Mercedes Reverses Upmarket Push to Prioritize Smaller ICEs and Hybrids Over Luxury EVs [Updated]

It seems like only yesterday that automakers were racing to sell the priciest new cars possible. In times of constricted supply chains that made volume sales impossible, carmakers like Mercedes-Benz sought to wring the most profit from every individual sale. Well, times have changed again, and Mercedes now expects to do the opposite: Focus on its affordable models as the economy squeezes even its own customers.

Update: Feb. 16, 3:30 p.m. ET: A Mercedes spokesperson told The Drive that Automotive News misrepresented a prior interview to present an incomplete picture of the company's strategy. They told us: "To clarify, we are not changing our strategy.  Our long-term strategy is to go all electric in the future where market conditions allow.  In the short/near term, we will leverage the strength of our top end vehicle portfolio (TEV); and balance the short term with tactical flexibility on ICE, EV, PHEV to maximize growth opportunity and local market demands."

Mercedes reportedly outlined this plan at a dealer event attended by Automotive News, which reported the brand is reversing the course it set for itself in 2022. That was when Mercedes pledged to prioritize its luxury flagships like the S-class and G-Wagen, and launch an ultra-exclusive new brand. It had also discontinued its cheapest A-class and B-class models, which made sense at a time when supply was limiting Mercedes' business, not demand.