Mercedes-Benz Isn’t Giving Up on the Combustion Engine
Ola Källenius says diesel still has a future as Mercedes develops a new generation of electrified petrol and diesel powertrains.
As Mercedes-Benz accelerates its electric vehicle programme, chairman Ola Källenius is making a different point: the internal combustion engine is not finished. Instead, the company is investing in a new generation of electrified petrol and diesel powertrains, bringing traditional mechanical engineering and electric assistance closer together.
For years, the automotive industry has been preparing for an electric future. Manufacturers have invested billions in battery technology, dedicated electric platforms and new production facilities, while governments and regulators have pushed towards lower-emission transportation. But the transition has not followed the timetable many anticipated.
In an interview published by Autocar India on November 4, 2026, Mercedes-Benz chairman Ola Källenius offered a revealing assessment of where the company stands. His message was straightforward: diesel is still alive, and Mercedes-Benz intends to continue offering sophisticated combustion-engine vehicles alongside its expanding electric portfolio.
Speaking ahead of the launch of the new electric GLC in Pune, India, Källenius confirmed that the company is investing in a new generation of electrified internal combustion engines, developed with future emissions requirements in mind.
“For those that need a high-tech, electrified, combustion choice, don’t worry about it. We got you covered for as long as there’s meaningful demand,” he told Autocar Professional.
It is not an announcement that Mercedes is abandoning electrification. Quite the opposite. Källenius reaffirmed that zero-emission mobility remains the destination. However, he acknowledged that the journey towards it will differ considerably between markets, customers and vehicle categories.
The combustion engine is changing, not disappearing
To understand what Mercedes is developing, it is worth distinguishing between a conventional internal combustion engine and an electrified combustion powertrain.
An ICE, or internal combustion engine, generates mechanical energy by burning petrol or diesel inside its cylinders. In a traditional vehicle, that engine supplies propulsion through a transmission and drivetrain.
An electrified ICE retains the combustion engine but adds electrical assistance. Depending on the system, this can include a 48-volt electrical network, an integrated starter-generator, a larger electric motor, a high-voltage battery or plug-in charging capability.
The distinction matters because electrification does not necessarily mean that the combustion engine has been replaced.
In a mild hybrid, the engine remains responsible for driving the vehicle, while an electric motor assists during acceleration, recuperates energy during braking and can make stop-start operation smoother. A full hybrid can operate using electric propulsion alone for limited periods and under suitable conditions. A plug-in hybrid takes the arrangement further, using a larger battery that can be charged externally and allowing considerably more electric-only driving.
These systems offer manufacturers different ways of reducing fuel consumption and emissions without immediately requiring customers to transition to a fully electric vehicle.
For Mercedes-Benz, the objective is to make its combustion engines more efficient, more refined and better integrated with electrical technology.
Mercedes’ new approach: The engine and electric motor working together
One of the more interesting developments is Mercedes-Benz’s modular FAME engine family, short for Family of Modular Engines. Rather than designing entirely separate powertrains for every vehicle, Mercedes has developed a modular approach that allows petrol and diesel engines, hybrid systems and associated technologies to be adapted across different vehicle classes.
The company’s October 27, 2026 technical announcement explains that its petrol and diesel hybrid engines use the second-generation integrated starter-generator, known as ISG 2.0.
This is important because the electric motor is no longer simply an auxiliary component added to the drivetrain. It is becoming an integral part of how the combustion engine delivers power.
What does ISG 2.0 actually do?
Electric boost: It supplies additional torque when the vehicle accelerates, helping the engine respond more quickly.
Energy recuperation: During braking and deceleration, it converts some kinetic energy into electrical energy, which is stored in the battery.
Stop-start operation: It restarts the engine more quickly and smoothly when the vehicle moves away from a stop.
Coasting: Under suitable conditions, the combustion engine can switch off temporarily while the vehicle continues moving.
Improved low-speed response: Electrical assistance helps compensate for the delay associated with turbocharging.
The latest ISG 2.0 system can provide up to 17 kW of additional output and 205 Nm of additional torque in the new C-Class engine range.
There is another development worth examining: Mercedes’ use of electrically powered auxiliary compressors. In the new C-Class, the two-litre M254 EVO petrol engine uses an electric auxiliary compressor to provide additional boost at low engine speeds. Unlike a conventional turbocharger, which relies on exhaust gases to spin its turbine, the electric compressor can respond independently of exhaust flow.
