Mercedes-Benz unveiled a series of changes to its long-term climate goals, including changing its prior target to make its fleet of new passenger cars carbon neutral by 2039 with new individual targets for emissions from production, vehicle use and its value chain, adding an “as market conditions allow” caveat to its vehicle use-phase ambition, and rolling out a new target to achieve net zero across the value chain by 2049.

The new targets were released alongside the announcement of a significant update in Mercedes-Benz’s overall sustainability strategy, with the company shifting to a more focused set of strategic sustainability topics, including Decarbonization, Circularity, Safety and People.

Mercedes-Benz initially launched its “Ambition 2039” goal to make its fleet of new passenger cars net carbon neutral over the entire vehicle lifecycle and at all stages of the value chain by 2039 in 2019. In the intervening years, however, have seen significant changes in market, geopolitical and regulatory changes, including a slower than expected electric vehicle uptake and a significant shift in policy direction in the U.S. under the Trump administration away from supporting a shift to EVs. Most recently, the European Commission has moved to pull back on its target requiring a 100% reduction in CO2 emissions from new cars and vans by 2035, which would effectively have ended the sale of new internal combustion cars and vans in the EU by that time.

In place of its prior target, Mercedes-Benz revealed a series of new 2039 goals, with the company now committing to a 90% reduction in production emissions, an 80% cut in use-phase emissions – adding in “as market conditions allow,” – and an overall 70% reduction in CO2 across all relevant value chain stages, on a 2019 basis.

The company also released a new target to achieve net zero by 2049, including reducing CO2 emissions across all relevant value chain stages will be reduced by at least 90%, with the remaining 10% to be neutralized permanently.

Mercedes-Benz highlighted its key decarbonization focus areas, including the electrification of its fleet, the use of renewable energy in production and through the use of low carbon and circular materials in production. Alongside the new targets, the company announced a series of supply chain decarbonization initiatives, including joining the Aluminum Sector of the First Movers Coalition (FMC) with plans to source at least 10% of its annual primary aluminum demand in line with the coalition’s criteria by 2030, a new offtake agreement with Hydro for aluminum produced using electrolysis powered by renewable energy, and a new agreement with HyIron to scale up low-carbon steelmaking.

Mercedes-Benz updated sustainability strategy marks a sharper focus from its 2024 update, which set out six key strategic environment, social and corporate governance topics. The update combines these into four areas, including Decarbonization, encompassing the company’s operations and value chain with a focus on electrification, supply chain, logistics and production; Circularity, focused on decoupling resource consumption from volume growth and increasing the use of secondary raw materials to 40% within the next decade; Safety, combining the prior areas of traffic safety and digital trust, and; People, bringing together the prior areas of employees and human rights across product value chains.

Olaf Schick, Member of the Board of Management of Mercedes-Benz Group AG, Integrity, Governance & Sustainability, said:

“Even in challenging market conditions, Mercedes-Benz puts sustainability at the core of its strategy alongside resilience and competitiveness. With the enhanced transparency of Ambition 2039 we are outlining new milestones in our decarbonization pathway to turn sustainability into operational reality: tangible, measurable and infused into the heart of our products.”