Mercedes-Benz Trims U.S. Electric Line-Up While Betting on Paris Debuts and Battery Deals

Mercedes-Benz will pull the EQE sedan and Maybach EQS SUV from the U.S. for 2027, as LG Energy Solution is reported to supply new cylindrical cells from 2028.

Mercedes-Benz is quietly reshaping its electric-vehicle playbook on two fronts at once. While the Stuttgart carmaker prepares a high-profile product offensive at the Paris Motor Show, it is simultaneously pulling two slow-selling battery models from the U.S. market — a reminder of how uneven the global EV roll-out has become.

For the 2027 model year, the EQE sedan and the ultra-luxury Maybach EQS SUV will disappear from American showrooms. The decision reflects soft demand for high-end battery-electric vehicles in North America, compounded by persistent sales weakness in China and internal pressure to cut costs. The move amounts to a strategic recalibration in a key market where the EV ramp-up has visibly lost momentum, and it lands as premium electric offerings face mounting competition worldwide while conventional model lines continue to underpin the company's operating base.

Battery Supply Deals Point to the Next Generation

Even as it prunes its current electric portfolio, Mercedes is laying groundwork for future models. According to media reports, South Korea's LG Energy Solution is set to supply the carmaker with a new type of cylindrical cell, with deliveries for upcoming vehicles expected to begin in 2028. Production lines are reportedly planned at LG's plant in Wroc?aw, Poland, where module assembly is also under consideration. No official confirmation of the arrangement has been issued yet.

The tie-up builds on existing relationships: the two companies had already agreed several long-term battery-cell supply contracts, and Mercedes also holds a comparable supply deal with Samsung SDI.

A Rich Dividend — and a Wary Market

Uncertainty over the pace of future growth continues to weigh on the stock's valuation. Stuart Rhodes, a fund manager at M&G Global Dividend, pointed to a price-to-earnings ratio of roughly seven times earnings and a calculated dividend yield of about eight percent. Rhodes cautioned, however, that a high payout yield alone is not sufficient reason to buy if growth momentum is missing.

For shareholders, the picture remains demanding. The balancing act between heavy upfront investment in new cell technology and sluggish demand for pure electric cars is visibly dampening sentiment.

On the trading floor, the shares have yet to find firm footing. The stock closed Friday at EUR 39.90, down 34 percent since the start of the year, leaving it just 0.5 percent above its 52-week low.

Paris as the Next Proving Ground

The autumn calendar now hands Mercedes a decisive test. At the Paris Motor Show, running from October 12 to 18, the company has announced a slate of premieres: the new GLA, the Mercedes-AMG CLA 45, a revised GLE, the four-door Mercedes-AMG GT Coupé and the fully electric VLE people carrier.

Those unveilings carry extra urgency given the pressure on the share price, which sits only marginally above its recent trough of EUR 39.70. The new models must demonstrate that Stuttgart's product strategy still works in a changed market, particularly in the premium and electric segments where rivals are pressing hard and customer demand is cooling in key regions. For investors, Paris is about more than a product showcase — it is a test of whether the new line-up can command enough pricing power to steady the passenger-car division's earnings.

Cost Battle at Home Adds to the Pressure

The central question for profitability revolves around the structural costs of domestic production. According to a Reuters report, the group has for the first time officially raised the prospect of closing a German assembly plant and a powertrain facility should expenses not come down, citing significant cost disadvantages at German sites. Labor representatives have already signaled resistance to such cuts.

The standoff captures management's dilemma: high energy and personnel costs are squeezing margins on one side, while hard restructuring measures risk protracted conflict with the workforce on the other. Deutsche Bank Research had earlier trimmed its price target for Mercedes-Benz, flagging China as the biggest structural challenge while keeping its "Buy" rating. The combination of tough negotiations at home and difficult selling conditions in Asia forms the key lever for future earnings.

Institutional Support and Buybacks

Should the Paris premieres generate fresh momentum, it could mark the start of an operational recovery. The optimistic case rests on a revival of the higher-margin segment: sporty derivatives such as the Mercedes-AMG GT four-door Coupé and volume models like the GLA address broad customer groups, while the electric VLE is meant to drive the transformation in the van business.

Institutional backing is also visible. BlackRock, the world's largest asset manager, reported on September 25 that its attributable voting rights in Mercedes-Benz Group AG had risen to 6.04 percent in total, after crossing the reporting threshold on September 22. The company is also continuing its share buyback program, repurchasing a further 895,000 of its own shares between September 21 and 25. Such moves tighten the supply of freely traded stock and signal confidence in the company's intrinsic value.

Risks That Could Widen the Downside

Set against the recovery scenario are tangible risks. Should talks over the future of the German plants escalate, production interruptions and substantial additional costs for transitional arrangements could follow. An open conflict with the workforce would hit the group at a moment when operational flexibility is urgently needed.

Conditions in international markets remain fragile as well. If the hoped-for demand boost from the new model lines fails to materialize and sales in Asia stay weak, margin targets will wobble further. Tim Rokossa, an analyst at Deutsche Bank Research, has already noted that the upcoming third-quarter reporting season is unlikely to shift the subdued sector narrative. Without a turnaround in sales figures, the high fixed costs of the manufacturing network threaten to weigh on profitability on a lasting basis.

What to Watch

As long as the recent interim low holds, there is scope for a technical rebound after the losses of recent months. But if sentiment deteriorates further and the price falls sustainably below EUR 39.70, the broader downtrend could resume. The direction will be decided largely by the response to the coming dates: Paris opens its doors to trade visitors on October 12, and investors will be watching closely how the GLA, GLE and AMG models are received. Convincing signals on the order book would give the stock fundamental support; disappointing premieres would push the plant-closure debate and margin pressure back to center stage.