Dramatic drop for Mercedes EV sales last year, spurring cost reductions

German luxury automaker Mercedes-Benz saw a slight dip in global sales and a big one in electric vehicle demand in 2024. The decline is primarily attributed to weaker demand in key regions like China, the automaker’s largest single market, and a sharp slump in European battery-electric vehicle sales. As for 2025, the car manufacturer hardly projects any improvement.

Mercedes saw its global passenger car sales drop by 3% in 2024, with 1,983,400 vehicles sold, down from 2023. China, which accounts for a significant share of Mercedes-Benz’s sales, posted a 7% decline in 2024, reflecting the broader slowdown in the world’s largest car market.

In Europe, sales fell 3%, with the automaker’s home market of Germany taking a more pronounced hit of 9%. Meanwhile, the US provided a rare uptick, with sales rising 8% to 324,500 units, showcasing the brand’s continued strength in North America.

Weak LCV and BEV sales

Combined car and van sales declined by 4%, totaling 2,389,000 units for the year. Van sales were particularly weak, dropping 9% globally to 405,000 units, including a steep 34% decline in the US. Another black spot for Mercedes is electric car sales, which fell by 23% to 185,100 vehicles.

This falloff is especially concerning in Europe, given the region’s increasingly stringent CO2 emissions targets. European Commissioner for Climate Wopke Hoekstra reiterated the 2025 targets for CO2 emission imposed on automotive OEMs, not yielding to the mounting pressure to lend the sector some slack.

However, Mercedes has a plan B for the possible penalties involved. To meet regulatory requirements, it has filed to pool its emissions credits with Volvo and its EV-focused subsidiary, Polestar, which have surplus credits to trade in.

Software problems?

The decline in BEV sales comes despite the company’s investment in models like the EQE and facelifted EQS, which have struggled to gain traction in key markets. CEO Ola Källenius has acknowledged the challenge, pinning hopes on upcoming models like the all-electric CLA, which promises a 750-kilometer range and faster charging times.

However, the CLA could face its own set of problems. Building upon the carmaker’s first propriety software system, Chinese media outlet 36kr reported a launch delay for the locally built long-wheelbase version. A spokesperson from Mercedes’ head office, aware of the reports, denied the postponement to Newmobility.news at the Brussels Motor Show.

High-end models underperform

Sales of Mercedes’ top-end models, including AMG, Maybach, G-Class, S-Class, and EQS, fell 14% (but showed a 34% increase quarter-on-quarter during the year’s end). The drop, driven by weaker Chinese demand, threatens the automaker’s strategy of pushing upmarket to sell more high-margin luxury vehicles.

Core models, such as the E-Class and C-Class, saw a 6% sales increase, while entry-level models like the A-Class and B-Class declined by 14%. The latter reflects Mercedes’ ongoing strategy to streamline its lineup by reducing the number of lower-priced offerings.

According to Reuters, Mercedes will adjust its midterm profitability targets due to a projected turnaround in 2025. There’s also a cost-cutting program in the making, which started in October last year over “unacceptable” Q3 results. The carmaker has seen its margins shrink from around 15% to under 5% last year.