Mercedes-Benz Expands Hungary Plant as New 680-HP Electric AMG Debuts, Shares Near Year Low

Mercedes opens €1B Hungary plant to cut costs 70% below Germany and launches 680hp electric AMG CLA 45, but shares drop 28% YTD near 52-week low of €42.64.

Mercedes-Benz is pursuing a two-pronged strategy to defend its margins — rolling out a high-performance electric AMG model while slashing production costs through a massive expansion in Hungary. Yet the market remains unimpressed: the stock closed Monday at €44.13, down 28.4% year-to-date and just 3.5% above its 52-week low of €42.64, hit in late June.

The Stuttgart-based automaker officially opened the enlarged Kecskemét plant on Monday, a facility that has absorbed roughly €1 billion in investment. The site's footprint more than doubled from 200 to 440 hectares, lifting annual capacity to 400,000 vehicles and making it Hungary's largest car factory — and one of the biggest in Mercedes' global network. Assembly has already started on the new electric C-Class, which rolls off the same flexible production line as combustion-engine models. Chief Executive Ola Källenius and Hungarian Prime Minister Péter Magyar attended the inauguration.

The cost advantage is central to the strategy. Finance chief Harald Wilhelm has pegged manufacturing expenses in Hungary at roughly 70% below German levels, giving Mercedes a powerful lever as it aims to double the share of output from low-cost European countries to 30% from the current 15%. That shift comes as the company also scales back domestic production to around 900,000 units. Alongside the C-Class, Kecskemét already builds the A-Class and GLB, and reports indicate a more compact G-Class variant may be added exclusively at the site.

While the factory ramp-up targets structural cost relief, Mercedes-AMG is simultaneously pushing the performance envelope with the new CLA 45 4MATIC+. The model packs three axial-flux motors delivering a combined 500 kW (680 hp), propelling it from 0 to 100 km/h in as little as 2.7 seconds. An 800-volt architecture with a 94-kWh battery supports a WLTP range of over 670 kilometers in the saloon, and ultra-fast charging at up to 330 kW replenishes the battery from 10% to 80% in about 22 minutes. Available as both a saloon and a Shooting Brake, the CLA 45 marks the first application of triple axial-flux motors in the CLA family and underscores Mercedes' effort to transplant its AMG heritage into the electric era.

Despite these product and manufacturing moves, the stock remains under pressure. Over the past seven days, the shares have shed 3.99%, and the monthly decline stands at 10.57%. The 14-day relative strength index sits at 39.7 — not yet in oversold territory — but the stock trades nearly 19% below its 200-day moving average of €54.52. The 52-week high of €62.30, set in December 2025, is now 29% out of reach. Market capitalization stands at €41.94 billion.

The company's cost-cutting push is mirrored by pressures from outside Europe. Chinese automakers such as BYD and Geely continue to increase imports despite EU tariffs, while the share of Western "Made in China" electric vehicles sold in Europe has dropped from 38% in 2024 to 23% in the first quarter of 2026. Mercedes also faces a tightening lithium market: the Fraunhofer Institute forecasts a sixfold jump in European demand for high-purity lithium hydroxide by 2030, prompting the carmaker to secure supply-chain partnerships alongside Porsche. Rock Tech Lithium and BASF are among the names seen benefiting from the trend.

Investors now await second-quarter results, due at the end of July 2026. The numbers will provide the clearest read on whether the dual bet on cost-competitive production in Hungary and high-margin electric performance models is beginning to translate into improved profitability — or whether the stock's slide toward its lows has further to run.