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Mercedes-Benz stated in an earnings replace on Wednesday that its web revenue had plummeted from €6.1 billion to €2.7 billion within the first half of 2025, a 56% year-on-year drop.
It added that, within the second quarter alone, web revenue dropped by a good higher 69%, whereas income was down 10% year-on-year. EBIT (earnings earlier than curiosity and taxes) and earnings per share have each fallen by a staggering 68%.
Whereas income have been dented by one-off prices linked to the agency’s “Subsequent Degree Efficiency” cost-cutting plan, Mercedes can be contending with larger tariffs imposed by the US administration.
Amid commerce uncertainty sparked by President Donald Trump, the German carmaking powerhouse predicted that US tariffs would knock €360 million off its backside line, with the corporate predicting 2025 gross sales effectively beneath final yr’s whole.
One other drawback for Mercedes is slumping quarterly gross sales in China — usually Mercedes’ largest market. This whole fell by practically 20 % year-on-year as home electrical automotive manufacturers acquired cheaper and extra fashionable.
To melt the hit, Mercedes plans to lean even more durable on its high finish fashions and hold prices tight. In different phrases, it hopes that larger margins on luxurious autos will offset the smaller variety of automobiles it expects to promote.
“Mercedes-Benz Group now sees Group income considerably beneath the prior-year stage based mostly on decrease gross sales anticipated at Mercedes-Benz Vehicles and Mercedes-Benz Vans,” the corporate stated in a press release.
Trump tariffs
For many of this yr, European-made automobiles have been imported into the US at a tariff of 27.5%, however after the newest deal struck between European Fee President Ursula von der Leyen and US President Donald Trump, they are going to be imported at 15% beginning on Friday.
Europe’s vehicle sector immediately and not directly employs a whopping 13.8 million individuals, offering one in each 16 EU jobs. This makes it the spine for a big share of family incomes throughout the bloc, particularly within the areas the place auto manufacturing hubs are positioned.
Mercedes-Benz CEO Ola Källenius stated the agency must navigate the altered political atmosphere within the close to future by promoting extra luxurious automobiles and investing in innovation.
“We’re adapting to new geopolitical realities by utilizing our international manufacturing footprint intelligently and by executing our Subsequent Degree Efficiency programme, which works past effectivity measures, to extend the resilience of our firm,” CEO Ola Källenius stated in a press release.
A brand new technique for Mercedes
Particularly, the mid-year report highlighted the pivot to analysis and growth (R&D) to create new merchandise and applied sciences.
Carmakers pour about €73 billion yearly into R&D, greater than another non-public sector in Europe. Their breakthroughs then usually spill into different sectors, similar to batteries, robotics and AI.
“One of the best response is to remain heading in the right direction to ship fascinating and clever merchandise, whereas holding a decent grip on prices,” Källenius continued.
Mercedes automobiles have a robust model id and loyalty amongst customers who have been drawn to their strong engines and high-end, glossy designs, citing reliability and sturdiness.
The corporate is a top-five participant within the international carmaker rating by way of income, together with two different German firms, Volkswagen and BMW. Within the luxurious market, it ranks second globally behind BMW.
Motor-vehicle possession taxes alone inject roughly €428bn a yr into EU treasuries, a income stream that’s vital for public providers and bigger than your entire annual EU funds.