Mercedes-Benz Wagers on Wayve AI and Buybacks While Sindelfingen Cost Crisis Looms

Mercedes-Benz locks in a binding Wayve deal for end-to-end driving AI, while buybacks reach 2,081,805 shares and Sindelfingen plants face risk.

Mercedes-Benz has locked in a binding production agreement with British software developer Wayve, a deal that will see the startup's end-to-end driving AI embedded in series vehicles from the Stuttgart premium manufacturer within two years. CTO Jörg Burzer called it the world's first integration of this kind of end-to-end driving intelligence in the premium segment. The technology targets advanced driver-assistance functions capable of point-to-point journeys through complex urban traffic and on highways without high-resolution maps, and it will be built directly into the company's own MB.OS operating system and vehicle hardware. The tie-up builds on an earlier financial stake the automaker took in the British firm. Neither specific model lines nor a regional market-launch timetable have been disclosed.

Buyback Rolls On as Management Takes the Stage

While engineers push ahead on autonomy, the finance team is busy supporting the share price through a buyback program that began on September 1. As of the trading week from September 14 to 18, Mercedes-Benz had repurchased an additional 475,000 of its own shares on the open market, lifting the total since launch to 2,081,805 papers. Under the program, which runs until April 6, 2027, the group intends to buy back up to 58 million shares for a maximum of one billion euros, with all repurchased stock subsequently cancelled in full. Reducing the number of shares in circulation mechanically lifts earnings per share. Management was due to present at the Goldman Sachs German Corporate Conference in Munich on Wednesday.

Sindelfingen Warning: Two Plants at Risk

The technology offensive lands against a backdrop of mounting structural strain at home. At the Sindelfingen plant, production chief Michael Schiebe warned the workforce about the consequences of manufacturing costs in Germany that are not internationally competitive. The chief culprit is high domestic labor costs. Without an effective savings program, the closure of an assembly plant and a powertrain plant looms — even though the official goal remains preserving all German sites. Through the internal efficiency drive "Next Level Performance," management is targeting annual savings of roughly 5 billion euros. The works council has already pledged fierce resistance to any site closures, while parallel collective-bargaining disputes in Germany's metals and electrical industry are adding to the pressure on leadership.

Fresh Product Offensive in the Compact Segment

Operationally, Mercedes-Benz is counting on new products in the compact class. On September 17, series production of the new GLA began at the Rastatt plant on a digitally networked, flexible production line. Fully electric variants are already being built there, with 48-volt hybrid versions to follow before the end of the year.

Analysts Stay Cautious

Market skepticism was on display on September 17 at private bank Berenberg, where analyst Romain Gourvil cut his price target for Mercedes-Benz from 56 to 52 euros and reaffirmed a "Hold" rating, citing a lack of positive momentum for further business development.

Shares Hug Their Yearly Low

The equity continues to reflect the mix of innovation spending and restructuring needs. Mercedes-Benz stock fell 2.9 percent on the day to 42.44 euros, hovering just above its 52-week low of 42.42 euros, and is down 30 percent since the start of the year. The prior session's close was 43.70 euros, a decline of 28 percent year-to-date and just 2.5 percent above the previous annual low.

Commercial Vehicles Outperform Passenger Cars

Operating segments present a mixed picture. In the commercial-vehicle business, the group posted an adjusted revenue margin of 10.2 percent in the second quarter of 2026, outpacing the passenger-car margin. The share of fully electric vans grew 46 percent in that quarter. At group level, second-quarter revenue came in at 32.06 billion euros with earnings per share of 1.14 euros. Market participants will get clarity on the current quarter's financial trajectory next month, when Mercedes-Benz publishes its interim report for the third quarter of 2026 on October 28.