Mercedes will focus on high-end models in luxury-car profit race

“We will reduce complexity in many areas… that dramatically changes logistics,” with factories set up differently in different regions depending on the most preferred types of vehicles in each market, said Markus Schäfer, head of development at Mercedes parent Daimler.

Customers will be offered pre-set packages when configuring their cars based on regional preferences, simplifying production in comparison to build-to-order models.

Mercedes announced a move to put 75 percent of investment into top-end vehicles and its highest-selling segment of C-Class and E-Class models.

“The willingness to pay is there,” Schäfer said. “Many, many customers are ready to pay the extra price for luxury.”

Bringing down the cost of EV batteries remains a top priority, Schäfer added.

“I would like to halve the size and weight of batteries in cars,” Schäfer said, citing energy efficiency and cost.

Taking more control of the supply chain through direct supply contracts and being more strategic about material choice would also help lower costs, he said, predicting that cobalt, a common battery material, was likely to be phased out of production.

Rising prices for cobalt, sourced mostly from Democratic Republic of Congo, are pushing battery makers to explore cobalt-free technology.

Mercedes earlier this week said it was the first automotive customer of battery startup Sila Nanotechnologies‘ silicon anode chemistry.