[cRiPpLe_rOoStEr]

Originally Posted by GreenTDI

It's true that cars with ICE are also becoming more expensive due to improvements of all kinds (& to meet the requirements for cleaner emissions).

Sometimes it seems to be more due to the emissions requirements than to actual improvements. Most automakers have been quite slow to adopt some breakthrough technologies that could increase the benefits to the combustion process. Just look at how long it took for Koenigsegg to release its camless engine, and don't hold your breath for it to become so widespread as major automakers might not want to pay royalties for a tech they would need to outsource.

The smallest/cheapest car models are gradually being removed from the range because they are no longer profitable for manufacturers.

I am noticing a shrinking to the overlap of econoboxes within some brands which had different models catering to similar customer profiles, while others are offering fewer engine variations for their newer generations of small cars.

And that EVs are gradually becoming cheaper (due to larger production numbers and lower production cost of the batteries) is also a fact. The smallest segment may benefit from this: assuming that small cars are used for short distances and city miles: where an electric motor is very efficient.

Even though it may not remain the same in Europe, in other markets such as Latin America a compact might be the only car available at a household, so it may not really be suitable to a total electrification as they may still need to be a jack-of-all-trades instead of becoming too specialized.

I therefore see that electrification will mainly happen with smaller cars in the near future. But big family/luxury cars (like that Mercedes in te opening post) can benefit from a fuel engine because these cars are often used for long/highway distances. Off course in combination with plug-in electric motor.

Even for smaller cars it may be possible to retain the ICE for longer, as they may also benefit from other circumstances such as eventual improvements in manufacturing and technology. A small motorcycle engine would already be suitable to operate at least as a range-extender for an EV, and actually some twin-cylinder motorcycle engines in the 400 to 500cc range could even move quite comfortably a small car fitted with a 3-cyl 1.0L gasser.