Mercedes-Benz sees BEV sales and revenue increase in Q2

Mercedes-Benz Group AG reported on Wednesday good Q2 results due to ‘strong demand and a favorable model mix’. That reads like more high-margin cars sold in their ‘core luxury segment’, despite an overall sales decrease of 7%. The latter is caused by uncertainties like the Ukraine war, growing inflation, and shortages of semiconductors.

With EQE sales started and EQS SUV production ramped up, the German carmaker saw its BEV sales (including Smart) grow by +51%, from 20 700 in Q2 2021 to 31 300 in Q2 2022. Year-to-date, Mercedes-Benz sold 58 600 battery-electric cars (+50%) and 137 600 partly ‘electrified’ so-called xEVs.

Lower sales and higher material costs

“Group revenue rose by 7% to €36,4 billion (Q2 2021: €34,1 billion) and adjusted EBIT increased by 8% to €4,9 billion (Q2 2021: €4,6 billion) as the company’s focus on top-end luxury vehicles, battery electric vehicles (BEV), and premium vans as well as a relentless focus on costs, helped to offset lower sales and higher raw material costs,” the press release states.

According to the carmaker, the strategy is on track: “Despite a semiconductor-induced 7% fall in sales, revenue at Mercedes-Benz Cars is up 8% and adjusted EBIT up 20%”.

974 000 cars sold in 2022

In total, Mercedes-Benz Cars sold 487 100 cars in the last quarter. That’s 7% less than the 521 200 in the same period the previous year, which was already marked by difficulties worldwide in semiconductor supply. Over the first six months of 2022, that amounts to 974 100 cars sold, compared to 1 060 100 in the first half of 2021 (-8%). Of them, 196 200 were ‘electrified’ models.

Due to semiconductor and logistical challenges, Mercedes-Benz could not fulfill strong demand, causing unit sales in the top-end luxury segment to decrease slightly to 75 500 vehicles (Q2 2021: 77 900).

What the carmaker calls the ‘Core Luxury vehicles’, sales exceeded those of the prior-year quarter and reached 272 600 vehicles (Q2 2021: 266 200). In the entry-level segment of Mercedes cars, 139 100 vehicles were sold in Q2, compared to 177 100 in Q2 of 2021. In the van business, 188 600 Mercedes-Benz vans were sold in the first six months of 2022, compared to 186 800 the previous year.

New strategy

In May, CEO Ola Källenius presented the new strategy that will affect the lower classes in the range, notably A- and B-Class, where the line-up will be thinned out from seven to four models.

However, he refrained from commenting if this would ultimately mean that those series would reach a dead end but divided the brand into ‘Top End’ (S-Class, G-Class, EQS, and AMG), ‘Core Luxury’ (E- and C-Class) and ‘Entry Level’ (A- and B-Class).

The latest Q2 figures show Mercedes-Benz is slowly moving away from entry-level products to high-end cars with a higher profit margin. Källenius earlier presented targets that by 2026, 60% of the company’s revenue must be generated by sales of top-end vehicles.

Whereas the average retail price in Germany now is 28 000 euros, it must rise to 33 000 euros. “It is not the goal to be a competitor to mass producers,” he added, “That is not what the Mercedes-Benz brand means.”

The precept ‘fewer cars, higher margins’ is pursued by more carmakers, like Renault and its Renaulution plan, to respond in flexibility to the new market conditions.

 

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