German luxury car maker Mercedes-Benz today announced that arnings in 2025 will be “significantly below the previous year’s level”, due to the “challenging” market environment.
It comes as the automobile giant is trying to tries to ride out the shift to electric cars, and warned that profits will fall this year.
The luxury carmaker saw a 30% slump in earnings in 2024, and 40% in its cars division. This year, it expects its earnings to fall even further, expecting a rate of return in its car division of just 6-8%.
The company said it will release 19 new combustion engine models and 17 battery-electric cars by the end of 2027. Analysts suggest this indicates Mercedes is betting on its combustion engine offering after its battery-electric sales collapsed by a quarter last year.
It said: “Material costs will be tackled in close collaboration with suppliers and fixed-cost reductions will continue through to 2027, building on significant progress achieved over the past four years.”
“The strategy of value over volume remains in place – it has not been abandoned,” CFO Harald Wilhelm said, adding it was good news for its margin that combustion engine cars were still far outselling electric vehicles.
