Daimler: $ 4.3 billion in quarterly profits despite chip shortage | Economic news

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By DAVID McHUGH, AP Business Writer

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

Profit margins hit double digits for the third consecutive quarter at 12.8% on higher sales figures and higher profit vehicles dominating the sales mix, the Stuttgart-based company said on Wednesday. This helped boost the company’s cash flow to € 20.9 billion ($ 24.6 billion) at the end of the quarter, from € 20.1 billion at the start.

CEO Ola Kallenius said the company will use its cash to invest in electric car technology and develop a more software-driven company. These are key areas as the industry is disrupted by regulatory requirements for zero-emission cars over the next few years, and the longer-term development of partially or fully autonomous vehicles as well as software-driven services allowing people to use cars only when they need it, for example through smartphone apps.

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

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Kallenius said vehicle production was still hampered by the shortage of semiconductor components that plagued the auto industry around the world. The company said the shortage will continue to affect the business in the second half of the year.

The company is introducing new electric vehicles and said it aims to have a carbon dioxide neutral range by 2039 although it has not specified a date for the exit from production of internal combustion vehicles – that generate the benefits for the transition to zero local emissions. vehicles in all cases. The company is expected to review its strategy for Mercedes-Benz on Thursday.

The update comes on the heels of newly ambitious targets proposed by the European Union’s Executive Board to reduce emissions of carbon dioxide, the main greenhouse gas blamed by scientists for global warming and climate change . The committee called for a 100% reduction in CO2 emissions from cars by 2035, which means the de facto end of gasoline and diesel engines in Europe.

The company plans to split its truck division later this year, in part because cars and trucks move to different technologies, with cars having to use batteries while long-haul trucks in some cases will rely on batteries. hydrogen fuel to achieve zero local emissions. transport in the years to come.

For the second quarter, Daimler’s net profit stood at 3.7 billion euros, compared to a loss of 1.9 billion euros in the period April-June 2020 when the company had to close down factories during the first phase of the COVID-19 pandemic. Turnover increased 44% to 43.5 billion euros.

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