The premium carmaker has long said it is targeting all-electric sales by 2030 "where markets allow", saying customers will ultimately decide what product they want and pointing to the need for infrastructure to support the transition to electric vehicles (EV).
Europe's EV market had grown significantly in recent years but likely wouldn't be ready for all-electric sales by 2030, Kaellenius said on the sidelines of the Munich show.
"It's not going to be 100% in 2030, obviously... from the whole European market, but probably from the Mercedes side as well," he said.
"We will be ready ... but we will also have tactical flexibility," he said, referring to the ability to produce electric or combustion-engine vehicles on the same production line.
His comments chime with a growing sense of caution among major global carmakers about scaling up EV production and uptake as regulatory targets limiting fossil fuel-emitting cars draw nearer.
BMW (BMWG.DE) CEO Oliver Zipse said at a roundtable on Saturday that the 2026 review date for the EU's 2035 ban on fossil fuel-emitting cars would not have been set if legislators did not expect some delay, though Volkswagen (VOWG_p.DE) CEO Oliver Blume said the company would be ready for the ban.
EV sales in Europe grew nearly 55% in the first seven months of 2023, to about 820,000 vehicles, making up about 13% of all car sales.
But executives have spoken out with growing urgency on barriers to producing and selling EVs on a larger scale at competitive prices, from high electricity costs to the lack of charging infrastructure.
In China, Kaellenius said he expected the transition from combustion engines to EVs in the premium segment, which has not benefited from the same government support as volume car production, to take "many years".
"Step by step, you have to convert the market," he said, adding the current economic slowdown would not impact Mercedes-Benz's strategy in the country in the long term.
