Mercedes-Benz Stock Faces Shareholder Scrutiny Amid Market Divergence

Mercedes-Benz faces shareholder vote on dividends as China sales plunge 27%. The automaker launches a new 700km-range electric VLE while analysts remain skeptical.

Mercedes-Benz Group AG enters a pivotal week with its Annual General Meeting on Thursday, as shareholders prepare to vote on a contentious dividend proposal. This vote comes against a backdrop of sharply contrasting regional performance, where booming luxury SUV demand in some markets is failing to offset a dramatic collapse in China.

The automaker's first-quarter 2026 sales figures reveal a stark geographic split. Global deliveries fell 6% year-on-year to 499,700 vehicles. While the US market saw a 20% increase and Europe grew by 7%, the crucial Chinese market plummeted 27% to approximately 111,600 units. The company attributes the severe drop to outgoing model cycles, with successors due in the coming months, but analysts question whether this will be enough to regain lost ground against fierce local competition.

A New Electric Chapter Amid Challenges

Even as it navigates these headwinds, Mercedes-Benz is pressing forward with its electric vehicle offensive. The company has announced the start of order-taking in April 2026 for its new all-electric VLE, a model it aims to position as a "Grand Limousine." Based on a newly developed, modular van architecture, the VLE combines the comfort of a classic sedan with the spaciousness of a van.

The vehicle will feature an 800-volt architecture, enabling charging at over 300 kW. Equipped with a 115-kWh battery, it promises a WLTP range of 700 kilometers, with the ability to add 355 kilometers of range in just 15 minutes. Pricing will start at around €79,000 for the VLE 300, with the VLE 400 4MATIC following in the autumn from €94,000. A fully-equipped Exclusive Line trim with a rear-seat cinema screen will approach €134,000. Initial deliveries from the Vitoria plant in Spain are scheduled for summer 2026.

Shareholder Pressure and Analyst Skepticism

The planned dividend payout has drawn criticism from environmental and shareholder advocacy groups, including BUND and the umbrella organization of Critical Shareholders. They argue the proposed distribution is too high given falling sales and an ongoing cost-saving program, and that capital should instead be redirected toward the company's transformation. Mercedes-Benz management, however, is standing by its dividend proposal.

Analyst sentiment provides little comfort. ODDO BHF lowered its price target on April 14 from €43 to €42, maintaining an "Underperform" rating. RBC analyst Tom Narayan reiterated a "Sector Perform" rating with a €56 target following a management call, explicitly citing the challenges in China.

The stock, trading at €54.68, reflects the uncertain climate, having declined 11.31% since the start of the year. It currently trades below both the 50-day moving average of €55.65 and the 200-day line at €55.89. A share buyback program with a remaining volume of €1.7 billion provides some support. Since November 2025, the company has already repurchased over 13.6 million of its own shares.

Operational highlights from Q1 include the new electric GLC recording the highest order intake for any electric vehicle in the company's history. Top-End vehicles like the G-Class and Mercedes-Maybach also posted double-digit growth. The company will release its detailed quarterly financials on April 29.