Mercedes-Benz Rolls Out Hands-Free Steering Tech While Washington and Wall Street Apply the Brakes

Mercedes opens global orders for steer-by-wire on the EQS, a first for a German automaker, as Citi trims its price target to EUR 42.

Mercedes-Benz has begun taking orders worldwide for a steer-by-wire system in its electric EQS flagship, positioning itself as the first German automaker to bring a production car to market without a mechanical link between the steering wheel and the front axle. The optional feature carries a sticker price of EUR 2,500 before VAT, or EUR 2,975 including it, in Germany.

The setup transmits steering commands purely electronically, and the company says just 170 degrees of rotation between lock-to-lock is enough to make city maneuvering easier. Redundant signal paths safeguard vehicle control, and should the electronics fail outright, a rear-axle steering unit capable of up to 10 degrees of angle, combined with wheel-specific braking interventions from the stability program, can help keep the car on its intended line.

A Flagship Rebuilt From the Ground Up

The steering innovation sits atop a broader overhaul of the Stuttgart group's flagship. More than a quarter of all vehicle components were redesigned for the facelift, according to company figures. Alongside steer-by-wire, the EQS now features an 800-volt architecture, in-house drive units with a two-speed gearbox on the rear axle, larger batteries and the group's own MB.OS operating system.

The engineering push lands during a testing stretch for Mercedes' electric offensive. Beyond the model refresh, the board around CEO Ola Källenius is demanding more pace internally: starting in January, employees are to return to the office four days a week to sharpen collaboration and efficiency. Roughly a week ago, the company also announced a fresh voluntary severance program that will, for the first time in December, extend to senior executives as well.

Washington Weighs a Chinese-Ownership Threshold

Geopolitics is adding a second front. Negotiations are underway in the US Congress over legislation that could restrict market access for vehicles with significant Chinese corporate ownership. Under the draft currently on the table, the trigger would be a Chinese stake of more than 15 percent. Reuters recently put the passive Chinese holding in Mercedes-Benz at just under 20 percent, a level that would potentially bring the carmaker within the scope of the rule.

US Senator Bernie Moreno has said the political talks are aimed at ensuring Mercedes-Benz is not shut out of the US market by the new regulation.

Citi Trims Its Target as Margins Come Under Fire

On the earnings side, expectations for the current financial year are clouding over. Analysts at Citi cut their price target for the stock yesterday to EUR 42 from EUR 51, citing more muted prospects for the passenger-car segment. For full-year 2026, the bank projects an adjusted operating margin (EBIT) in the car division of below 3.0 percent, and it expects only a weaker recovery in 2027.

The shares changed hands at EUR 40.51 today, after closing at EUR 40.31 the previous session. Since the start of the year, the stock is down 33 percent at current levels.

Cost Levers and Supplier Ties

Management is pulling internal levers to bring its cost base in line with the shifting landscape. The voluntary severance package for German employees, relaunched just over a week ago, is expected to get underway in December across indirect functions and is aimed at collectively bargained staff as well as parts of the leadership team, operating on the principle of double voluntariness. On the operational front, Mercedes-Benz is meanwhile leaning on established supplier relationships: on October 1 it extended its strategic partnership with lubricant maker FUCHS SE to pursue joint projects in innovation and sustainability.

Investors will get a clearer read on the past few months in a matter of weeks. The automaker has scheduled its interim report for the third quarter for October 28. In the second quarter of 2026, group revenue fell 3.29 percent year on year to EUR 32.06 billion, while earnings per share rose to EUR 1.14 from EUR 0.95. The upcoming figures should show just how hard margin pressure is biting in the luxury segment.