Mercedes-Benz Faces a Two-Front Autumn: Record EV Backlog at Home, a 31% China Slide Abroad

Mercedes-Benz Q3 2026: electric models sold out in Europe, but China deliveries fell 31% and analysts trimmed price targets.

With just days to go before Mercedes-Benz opens its books on the third quarter of 2026, the Stuttgart automaker finds itself pulled in opposite directions. Demand for its electric models in Europe is running so hot that order books are effectively closed well into next year, yet a deepening slump in China and thinning margins in its most profitable vehicle classes are weighing heavily on the share price.

The stock finished Friday at EUR 39.73, leaving it a mere 2.1% above its 52-week low of EUR 38.90 — a gap that tells its own story about how investors are reading the company's prospects.

Two Halves of the Same Quarter

The operational picture for the July-to-September period was sharply split. Mercedes-Benz handed over 491,700 passenger cars and vans in total, with fully electric passenger vehicles climbing 61% year on year. In Europe, that momentum has translated into sold-out status: the electric CLA family, along with the GLC, GLB and GLA, is spoken for through the remainder of 2026, and incoming orders stretch deep into 2027. The company also cleared its Steer-by-Wire system for the electric EQS sedan, adding a further technological string to its bow.

Asia told a different story. Passenger car sales in China tumbled 31% to 86,800 units during the quarter, according to media reports. The pain is sharpest where it hurts most — deliveries in the Top-End segment, the high-margin flagship models that traditionally carry the largest share of operating profit, fell 21% to 53,900 vehicles. Group-wide passenger car sales were down 8% over the quarter, while battery-electric deliveries across the group rose 52%, a gain that only partly cushions the Asian shortfall.

Analysts Trim Targets as Competition Bites

Market watchers spent the tail end of last week recalibrating their models. UBS cut its price target to EUR 45 from EUR 50 while keeping a "Neutral" rating, with analyst Patrick Hummel pointing to mounting competitive pressure from Chinese rivals ahead of the European auto sector's earnings season. HSBC trimmed its own target from EUR 63 to EUR 61 but stayed bullish with a Buy recommendation. Citi moved to EUR 42, citing rising margin pressure and operational risks for the second half of 2026. The spread of opinions — from EUR 42 to EUR 61 — lays bare how uncertain the sector's medium-term profitability has become. At a market capitalization of EUR 37.20 billion, Mercedes-Benz Group's valuation reflects those industry-wide worries.

Workers Push Back Against Plant Closures

The pressure is not only external. On Friday, works council chief Ergun Lümali came out firmly against any debate over factory closures, urging management to concentrate on innovation, future-proof products and viable market strategies rather than pushing ahead with discussions about job cuts. His intervention highlights the growing tension inside the company, where the board must respond to weakening demand while the prospect of restructuring unsettles the workforce.

What to Watch on October 28

All eyes now turn to October 28, when Mercedes-Benz publishes its full interim report for the third quarter of 2026. The analyst call that follows should reveal how management intends to offset the margin erosion in China and what financial toll the model-changeover cycle will take. Before the hard numbers land, the company wraps up its S-Class world tour on October 18 with a public open day at the Mercedes-Benz Museum — a final piece of showmanship before the business figures set the tone for the capital markets.