Mercedes-Benz will invest €14 billion ($A22.5b) to keep the internal combustion engine (ICE) alive for as long as possible. Like many automakers the company is winding back the previous statements about only selling electric vehicles by 2030, prompted by the declining growth in EV sales.

Speaking to German publication WirtschaftsWoche, Mercedes-Benz Group CEO Ola Källenius said he now expected ICE-powered technology to “last well into the 2030s” and that substantial investments were required to ensure they remain relevant.

He said most of the money will be spent developing “high-tech combustion technology”, suggesting the German brand will develop a new ICE family fit for the future.

It’s likely the engines will be electrified, while Källenius confirmed Mercedes would continue to invest in both petrol and diesel powerplants. During the interview, Källenius said the new investment would introduce a big update for its flagship Mercedes-Benz S-Class.

“We have invested a lot more in the model update of the new combustion engine S-Class than we normally spend on a facelift,” he said, adding that the upgrades will elevate the limo to the “very highest technological level”.

Without the investment, Källenius said Mercedes’ ICE business would stall in 2027 or 2028 as a direct result of incoming Euro 7 and China 7 emissions regulations, which will effectively ban the current family of engines.

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