$4.3 billion quarterly profit despite chip shortage – KIRO 7 News Seattle

FRANKFURT, Germany – (AP) – German automaker Daimler posted strong profits in the second quarter as demand for its Mercedes luxury cars continued to rebound from the depths of the pandemic, generating money the company can invest in its shift to electric vehicles .

The Stuttgart-based company announced on Wednesday that its profit margins reached double digits at 12.8% for the third quarter in a row, thanks to increasing sales figures and profitable vehicles that dominated the sales mix. This helped increase the company’s cash position at the end of the quarter from EUR 20.1 billion at the beginning to EUR 20.9 billion ($ 24.6 billion).

CEO Ola Kallenius said the company will use its money to invest in electric car technology and build a more software-centric company. These are key areas as the industry will be disrupted in the next few years by regulatory requirements for emission-free cars and by the longer-term development of partially or fully autonomous vehicles and software-controlled services that enable people to use cars only when they need them them, for example through smartphone apps.

“Our change to emission-free and software-driven mobility is supported by a high free cash flow in the industrial business,” said Kallenius in a statement. “We are implementing our strategy at full speed.”

Kallenius said vehicle production is still hampered by the semiconductor component shortage that has hit the automotive industry worldwide. The company said the shortage will continue to affect business in the second half of the year.

The company is introducing new electric vehicles and has announced that it will have a carbon-neutral range of products by 2039, although it has not set a date for phasing out internal combustion-engine vehicles – which will make the profits for moving to zero local emissions vehicles, anyway . The company will revise its strategy for Mercedes-Benz on Thursday.

The update follows new ambitious goals proposed by the European Union’s Executive Commission to reduce emissions of carbon dioxide, the main greenhouse gas that scientists hold to be responsible for global warming and climate change. The commission called for a 100 percent reduction in CO2 emissions from passenger cars by 2035, which means a de facto end to gasoline and diesel engines in Europe.

The company plans to spin off its trucking business later this year, in part because cars and trucks transition to different technologies, with cars likely to use batteries, while long-haul trucks will in some cases rely on hydrogen fuel cells to handle local emissions to avoid traffic in the next few years.

In the second quarter, Daimler’s net profit was 3.7 billion euros, after a loss of 1.9 billion euros in the period April to June 2020 when the company had to close plants in the early stages of the COVID-19 pandemic. Sales rose by 44% to 43.5 billion euros.

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