This helps reduce turbo lag and produces more consistent acceleration. In other words, Mercedes is using electrical technology to improve the operating characteristics of the combustion engine itself, rather than simply using an electric motor to move the vehicle.
Is Mercedes reshaping the traditional hybrid?
Potentially, yes. But the important development is not that Mercedes has invented a completely new category of hybrid. It is that the company is refining the relationship between combustion and electrical assistance.
|
Technology |
How it works |
|
Conventional ICE |
Combustion engine supplies propulsion. |
|
48V mild hybrid |
Combustion engine remains primary, with electric assistance. |
|
Plug-in hybrid |
Combustion engine and larger electric motor can both propel the vehicle, with external battery charging. |
Mercedes is developing all three approaches. Its mild-hybrid systems are particularly interesting because they can improve efficiency without requiring the packaging compromises or charging routines associated with a large plug-in battery.
The plug-in hybrid, meanwhile, offers a different proposition. A larger battery and electric motor can handle a greater proportion of everyday journeys without using the combustion engine.
The new C-Class plug-in hybrid, for example, is advertised with an electric-only WLTP range of up to 100 kilometres. This gives Mercedes a way to offer customers something closer to an electric driving experience while retaining the flexibility of petrol or diesel propulsion for longer journeys.
The result is a more sophisticated hybrid strategy, with electrical assistance becoming increasingly important to the performance, efficiency and refinement of the conventional engine.
Mercedes is not abandoning its six-cylinder or V8 engines
Perhaps the most reassuring development for traditional engine enthusiasts is what Mercedes is doing at the upper end of its range. The company is continuing to invest in larger combustion engines, including six-cylinder and V8 configurations.
The M256 EVO inline-six
The S 500 4MATIC uses the updated M256 EVO, a 3.0-litre inline-six petrol engine. Mercedes has improved its electric auxiliary compressor, intake and exhaust ports, and intake camshaft. The engine produces up to 443 lb-ft of torque, with a temporary increase to 472 lb-ft through its overtorque function. It also incorporates a 23 hp integrated starter-generator.
The inline-six configuration remains important to Mercedes because of its naturally balanced mechanical characteristics, smoothness and refinement.
The M177 EVO V8
The updated M177 EVO V8 in the S 580 4MATIC produces 530 hp and 553 lb-ft of torque. It combines mild-hybrid electrical assistance with revised injection and combustion management, updated intake and exhaust ports, and a flat-plane crankshaft with a revised firing order.
The introduction of a flat-plane crankshaft is particularly interesting because it changes the engine’s firing characteristics and rotating dynamics. It is a significant mechanical development rather than simply an electrical upgrade. Mercedes has also improved the turbocharger compressor and housing to enhance responsiveness.
The S 580e plug-in hybrid
Mercedes has not abandoned its larger hybrid configurations either. The S 580e combines an upgraded inline-six with an electric motor to deliver a combined 576 hp.
This demonstrates that the company is pursuing two different engineering objectives: retaining the character and performance of larger combustion engines while using electrical assistance to improve their efficiency and response.
How much of Mercedes’ existing business has actually gone electric?
Mercedes-Benz’s 2025 sales figures show that the company delivered 1,801,291 passenger vehicles worldwide. Of those, 368,700 were classified as electrified vehicles, or xEVs. However, xEV does not mean fully electric. It includes both battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs).
|
2025 sales category |
Units |
Share of total |
|
Battery-electric vehicles |
168,823 |
9.4% |
|
Plug-in hybrids |
199,877 |
11.1% |
|
Non-xEV remainder |
1,432,591 |
79.5% |
|
Total passenger cars |
1,801,291 |
100% |
There are three important observations here. First, fully electric vehicles represented approximately 9.4% of Mercedes-Benz Cars’ total sales in 2025. Second, plug-in hybrids actually outsold fully electric vehicles, with 199,877 units compared with 168,823 battery-electric vehicles. Third, almost 80% of the company’s passenger-car sales were outside the xEV category.
That last figure is particularly important. Mercedes has not replaced most of its combustion-engine business with fully electric vehicles. Even within its electrified sales, a significant proportion still relies on a combustion engine.
There is also a distinction worth making: mild hybrids are not necessarily included in the company’s reported xEV figures, so the 79.5% should not be interpreted as a count of vehicles with no electrical assistance whatsoever.
Mercedes’ 2026 guidance anticipates an xEV share of 21–23% for its passenger-car division. The company’s direction is clear, but combustion powertrains remain commercially important.
Forty new models, two different automotive futures
Mercedes is undertaking an extensive product programme, with more than 40 new models planned within approximately three years, running through the end of 2027. Importantly, this programme includes both combustion and electric vehicles.
