Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Daimler chairman calls for 'universal CO2 tax'
Daimler AG Chairman Ola Kallenius poses with the Mercedes-Benz VISION AVTR during the brand's press conference at the 2020 Consumer Electronics Show in Las Vegas, Tuesday (KST). Courtesy of Mercedes-Benz
By Nam Hyun-woo
By Nam Hyun-woo
LAS VEGAS ― Daimler AG Chairman and CEO Ola Kallenius called for additional taxation for CO2 which is “universal across industries” as it would be the most economical way to solve global problems stemming from carbon emissions.
“We have changed our policy position and we think there should be a CO2 tax ― not something that you would have traditionally heard from the auto industry maybe some years ago,” Kallenius said during an interview on the sidelines of the 2020 Consumer Electronics Show (CES) in Las Vegas, Wednesday (KST).
“Ideally, that tax should be universal, tradable and universal across industries. That would be the most economically and resource-efficient way of solving problems of CO2,” he said. “If you do it cross-sector, every sector could trade with each other. It would be too optimistic to think it's going to happen soon all over the world, but you can see things are going in this direction.”
Kallenius said Germany is starting to put a tax on CO2 and other countries are doing this as well, which will help not only Mercedes-Benz but also other automakers or other industries to use the money generated from the CO2 tax for technological progress.
“Ultimately, you have to have a market economy and allow supply and demand to take over. But a CO2-free world and CO2-free individual mobility does not come at zero cost,” he added.
The new Mercedes-Benz head took the assessment after the German luxury car brand presented its new policy to pursue “sustainable luxury,” by “decoupling volume growth from resource consumption.”
The new chairman, who took the helm of Daimler AG in May last year, has been expediting the auto giant's transition to sustainable mobility. As the embodiment of the policy, Mercedes-Benz introduced the Mercedes-Benz VISION AVTR vehicle during the CES, which was inspired by the movie Avatar.
Kallenius admitted that pursuing an eco-friendly business is not free from financial pressures, because of the investments and higher cost structures. Soon after he became the chairman, he issued warnings that the company's earnings would remain under pressure for the next two years and the transition will be painful.
“At the beginning of electrification, we naturally have high investments and higher cost structures,” he said during the interview. “In the next three years, we're going to cut at least ten percent of all management positions. We're aiming to save, by the end of 2022, 1.4 billion euro in personnel costs annually… However, as we scale this up over the next few years and make technological advances, we're going to gradually bring costs down.”
Regarding any updates over its business strategy in the South Korean market, he only underscored Mercedes-Benz's commitment to the country will continue to grow and there will be more Korean companies to work with.
“We have upped our commitment towards Korea,” he said. “In the beginning, it was a sales market, but now it's a technology market, so we work with a lot of Korean companies. I would say we have broad commitment to Korea beyond just selling cars.”
Mercedes-Benz has been the top import brand in the Korean market for four straight years. Last year, it sold 78,133 vehicles in Korea, up 10.4 percent from a year earlier.