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Mercedes Benz Mulls Diversification into Defense

President of the European Automobile Manufacturers' Association (ACEA) Ola Kallenius attends a press point in the European Parliament in Brussels, Belgium, 13 May 2026. (EPA)
President of the European Automobile Manufacturers' Association (ACEA) Ola Kallenius attends a press point in the European Parliament in Brussels, Belgium, 13 May 2026. (EPA)
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Mercedes Benz Mulls Diversification into Defense

President of the European Automobile Manufacturers' Association (ACEA) Ola Kallenius attends a press point in the European Parliament in Brussels, Belgium, 13 May 2026. (EPA)
President of the European Automobile Manufacturers' Association (ACEA) Ola Kallenius attends a press point in the European Parliament in Brussels, Belgium, 13 May 2026. (EPA)

The CEO of German automaking giant Mercedes-Benz has said he has not ruled out entering the defense industry.

"The world has become more unpredictable, and I think it is quite clear that Europe needs to strengthen its defense capabilities," CEO Ola Kaellenius said in an interview with The Wall Street Journal published Friday.

"If we are able to play a positive role in this area, we would be ready to do so," said Kaellenius, a German-Swedish national.

His remarks come amid Germany beefing up its military capacity in response to Russia's invasion of Ukraine in February 2022.

The German defense industry has locked onto that trend, as illustrated by the rise of arms maker Rheinmetall in recent years, with the group recently pushing into the naval and drone-making spheres.

In contrast, German automakers, such as Mercedes-Benz and Volkswagen, are battling crises, caught between tariffs and bitter Chinese competition.

In late March, the CEO of fellow German auto giant, Volkswagen, Oliver Blume, said he was "in contact" with defense companies, particularly those involved in missile defense, to convert a German factory to produce military transport equipment.

According to the Financial Times, discussions are under way with Rafael Advanced Defense Systems, the company that designed Israel's Iron Dome.

Asked by AFP to comment on Kaellenius's interview, a Mercedes-Benz spokesperson said the firm "has for many years been supplying chassis to specialized firms which equip and market them under their own responsibility and under their own brand for military applications".

"Our activities in the security and defense sector constitute a strategic development focus that we will continue to actively pursue, in collaboration with our partners," the spokesperson added.

In his Wall Street Journal interview, Kaellenius did not go into details on what kind of products Mercedes-Benz might manufacture.

He predicted that defense-related business would represent only a "minor part of Mercedes-Benz's operations" compared with auto and van manufacture.

But he added defense could be "a rapidly growing niche that could also contribute to the group's financial results."

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Business

Focus Turns to Building Stronger Institutions in Africa to Speed Shift to Renewable Energy

A solar power plant in Burkina Faso (Reuters)
A solar power plant in Burkina Faso (Reuters)
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Focus Turns to Building Stronger Institutions in Africa to Speed Shift to Renewable Energy

A solar power plant in Burkina Faso (Reuters)
A solar power plant in Burkina Faso (Reuters)

Africa’s biggest clean energy challenge is shifting from building projects to building the institutions, markets and regulatory systems needed to deliver them at scale, experts say.

That challenge is emerging even as clean energy reaches a historic milestone globally.

Renewables generated 34% of the world’s electricity in 2025, overtaking coal’s 33% share. Together with nuclear power, renewables are expected to provide half of global electricity by 2030.

As industrialization, artificial intelligence and electrification push demand higher, experts say the bottleneck in transitioning to cleaner energy has shifted from technology to the systems supporting it, including funding.

Overcoming such obstacles is vital for securing access to power for the 600 million people in Africa who are yet to be connected.

“Clean energy is now cheaper than fossil fuels in virtually every part of the world,” former New York City Mayor Michael R. Bloomberg, the UN Secretary-General’s Special Envoy on Climate Ambition and Solutions, said in late June while announcing a new $285 million Bloomberg Philanthropies initiative to strengthen clean energy industries in emerging and developing economies.

“But fixable obstacles are still slowing down deployment, and with energy demand rising at an unprecedented speed, we can’t allow those obstacles to continue standing in the way,” The Associated Press quoted him as saying.

Rather than financing solar farms or wind projects directly, the initiative will invest in strengthening market design, regulatory capacity, technical expertise and industry institutions, areas increasingly viewed as essential for attracting private investment and accelerating use of renewable energy.

It reflects a growing consensus that Africa’s energy transition is constrained less by a lack of renewable resources or viable technologies than by the institutional capacity needed to turn those advantages into financially viable projects and electricity on the grid.

