Elon Musk Praises Daimler As Mercedes Benz Maker Focuses On EV: 'Respect'

Can we now call Daimler AG, one of the world's biggest makers of premium passenger cars and the world's largest producer of trucks above 6 tons, the Tesla of Germany?

Probably, but Daimler won't see it this way.

The company that makes Mercedes-Benz luxury sedans and Daimler trucks on Thursday announced a halt to its internal combustion engine development programs as part of efforts to shift to the production of electric vehicles (EVs). It also said resources allocated for the development of internal combustion engines and transmission development will be reallocated.

The announcement was made by Markus Schaefer, Member of the Board of Management of Daimler AG. In this function, Schaefer is also responsible for Group Research and Mercedes-Benz Cars Development, as well as worldwide Mercedes-Benz Cars Procurement.

Upon learning the news, Tesla Inc. CEO Elon Musk on Thursday tweeted, "Electric is the future! Congratulations Daimler!!"

Mercedes Benz replied, giving a toast to more eco-friendly future for automobiles.

Musk acknowledge by tipping his hats off to the German company, “Very meaningful action by the company that invented the internal combustion engine. People will remember this day. Respect.”

Daimler’s primary focus will now be on electrification, particularly in the development of electric drives and batteries, according to German motoring magazine Auto Motor und Sport.

Schaefer said the overall budget for research and development for EV technologies remains at a “high level.”

Analysts said the announcement might also mean Daimler is confirming the eventual rollout of an all-electric truck under the Daimler marque. In December 2018, Daimler’s Freightliner unit delivered its first all-electric Freightliner truck to Penske Truck Leasing Corporation in Pennsylvania.

Daimler said it aims to be “frontrunners with electric trucks” in an effort to beat the Tesla Semi, which is planned for production by 2020.

Schaefer said the market stands assured Daimler will focus on EVs instead of diesel and gasoline engines to head off speculation the company might later change its mind and scale down its commitment to EVs. But a recent event casts doubt on Daimler's commitment to EVs.

Mercedes-Benz CEO Ola Källenius recently noted the rising sales of diesel cars in Europe, saying, "diesels enjoy an economy benefit of 15-20% and in a lot of circumstances also lower NOx emissions than they are certified at. There is no rational reason today not to buy one if your driving profile suits its best use."

But if Daimler does go all out with EV development and production, this means Daimler’s current E-Class, S-Class, and SUVs will likely be the last gasoline and diesel engines the automaker will produce.