Mercedes-Benz will earn as much from electric cars as its luxury combustion engine models by the end of this decade, its chief executive said, becoming the first premium German automaker to provide a precise target for the turning point in profits. Ola Källenius, boss of Mercedes owner Daimler, revealed the timetable after the company announced it would divorce its car arm from its trucks unit in an attempt to ape the soaring market valuation of electric auto pioneer Tesla.

“Our task is to take the healthy business model of today and to prove to ourselves and to the financial markets that we can have healthy returns when we become a dominant electric company,” Källenius told the Financial Times.Markus Duesmann, head of rival luxury carmaker Audi, told the FT in January the brand’s electric cars would match combustion engine profits within a “very few years”. Porsche and BMW, rival premium German carmakers have yet to provide precise dates.

The cost of electric components, such as batteries, were declining rapidly, Källenius said, meaning the Stuttgart-based company would “eventually have the same contribution margins on electric vehicles as we have on the combustion vehicles”.

Källenius, who took the helm of Daimler in 2019, announced on business, which will be renamed Mercedes-Benz, will maintain a minority stake in the truck spin-off that is likely to be no smaller than a blocking minority of 25 per cent, according to a person close to the company. Mercedes’ renewed focus on luxury electric vehicles would allow the slimmed-down company to “unlock the potential” of its stock, the Swedish boss said.