Many projects remain delayed by weak market design, limited grid planning, slow permitting processes and fragmented regulatory systems.

“What has been missing is not the potential, but the institutional infrastructure and capabilities to unlock it,” said Saliem Fakir, executive director of the African Climate Foundation.

“Philanthropy that targets those gaps directly is the kind of intervention that can shift the trajectory of a continent’s energy system.”

Across Africa, renewable energy costs have fallen sharply while investment appetite continues to grow. However, investors say policy uncertainty, slow permitting processes and limited regulatory capacity are hindering projects.

Wangari Muchiri, founder and chief executive of RE.Think Energy, said the commitment signals that “the next phase of the energy transition is not about proving clean energy works, it’s about removing the barriers preventing it from scaling fast enough.”

The Bloomberg initiative is looking beyond ambitious renewable energy targets to focus on helping projects attract long-term investments and connect to national grids.

“The next chapter of Africa's renewable energy story will not be only by the projects it builds, but the institutions that make these projects possible,” Muchiri said.

Business

Volkswagen CEO Looks to Avoid Plant Closures as Automaker Moves to Cut Costs

FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo
FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo
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Volkswagen CEO Looks to Avoid Plant Closures as Automaker Moves to Cut Costs

FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo
FILE PHOTO: Oliver Blume, CEO of Volkswagen AG and Porsche AG, speaks during the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen/File Photo

Volkswagen's CEO indicated in comments published Sunday that he's trying to avoid closing plants as he seeks to turn around the automaker's performance.

The Wolfsburg, Germany-based company faces pressure to cut costs at home and increasingly intense competition in the lucrative Chinese market, in particular.

Last week, Volkswagen said its “fundamental realignment” over the past three years had reached its next phase, announcing plans to streamline the model lineup by up to half.

It didn't provide specifics, and questions remain over how else it will cut costs. There has been renewed speculation about the future of several plants in Germany.

“There are more intelligent solutions than closing plants,” CEO Oliver Blume told the Bild am Sonntag newspaper, according to The Associated Press.

He added that a cost-cutting program in Germany already is producing effects. “We were able to improve our factory costs in Germany by an average 20% last year alone,” he said, describing that as “strong progress.”

Blume argued that Volkswagen's products are very popular, but “we just earn too little money with them. So we must continue to reduce our costs. In all kinds of costs.”

Business

While Global Oil Demand Drops, US Drivers Keep Buying More Gas

A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)
A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)
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While Global Oil Demand Drops, US Drivers Keep Buying More Gas

A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)
A man stands near his car at a gas station in Austin, Texas - July 10, 2026 (AFP)

While global oil demand is set to decline this year due to the US-Iran conflict, gasoline consumption in the United States increased in the second quarter of 2026.

Gasoline prices surpassed $4.50 on average for a gallon of regular in the US in May, rising more than 50% since the start of the war, according to AAA data.

But that didn’t stop drivers from hitting the road; in fact, gasoline consumption rose in the US during the second quarter of the year, according to AP.

One reason may be because the percentage of household income spent on gasoline in the US has been declining for years, said Daniel Sternoff, senior fellow at the Center on Global Energy Policy at Columbia University. Plus, many people have been transitioning from remote work to in-office jobs, he added.

“Even though it’s a really political price that people pay a lot of attention to, if you are in the higher quintiles of income in the US, you might grumble about it, but you’re not really driving less just because of that increase in prices,” Sternoff said.

Jim Burkhard, vice president and head of crude oil research at S&P Global Energy, said, “The future of Hormuz is probably more uncertain today than it was at the beginning of the war.”

Burkhard said Iran is still trying to control the strait, while the US has not been able to fully restore normal operations, making a return to prewar conditions unlikely.

Global oil demand averaged just 97.9 million barrels per day in May, down 5.3 million barrels per day from a year earlier. Much of the decline was in Asia, which relies heavily on oil from the Middle East.

According to a report from the International Energy Agency Global, oil demand is set to decline this year for the first time since the height of the COVID-19 pandemic in 2020.

The drop, which the agency expects to amount to about 1 million barrels per day in 2026, is due to higher oil prices and disruptions to physical supply that weighed heavily, but unevenly, on various parts of the world, the report said.

The supply disruptions were caused by the war between the US and Iran, which left ships loaded with crude oil stranded in the Arabian Gulf for more than three months, unable to safely travel through the Strait of Hormuz, a major route for oil and gas shipments.

But the main exception to the global slump in oil usage was in the US, where gasoline use increased in the second quarter of 2026, despite the fact that pump prices were about 50% above their prewar levels in May, the report said.