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Daimler Truck spin-off already unlocking value, Daimler CEO says

Daimler Truck spin-off already unlocking value, Daimler CEO says
Daimler Truck spin-off already unlocking value, Daimler CEO says   -   Copyright  Thomson Reuters 2021
By Reuters

By Victoria Waldersee

FRANKFURT – Spinning off Daimler Truck has already proven a solid move to unlock value for Daimler AG shareholders, CEO Ola Kaellenius said on Friday, with the execution of its electrification strategy the next step.

Speaking hours after the luxury carmaker’s truck and bus division was listed on the Frankfurt Stock Exchange, Kaellenius said Daimler shares had already benefited from the decision and would continue to do so.

“With a very robust first price of the Truck side today I think that part of the equation has now been fulfilled,” Kaellenius said.

“Now it’s all about executing our strategies and unlocking even more value in these two shares in years to come.”

Daimler shares, up 33% since the spin-off was first announced in February this year, were 3.51% higher by 1252 GMT. Daimler Truck shares were at 28.7 euros compared to a debut price of 28 euros.

Sky-high stock market valuations of electric-only players like Tesla and Rivian have placed pressure on traditional automakers to prove their worth to shareholders amid growing consumer and regulatory pressure to lower emissions.

Soon to be renamed Mercedes-Benz AG, Daimler’s focus is now squarely on leading the premium electric vehicle market and developing its software capabilities, with Kaellenius describing it as a “blend of a luxury car and a tech company.”

The carmaker is hiring 3,000 engineers globally to develop its own operating system for electric-only vehicles, expected to hit the market from 2024.

Keeping software close to the business was a strategically important, Kaellenius said.

On other aspects of the electric vehicle value chain such as batteries and charging networks, the carmaker operates largely through a number of joint ventures with other firms including BMW, Stellantis and others.

Geographic diversity was key in areas such as battery production, the CEO said when asked whether the company would in the long-term seek to concentrate battery production in Europe.

A flexible supply chain across the board would remain key into 2022 in particular to minimise the impact of the continuing semiconductor shortage, Kaellenius said, after the carmaker reported passenger car sales more than 20% below last year’s levels in October and November.