Mercedes-Benz Earnings Plunge 34% Amidst EV Slowdown and Supply Shortages

Mercedes-Benz Earnings Plunge 34% Amidst EV Slowdown and Supply Shortages

Matías Sánchez
2 min read

Mercedes-Benz Reports 34% Drop in Q1 Earnings, Faces Industry Challenges

Mercedes-Benz has recently experienced a significant setback in its Q1 earnings, with a 34% decline amounting to €3.6 billion. This decline can be attributed to various factors including model changes and a decrease in electric vehicle (EV) demand. Consequently, this has also led to a drop in the company's shares by up to 3.5%. Despite the industry-wide EV slowdown and supply shortages, Mercedes has notably maintained higher pricing in comparison to its competitors, particularly Tesla. Moreover, the European Union (EU) is contemplating imposing tariffs of up to 55% on Chinese EVs, while Tesla is actively expanding its presence in China through a partnership with Baidu for the deployment of its Full Self-Driving (FSD) system. Despite the challenges, Mercedes remains hopeful about a potential uplift in sales as the year progresses.

Key Takeaways

  • Mercedes-Benz reported a 34% drop in Q1 earnings to €3.6 billion due to model changes and decreased EV demand.
  • Despite industry-wide EV slump, Mercedes maintains high pricing against competitors, including Tesla.
  • EU considers up to 55% tariffs on Chinese EVs amid global trade tensions; Tesla gains in China with Baidu deal.
  • Mercedes faced a slowdown in EV demand and supply bottlenecks, but aims to defend its pricing strategy.
  • Tesla's China expansion includes a deal with Baidu for FSD system deployment, despite regulatory challenges.


The significant decline of 34% in Mercedes-Benz's Q1 earnings, accounting for €3.6 billion, attributed to model changes and reduced EV demand, may pose substantial downward pressure on the company's stock and overall revenue. Furthermore, the EU's contemplation of imposing a 55% tariff on Chinese EVs may potentially disadvantage Chinese manufacturers and escalate global trade tensions. However, Tesla's strategic expansion in China through its partnership with Baidu for the deployment of the FSD system could provide a significant boost to its market position, despite facing regulatory hurdles. Looking forward, Mercedes' optimism toward sales improvement relies on successful model adjustments and a pricing strategy that acknowledges industry dynamics and the competitive landscape, particularly the presence of Tesla.

Did You Know?

  • Q1 earnings: These refer to a company's earnings for the first quarter (Q1) of a fiscal year, reflecting the profit or loss generated during that period after deducting associated expenses and taxes. Mercedes-Benz reported a 34% drop in Q1 earnings to €3.6 billion.
  • FSD system (Full Self-Driving): FSD is an advanced driver-assistance technology developed by Tesla, offering automated driving capabilities such as lane changes, parking, and the ability to summon the vehicle. Tesla has entered into a partnership with Baidu to deploy the FSD system in China, with the aim of expanding its offerings and strengthening its presence within the Chinese market.
  • Tariffs on Chinese EVs: Tariffs are taxes imposed by a government on imported goods. The EU is contemplating a potential tariff increase of up to 55% on Chinese-made electric vehicles (EVs) amidst the backdrop of global trade tensions. This prospective action could lead to higher vehicle prices and reduced competitiveness of Chinese EV brands in the European market.

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