Mercedes-Benz Electric Orders Stretch Into 2027 While China's Slump Punches a Hole in Profits

Mercedes-Benz Q3 deliveries fell 8% on a 31% China drop, while battery-electric sales rose 61% to a record 68,400 cars.

Mercedes-Benz is discovering that a record run in electric vehicles cannot, on its own, offset a collapse in the market that has long bankrolled its richest margins. Shares in the Stuttgart carmaker changed hands at EUR 39.97, down 34% since the start of the year, after a third-quarter delivery report laid bare the widening gap between its western momentum and its Asian troubles.

The stock came under fresh pressure on the day of the release, shedding 2.2% to EUR 39.65 and hovering close to its 52-week low of EUR 38.91. Media coverage of the sales figures was widely cited as the trigger for the move.

A Tale of Two Markets

Worldwide, the passenger-car division moved 407,200 vehicles in the third quarter, an 8% decline from a year earlier. The heaviest damage was concentrated in China, where deliveries tumbled 31%. The country's overall passenger-car market contracted by roughly a fifth, according to Handelsblatt, shrinking the company's sales base well below earlier peaks. A cautious consumer mood is only part of the story — domestic rivals have also sharpened their competitive edge, squeezing western premium brands from below.

The pain reaches furthest into the most expensive tier. The top-end luxury segment posted a global shortfall of just over a fifth, eroding precisely the high-margin business that has traditionally anchored earnings in Asia.

Electric Demand Runs Hot

Against that gloom, battery-electric vehicles are firing on all cylinders. Global sales of pure EVs climbed to a record 68,400 cars in the quarter, up 61% year on year. In Europe, deliveries of battery-powered models jumped 78%, meaning nearly one in three Mercedes passenger cars handed to European customers was fully electric.

Order books reflect that appetite. The new GLC, CLA, GLB and GLA lines are sold out for the remainder of 2026, with reservations stretching into 2027. Outside China, the passenger-car business managed a modest overall gain, propped up by growth in the United States and Europe.

The contrast captures the strategic bind the company is in: demand for its newest electric products is outpacing capacity in key western markets, yet the transformation swallows substantial capital while the loss of lucrative combustion-engine sales in Asia drags on profitability.

Full-Year Picture and the Road Back

For the year to date, global passenger-car volume stands at 1.24 million units, 7% below the same period a year earlier. Management continues to target roughly two million cars a year over the medium term, but does not expect to reach that threshold until late in the decade. A return to that level in 2027 has been ruled out.

Whether cost reductions and the ramp-up of new platforms can offset the persistent weakness in Asia will determine what comes next.

Buyouts, Washington and a Lubricant Deal

Mercedes is also moving on several other fronts. The carmaker said it will likely reintroduce a voluntary severance programme for employees in indirect functions in Germany from December. Individual offers will go to collective-bargaining staff and parts of the management team, while vehicle production is excluded from the measure.

In the United States, a potential reprieve is taking shape. According to Reuters, backers of a bill targeting Chinese vehicles postponed a planned Senate vote until November. Senator Bernie Moreno said the final version of the legislation should not bar Mercedes-Benz from selling in the United States.

On the service side, the group extended its strategic partnership with FUCHS SE, which will continue supplying tailored lubricant solutions for Mercedes' global after-sales network.

The financial fallout from the delivery dip will become clearer shortly. Mercedes-Benz Group AG reports full third-quarter 2026 results on 28 October.