FRANKFURT — Daimler will likely be a smaller firm 5 years from now, centered on capturing recurring revenues with software-based companies as Mercedes-Benz seeks to redefine luxurious in an period of electrical and self-driving automobiles, CEO Ola Kaellenius mentioned.

The Stuttgart-based firm based by Carl Benz, who patented the primary gasoline-powered automotive in 1886, is accelerating plans to shift the automaker past combustion-engine automobiles, a step which can end in job losses.

“The subsequent 5 years we are going to turn into a smaller firm,” Kaellenius informed a Reuters Occasions broadcast on Thursday. “We could have a elementary change within the industrial footprint on the powertrain facet,” he mentioned.

Jobs will disappear as a result of it takes much less time to construct an electrical automotive than a traditional gasoline or diesel model.

That is as a result of an electrical automotive’s battery and motor have solely 200 parts, in contrast with no less than 1,400 components present in a combustion engine and transmission, in accordance with analysts at ING.

The shift away from fossil gas requires the automaker to double down on effectivity so it could possibly liberate sources to construct electrical and self-driving automobiles, Kallenius mentioned.

“We’re hiring lots of new software program engineers, specialists in battery chemistry, electrification,” he defined.

Making Daimler smaller additionally matches with a brand new period the place luxurious not defines itself by opulence and extra but in addition by sustainability and effectivity.

“There isn’t a doubt in our minds that the footprint that this product leaves on this Earth must be smaller. That’s a part of the fashionable luxurious promise,” Kaellenius mentioned.

Mercedes-Benz is tapping engineering experience from its Components One crew to construct the EQXX, an electrical automobile which goals to be probably the most environment friendly automobile able to taking passengers from Stuttgart, Germany, to Marseille, France, on a single cost.

“It’s a pre-development challenge to introduce new applied sciences,” Kaellenius mentioned.

Daimler additionally needs to supply clients new digital companies so it could possibly earn money with new, recurring sources of income akin to assisted driving functionalities and infotainment companies when it unveils a brand new automobile working system in 2024.

“Give it some thought like an iPhone,” Kallenius mentioned, explaining that with new software program updates, new companies and features might be included.

“You possibly can add to it,” he mentioned. “That’s the fantastic thing about it.”

To spend money on digital tech, Daimler plans to faucet development in China, probably by constructing new fashions out there the place Mercedes-Benz sees the most important development potential over the subsequent 10 years.

“If now we have particular person fashions which attain a essential mass in China … that’s attainable,” Kaellenius mentioned, including that no determination has been made to localise manufacturing of recent fashions.

“It depends upon how the market develops,” he mentioned.