Mercedes-Benz Ties Its Climate Story to a Single Aluminium Contract — While the Profit Outlook Slips

Mercedes-Benz has joined the aluminium arm of the First Movers Coalition, committing to source at least 10% of its annual primary aluminium needs under the coalition's criteria by 2030. The pledge rests on a binding offtake agreement with Hydro, giving the carmaker a contractual anchor rather than a statement of intent.

The benchmark embedded in that deal is a carbon footprint of 3.5 kg CO?e/kg for the contracted primary aluminium by 2028, tightening to 3.0 kg CO?e/kg from 2030. That gives investors a dated, verifiable checkpoint — and a clear test of whether Hydro can deliver material to specification and whether Mercedes can put it to use at the promised scale.

The 10% threshold matters because it is large enough to register, yet small enough that progress beyond it will need to come from elsewhere in the supply chain. Broader targets sit further out: a 90% cut in production emissions by 2039 against a 2019 baseline, an 80% reduction in the use phase where market conditions permit, and a 70% reduction across the relevant value-creation stages — all measured against the same long-term horizon.

That caveat on the use phase is the weak link in management's grip on the plan. Contractually secured gains in individual materials could collide with harder conditions elsewhere, leaving the overall strategy lagging the pace of single procurement projects. The economics of a long-term offtake also depend on whether material properties, security of supply and cost all line up; operational progress only becomes persuasive for shareholders once it is matched by viable financial results.

A Charging Handover Fits the Same Pattern

The picture extends beyond raw materials. Roughly a week ago Mercedes transferred its European fast-charging parks to Electra, with Mercedes customers receiving access to the Electra network through MB.CHARGE Public in return. The division of labour works for customers only if the agreed access holds up and the partnership delivers reliably.

Product Range Widens as the Share Price Dips

On the vehicle side, Mercedes has expanded the electric VLE line-up, adding new entry-level and equipment variants plus an all-wheel-drive version, all now orderable. The VLE 400 4MATIC is quoted at 310 kW with up to 654 kilometres of WLTP range, and the company has broadened personalisation options for the model.

The stock fell 1.3% today.

Jefferies Flags a Model That Needs Rebuilding

Analyst Philippe Houchois pointed to the need for a fundamental renewal of the business model. He also criticised a liquidity profile that barely differentiates the company any more, and a lack of clarity over a possible new share buyback.

Those concerns land against a lowered guidance framework. For Mercedes-Benz Cars, the group now expects an adjusted return on sales of 2% to 3% in 2026, down from a previously guided 3% to 5%. Group EBIT is projected to come in at the prior-year level rather than above it. Management cited a more demanding environment in China and higher costs in the fourth quarter, among other factors.

The most recent quarter offers the reference point: revenue of EUR 30.7 billion in Q3 2026, EBIT of EUR 1.77 billion and net profit of EUR 1.52 billion, with Mercedes-Benz Cars delivering around 407,000 vehicles in the period.

What Investors Should Watch Next

The first hard operational marker is the 2028 reduction in the aluminium footprint, followed by the deeper cut and the First Movers Coalition sourcing target. Those milestones give shareholders a sequence to grade management against. The case for the equity rests on execution that pairs environmental progress with economic viability; the case against pricing in success early rests on dependence on actual deliveries — of metal, and of cars — and on conditions across the rest of the business.