In recent years, the global auto industry has witnessed a strong shift to electric vehicles (EVs), driven by commitments to reduce carbon emissions and pressure from environmental policies in many countries.

However, recently, some major automakers seem to be adjusting their strategies, returning to investing in internal combustion engines (ICE) instead of focusing all their efforts on electric vehicles as previously announced.

This trend reflects not only the challenges of electrification but also changes in market demand and economic and technical factors.

In late February, Mercedes-Benz announced that its electric vehicle sales would fall nearly 25% in 2024, while revenue would fall 5% and net profit would drop 28%.

Amid the gloomy business climate, petrol and diesel vehicles remain the company's best-selling product lines.

pdossofpmymhtebsaabj.jpg
German car brands continue to launch internal combustion engine models to ensure profit margins. Photo: The Drive

Between now and 2027, Mercedes-Benz plans to launch 19 internal combustion engine models, surpassing the 17 electric models in the same period – a move that goes against the current electrification trend.

In addition, the German automaker also confirmed that it will develop a new VAN vehicle platform running on an internal combustion engine, instead of switching to a fully electrified platform (VAN.EA) from 2026 as previously planned.

Similarly, Jochen Goller, a member of the BMW board of directors, in an interview with The Financial Times, reaffirmed the strategy of continuing to invest in internal combustion engine technology, emphasizing that "the transition to electric vehicles is still a long way off".

BMW takes a flexible approach, offering a variety of engines for the same model. The X1 and 5 Series, for example, are available in petrol, diesel, hybrid or pure electric versions.

Meanwhile, Porsche is also adjusting its strategy after its electric models failed to meet market expectations. The luxury brand announced it would launch more gasoline and hybrid (PHEV) models.

Notably, in China – the world's largest electric vehicle market – Porsche electric vehicle sales in 2024 fell 28% due to fierce competition from domestic brands such as BYD, Xiaomi and XPeng.

Continuing to use internal combustion engines means Porsche will have to compromise its profit margin in 2025, which is expected to be only 10-12%, significantly lower than the original target of 20%.

Even the Macan – which was announced to be available as a pure electric version from 2026 – will get an internal combustion engine option.

Flexible trends to meet consumer needs

According to a McKinsey survey in mid-2024, 46% of electric vehicle owners in the US intend to switch back to vehicles using internal combustion engines, while the global figure is 29%.

The main reasons given include difficulty in charging, high long-term ownership costs and limitations when travelling long distances.

insideEV.jpg
High-performance models will continue to stick with internal combustion engines alongside electrified versions. Photo: The Drive

By 2025, the decline in electric vehicles in the US could accelerate, partly due to new policies from President Donald Trump.

General Motors (GM) has poured more than $500 million into its Arlington Assembly plant in Texas to strengthen its portfolio of internal combustion engine vehicles, especially large SUVs.

Previously, the company also invested 1 billion USD in two manufacturing plants in Flint (Michigan), showing that GM still has faith in internal combustion engines, while maintaining a parallel development strategy with electric vehicles.

Meanwhile, the poor performance of the electric vehicle segment has led Ford to abandon its plans to go all-electric. The company has stopped production of the F-150 Lightning and canceled its large electric SUV project.

Ford said it will continue to offer internal combustion engine vehicles in markets where there is demand or where there is no developed electric vehicle infrastructure to meet customer preferences and ensure profitability.

In Japan, Toyota, Mazda and Subaru also announced plans to continue investing in internal combustion engines, while stepping up research into carbon-neutral fuels.

This move helps companies maintain flexibility in their product portfolios, meet the diverse needs of global consumers, while ensuring compliance with increasingly stringent environmental regulations.

Hyundai N: History and Meaning of the Letters Representing High-Performance Vehicles When it comes to high-performance vehicles, Mercedes has AMG, BMW has M, and Audi has RS. Now, Hyundai N is also becoming more and more familiar. So what is Hyundai N?