Daimler's Cost Cutting Measures Are Ramping Up


Daimler's Cost Cutting Measures Are Ramping Up

It's a natural course of progression for a company. Following periods of great prosperity, there will come a time when a company has to start tightening their belts. With ongoing and upcoming electric vehicle projects, Daimler is one such company that is beginning to put a lid on spending and expenses before things really get out of control. According to Automotive News China, Daimler is looking to cut development costs on their light vehicles in order to improve margins. Taking a page out of Toyota's books? Perhaps.

Fortunately for Daimler, costs of production tends to go down once that initial investment hurdle is cleared. The majority of spending at this point in time and for the next few years will be in setting up plants and production facilities, as well as developing platforms. Once all of these assets are in place, platforms can be reused for a variety of models if there is scalability, as well as across generations - and this generally means severely reduced production costs.

Beyond this, there are also numerous collaborations for Daimler to fall back upon. They are currently working with Renault, Nissan, and BMW in order to develop models across their entire product range from light vehicles to commercial vehicles. This in turn means that component costs can be shared or grouped for better economies of scale, and technologies can be shared as well in order to reduce research and development costs.

Perhaps the largest cloud hovering over electric vehicles has been battery production - specifically in terms of raw materials. Not only does this component have an environmental and socio-political cost, it also has an economical cost as well. By varying the amount of nickel, cobalt, and manganese, Daimler will be able to develop batteries with better efficiency and charge capacity, as well as lower the amount of raw materials that have to be imported.

All of this work is in the pursuit of achieving a carbon neutral fleet by 2039. It's a lofty goal on Daimler's part as they will have to convince the lion's share of consumers to make a shift to electric vehicles without alienating the champions of their brands, but that's a bridge they'll cross when they get to it. In the meantime, their Mercedes-Benz EQC looks like a solid product that will be making waves as it launches in various markets around the globe.