Daimler Truck will split from Daimler On Dec. 10, the commercial vehicle maker said Thursday, outlining cost-cutting measures it hopes will push profit margins to double-digit percent by 2025.
The truckmaker, which aims to sell 60% electric models by 2030, has certain margins that will remain the same or grow as it transitions to electric vehicles, CFO Jochen Goetz said in a presentation.
Drive a electric vehicle would cost customers the same or less than a long-term diesel alternative due to lower fuel costs, the CEO reasoned Martin Daum, even though electric models are still priced much higher up front.
The first battery-powered electric truck Daimler Truck, the eActros, costs about three times its diesel equivalent.
“The pennies per mile is the key question,” Daum said. “The biggest intangible is the price and cost of energy and CO2.”
The maker of Commercial Vehicles, the world’s largest but currently reporting lower margins than its rivals, aims for profit margins of 9% in Europe, 10% in Asia and 12% in North America by 2025, according to a statement issued before the presentation. .
Cutting costs, raising prices and focusing on heavy duty vehicles will bring you closer to that goal, board members said Thursday.
A planned business-wide fixed cost reduction of 15% from 2019 levels by 2025 is progressing faster than planned and will likely be achieved by 2023, the heavy-duty vehicle maker said.
Improving market share in Europe has long been a priority for the commercial vehicle manufacturer. Its adjusted return on sales so far this year is 10.8% in North America, 7.2% in Asia and 4.5% in Europe, according to the presentation.
“We have a clear objective … we are determined to achieve higher profitability and win the race towards zero emissions,” Daum said.