CLA production in Raststatt: Profits at Mercedes-Benz are shrinking again. Photo: Mercedes-Benz AG
Stuttgart, Sindelfingen. The profit of the car manufacturer Mercedes-Benz has fallen by 57 percent. In the past year, the DAX group only achieved 5.82 billion euros before interest and taxes (EBIT), as the Swabians announced on Thursday.
In the already weak year 2024 it was 13.59 billion euros – after around 20 billion in the previous years. Mercedes last achieved less surplus in 2019. At that time, the predecessor company Daimler had a profit of 1.64 billion euros from the sale of cars and vans.
Sales also shrank by nine percent to 145.59 billion euros in 2025 compared to the previous year. In the dominant car division, Mercedes only achieved a margin of five percent adjusted for special effects. That was within expectations of four to six percent. However, a year earlier the value was 8.1 percent, and in 2023 it was even 12.6 percent.
Mercedes is in crisis – 140 years after Carl Benz registered the patent for a “vehicle powered by a gas engine”. This is due to difficult conditions: In China, the largest car market, the luxury customers important to Mercedes are buying fewer vehicles, in the USA punitive tariffs are reducing returns and in Europe the economy is slowing demand for cars.
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However, management errors also have an impact: Mercedes boss Ola Källenius focused on purely electric cars too early. He canceled his plan to have the entire new car fleet electrified by the end of the decade two years ago. Previous combustion engine models now have to be extensively upgraded, which is costing the company a lot of money. Källenius’ luxury strategy, i.e. the focus on luxurious luxury vehicles, also failed due to market realities.
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“In a dynamic market environment, our financial results were in line with our forecast,” said CEO Källenius. The manager wants to counteract this with a model offensive. Between 2025 and 2027, the group will bring several dozen new and revised vehicles onto the market and thus also wants to significantly expand its range of electric vehicles. Management expects that these effects will not be noticeable on the balance sheet until 2027.
It takes several months until production ramps up and the vehicles are on the roads. At the same time, customers are likely to have less demand for the models that are being phased out, which will initially further depress sales and profits. This year, Mercedes is only expecting sales to be at the same level as last year. Management predicts that profits are likely to increase significantly. The return on investment from the car business should only be between three and five percent.