Mercedes-Benz Balances Record EV Demand Against a 31% China Collapse

Mercedes-Benz EV deliveries hit a quarterly record, but an 8% drop in car sales and China weakness pushed shares down 2.1%.

Mercedes-Benz is navigating a sharply divided market. While its battery-electric lineup is selling faster than ever, the broader sales picture and mounting profitability concerns are weighing on the stock, which slipped again on Thursday as investors digested a mixed third-quarter delivery report.

The Stuttgart automaker's shares fell 2.1% to EUR 39.05, down from Wednesday's close of EUR 39.90, dragged lower by a weak session across the DAX auto sector. Elevated oil prices and rising bond yields added to the pressure. The decline extends a difficult stretch for the equity, which has now lost 35% since the start of the year.

Electric Orders Stretch Into 2027

The clearest bright spot in Wednesday's delivery update came from the electric side of the business. Mercedes-Benz Cars delivered a quarterly record of 68,400 battery-electric passenger vehicles, a 61% jump year-over-year. Group-wide, fully electric car and van shipments climbed 52% to 78,100 units.

Demand for the electric CLA, GLC, GLB and GLA is running hot enough that the company reported full capacity utilization in Europe for the remainder of 2026, with order intake already reaching into 2027.

That momentum stands in stark contrast to the overall sales trend. Worldwide, Mercedes-Benz moved 491,700 cars and vans in the third quarter, a 6% decline from the same period a year earlier. The core Mercedes-Benz Cars division fared worse, with global deliveries down 8% to 407,200 vehicles.

China Remains the Central Problem

The single largest drag was China, where passenger-car sales for the core brand tumbled 31% to 86,800 units. The company pointed to a difficult market environment in the region, a headwind that has become a recurring theme for European premium automakers.

Analysts are growing more cautious on the earnings implications. Citigroup cut its price target on the stock Tuesday from EUR 51 to EUR 42 while keeping a Neutral rating, citing rising profit risks across European manufacturers. The bank flagged the possibility that the car division's operating margin could fall below 3.0%. A shifting model mix, aggressive price competition and higher raw material costs were named as the key pressures.

Cost Cuts and Buybacks as Levers

With profitability under scrutiny, internal spending has moved to the center of the company's response. WirtschaftsWoche reported, citing people familiar with the matter, that Mercedes-Benz plans to trim German labor costs by EUR 800 million, potentially through adjustments to bonus payments or longer working hours. The automaker declined to confirm the figure, saying only that discussions are ongoing.

Alongside the cost measures, management continues to deploy capital to support the share price. Mercedes-Benz disclosed the repurchase of 875,000 of its own shares between September 28 and October 2, a transaction valued at EUR 35,637,298.00.

The market will get a fuller picture of the company's financial health on October 28, when Mercedes-Benz publishes its complete third-quarter interim report and hosts the accompanying analyst call. That update should clarify how much of the electric-vehicle momentum can offset the persistent weakness in conventional vehicle sales.