The company is also moving towards a strategy in which its electric and combustion models can share more of their visual identity, technology and customer experience, without necessarily sharing the same underlying vehicle architecture.
A dedicated electric platform can accommodate a battery pack and electric drivetrain more effectively than a conventional combustion platform converted to electric propulsion. Equally, a dedicated combustion architecture allows engineers to optimise engine placement, transmission packaging, cooling and mechanical characteristics.
Mercedes is therefore retaining the flexibility to develop both. Its updated C-Class, electric GLC and new S-Class illustrate how that strategy is unfolding across different segments.
Why diesel still matters
Källenius made a particularly interesting argument about diesel, pointing to drivers who cover 60,000–70,000 kilometres annually. For these motorists, fuel economy, long-distance efficiency, refuelling convenience and operating costs remain significant considerations.
Diesel engines generally deliver strong low-speed torque and can be particularly efficient under sustained motorway conditions. Mercedes also identified commercial vehicles and larger passenger vehicles as important applications.
The company says its newer combustion engines are prepared for the upcoming Euro 7 emissions requirements. That is important because retaining diesel does not mean retaining the technology unchanged. Manufacturers must continue developing combustion and exhaust-treatment systems to satisfy increasingly demanding emissions legislation.
The challenge is to make these engines cleaner without compromising the characteristics that make them useful to particular customers.
Källenius has not announced a definitive retirement date for diesel. Instead, he has indicated that Mercedes will retain it for as long as meaningful demand exists.
The engineering work happening in India
During his visit to Mercedes-Benz Research and Development India (MBRDI), Källenius met engineers working on improving the automatic stop-start system.
At first glance, this might sound like a relatively small engineering assignment. However, it illustrates how much attention manufacturers are now paying to the interaction between mechanical and electrical systems.
When a vehicle stops at a traffic light, the engine shuts down. When the driver releases the brake or accelerates, it must restart quickly and smoothly. The challenge is not simply making the engine restart. It is ensuring that the transition is almost imperceptible to occupants.
The integrated starter-generator plays an important role here, allowing the engine to restart more quickly than a conventional starter arrangement.
MBRDI’s work also extends into powertrain development, mechanical engineering, electrical systems and software. Its engineers are integrated into Mercedes-Benz’s global development organisation.
This is a reminder that the modern combustion engine is no longer an isolated mechanical assembly. Its performance increasingly depends on software, electrical control systems, energy recovery and thermal management.
Is the combustion engine entering another golden age of engineering?
There is an interesting contradiction unfolding within the automotive industry. For years, the combustion engine was treated as a technology approaching the end of its development cycle. Investment and engineering attention increasingly shifted towards battery technology, electric motors and charging infrastructure.
But what Mercedes is demonstrating is that the combustion engine still has room for development.
Electric compressors are helping reduce turbo lag.
Integrated starter-generators are improving torque delivery.
Hybrid systems are recovering energy that would otherwise be lost during braking.
More sophisticated engine management is improving combustion efficiency.
New exhaust-treatment systems are being developed to meet stricter emissions standards.
Plug-in hybrids are allowing combustion engines and electric motors to share propulsion duties.
These developments do not make a petrol or diesel engine emission-free. Nor do they remove the environmental advantages of eliminating tailpipe emissions through battery-electric propulsion. But they demonstrate that the future of the combustion engine is not necessarily a simple process of gradual disappearance.
Mercedes-Benz appears to be preparing for a period in which different powertrain technologies coexist, with each serving different driving requirements and markets.
And perhaps that is the most significant message from Mercedes-Benz right now: the electric future may be approaching, but the mechanical engine is not ready to surrender its place just yet.
.
Sources and further reading
Autocar India – Diesel is still alive: Mercedes chairman backs ICE alongside EV expansion (4 November 2026). https://www.autocarindia.com/car-news-amp/diesel-is-still-alive-mercedes-chairman-backs-ice-alongside-ev-expansion-441241
Autocar Professional – Combustion engines will remain for another 10–15 years.
Mercedes-Benz – Powertrain technologies and the new C-Class engine range (October 2026).
Mercedes-Benz – New S-Class powertrain developments.
Mercedes-Benz Group – 2025 sales and financial results.
Editorial verification note: 2025 sales figures are the latest full-year figures used in this article, not a claim about the final 2026 sales mix. xEV includes battery-electric and plug-in hybrid vehicles; mild hybrids may be classified separately.
