Mercedes-Benz banking on luxury drivers embracing electric vehicles

German automaker Mercedes-Benz has high expectations that luxury car buyers will help usher in the transition from internal-combustion engines towards electric vehicles in the years to come.

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The company is witnessing a trend towards EVs and wants to be carbon dioxide neutral by 2039. All Mercedes models will have electric versions by 2025 and will go fully electric-only after that year. In addition to being better for the environment - as automakers look to reduce CO2 emissions - Mercedes understand that it very well may be a better business decision as well.

Mercedes delivered around 31,000 EVs during the first two quarters of 2022 but has admitted it's essentially sold out of EV models through the rest of the year. Meanwhile, production will continue to accelerate as fast as possible - a difficult feat considering current semiconductor shortages and other logistical problems - though the company expects an easier time in 2023.

As noted by Ola Kallenius, CEO of Mercedes-Benz, in a statement to CNBC's Jim Cramer while speaking at the CNBC ESG Impact conference: "Step by step, we see the market turning. I really believe that in this decade, we will flip from being based upon high tech internal combustion engines to going dominant electric, if not all electric, in the luxury segment."

It may take some time, but Mercedes has full faith its customers will jump on the EV bandwagon at some point.

Kallenius added: "As long as you give the customer a superior product to what they had before, they're open minded for a switch... The experience for the customer in terms of the torque, the performance, everything is fantastic."

In the immediate future, Mercedes will continue to sell traditional ICE models alongside its new EVs for the next several years. In August, the company began production of its first electric SUV, the EQS, at its facility in Tuscaloosa, Alabama.

Mercedes also teamed up with Rivian to develop two different EV vans for use in Europe. Looking ahead, additional partnerships are possible while the company looks to emerge as a leader in the budding market.