Mercedes-Benz Faces a Crisis: EV Sales Plummet, Layoffs Loom

Mercedes-Benz, once a dominant force in the luxury automotive industry, is facing a harsh reality—its electric vehicle (EV) strategy is unraveling. The numbers from 2024 paint a grim picture, with EV sales plunging by nearly 40% globally. In China, its largest market, the situation is even worse. Meanwhile, BMW is thriving, widening the gap between the two German automakers.

The Numbers Tell the Story

The decline in Mercedes-Benz’s EV sales isn’t just a small dip—it’s a collapse. Consider these figures from 2024 compared to 2023:

• EQB sales fell by 36%
• EQE sales dropped by 39%
• EQS sales (across all body styles) plummeted by a staggering 52%

This isn't speculation; it's hard data. A 52% drop in sales of what should be a flagship electric model is catastrophic.

Meanwhile, BMW has managed to keep its global sales steady, largely because of the perception that its EVs are superior. Consumers seem to believe that BMW’s electric lineup offers better technology, reliability, and value than Mercedes-Benz.

A Desperate Attempt to Recover: Discounts Everywhere

Mercedes-Benz is scrambling to stop the bleeding. Massive price cuts have been rolled out across its entire EQ lineup in both China and the U.S. Some of the biggest discounts include:

• EQS 450 4MATIC sedan: Reduced by $13,500, now priced at $108,000
• EQS 580: Price cut by $10,500, bringing it down to $128,500
• EQS AMG sedan: Previously $148,700, now $15,000 off

This kind of aggressive discounting suggests that Mercedes-Benz dealers are struggling to move inventory. While price cuts might entice some buyers, they also raise a critical question: If these cars were truly competitive, would Mercedes-Benz need to slash prices so drastically?

The Premium Price Problem

One of the biggest issues is that Mercedes-Benz insists on pricing its EVs at a premium, but many consumers don’t believe the technology justifies the cost.

It’s not just about price—it’s about perception. If Mercedes-Benz were offering cutting-edge EVs with top-tier technology, buyers might be willing to pay more. But right now, Chinese EV brands like Zeekr and XPeng are delivering superior tech at a fraction of the price. If Mercedes-Benz slapped its badge on a Zeekr 001 FR, consumers might pay the premium. But with the current EQ lineup, they aren’t convinced.

The Layoffs and Cost-Cutting Measures

Beyond plummeting sales, Mercedes-Benz is grappling with financial strain. The company has already laid off 20,000 employees in recent years, and reports from Germany suggest that another 16,000 jobs are on the chopping block. To stay afloat, Mercedes-Benz has announced plans to cut costs by billions of dollars annually.

This isn’t just a Mercedes-Benz problem. The entire German auto industry is in turmoil. Volkswagen is locked in a bitter battle with labor unions over potential job cuts, and talks have reached a stalemate. However, Mercedes-Benz’s struggles seem particularly dire. Back in 2019, the company announced €1.4 billion in cost reductions after two profit warnings. Today, it appears those cuts weren’t nearly enough.

The Road Ahead

Mercedes-Benz’s current trajectory is unsustainable. If its EV strategy doesn’t improve, it risks losing even more ground to BMW, Tesla, and emerging Chinese competitors. The luxury brand must make a choice: Either drastically improve its EV technology and pricing strategy or continue discounting until margins disappear entirely.

The reality is sinking in—premium pricing without premium technology won’t work in the EV market. Consumers have more choices than ever, and right now, they’re choosing to spend their money elsewhere. Unless Mercedes-Benz adapts, it could face a long, painful decline.