The bumpy transition toward electric vehicles
Daimler announced over $1 billion in job cuts over the next three years on Thursday, citing the costs of moving the company toward a more climate-friendly product line and meeting EU emissions targets.
Why it matters: The German auto behemoth's announcement is a sign of how the wider industry's movement toward electric vehicles and automated technology will be a bumpy ride.
- "Daimler has been burning through cash in the past few months as it grapples with the cost of electrification," the Financial Times notes.
- The company has various climate and EV goals, such as having plug-ins and full electrics comprising over 50% of Mercedes-Benz car sales by 2030.
The big picture: It also comes amid sluggish global auto sales. The company, at an investor presentation Thursday, cited "headwinds" from trade disputes and "overall economic uncertainty."
What they're saying: CEO Ola Källenius said that the company's metamorphosis will have a "negative impact" on earnings in 2020 and 2021.
- "The expenditure needed to achieve the CO2 targets require comprehensive measures to increase efficiency in all areas of our company. This also includes streamlining our processes and structures," he said in a statement.
Quick take: U.S. automakers are hardly immune from the climate and EV-related forces that are acting on Daimler — pressures that would grow stronger if a Democrat wins the White House.
- As Axios' Joann Muller pointed out during the now-ended strike at General Motors, that dispute was in part a sign of how automakers' traditional business models will have to change.