figures from the think tank ICCT. However, the brand must reach a target of 90 grams.
Fines can be avoided by creating a so-called pool of better-performing competitors. A common limit then applies to the group. Mercedes forms a pool with Smart, Volvo and Polestar. Together they create the target value.
However, Mercedes must make compensation payments to its partners. Schick does not want to comment on the conditions. Rival BMW, on the other hand, is already achieving the CO2 target on its own, but unlike Mercedes, it does not sell vans that emit more CO2 emissions.
From the perspective of critics, Mercedes has also adjusted the criteria for the remuneration of its top managers since the beginning of the year because of excessive CO2 emissions. Carbon dioxide emissions used to play a crucial role in the annual bonus. Mercedes deleted these transformation goals with the approval of the general meeting.
Instead, the bonus payments are now calculated more based on the electric cars and hybrids sold. Schick defends the change: “The proportion of electrified vehicles in our new car fleet is easier for us as a car manufacturer to grasp and helps to drive the organization forward.”
As part of the adjusted sustainability strategy, Mercedes is also reviewing its committees. The group is reducing the advisory board for integrity and sustainability from eleven to five members. The committee includes leading climate scientists such as Johan Rockström, director of the Potsdam Institute for Climate Impact Research. The advisory board is seen as a source of inspiration for the board. The committee meets four times a year and discusses trends in science and how they can be transferred to vehicle development.
Schick has been on the Mercedes board for a year. For example, he prepares the strategic discussions on the topic of sustainability with his board colleagues from development and production. The lawyer began his career in various law firms before moving to Mercedes predecessor Daimler in 2004. In 2023 he went to the automotive supplier Continental and worked there as CFO.
