Mercedes-Benz on Thursday said its earnings by 2025 are more than halved from a massive $1.2 billion hit related to President Trump’s tariffs – and warned that more challenges lie ahead.
The German luxury car company’s full-year profit was 5.8 billion euros, or about $6.9 billion — a drop of about 57% from 2024. It fell well short of Wall Street’s expectations of $7.8 billion.
Mercedes blamed the negative results on Trump’s high car spending and intense competition from foreign rivals, especially Chinese automakers.
The premium automaker said it is planning cost-cutting measures in 2026, and aims to introduce more new cars in its goal of releasing 40 new models over a three-year period.
“In the midst of a volatile market situation, our financial results remained within our guidance, thanks to our sharp focus on efficiency, speed, and flexibility. Now we are all ready for 2026,” said Ola Kaellenius, CEO of Mercedes-Benz Group AG, in a statement on Thursday.
Mercedes is one of Europe’s auto giants facing a complex web of problems, including supply chain problems, rising production costs, tax pressures and the costly withdrawal of electric car ambitions.
The company is targeting a 3% to 5% return on car sales by 2026 – down from the 5% it recorded last year.
It expects revenue to remain around $157 billion in 2025, while it expects group earnings before interest and taxes to be “significantly above” last year.
Most foreign automakers reported a big hit to earnings in 2025 due to higher costs after the Trump administration slapped tariffs of up to 25% on imported cars and auto parts.
Ford’s tax bill last year was about $2 billion, and it said it expects to be charged the same this year.
General Motors — which reported a $3.1 billion tax hit in 2025 — expects another $3 billion to four billion in 2026, as it works to ramp up U.S. auto production.
Nissan has also ramped up its domestic production plans, but still expects to earn about $2 billion in revenue by 2026.
Many of these automakers have scaled back their production of electric vehicles, to prioritize US production and respond to reduced demand after Trump issued a $7,500 EV tax credit.
Mercedes-Benz of America has suddenly brought back its electric cars in the US after pulling most of the line off the market last summer, according to a January report by Autoblog.
Auto giants such as Stellantis, Ford and General Motors disclosed billions of dollars in lawsuits related to the early withdrawal of electric vehicle plans at $26.5 billion, $19.5 billion and $7.6 billion, respectively.
