Mercedes-Benz shares fell sharply on Thursday after the German carmaker reported a decline in profit and revenue as challenges from electric-vehicle competition and unstable supply chains affected its performance.
Frankfurt-listed shares were down 6%, putting the stock on course for its worst day in almost six months. The company said it had faced a “subdued market environment marked by intense price competition,” particularly in EVs.
Chief Financial Officer Harald Wilhelm described the EV market as a “pretty brutal space,” as some carmakers are selling EVs for less than regular gas and diesel cars — despite higher production costs.
Mercedes-Benz revenue was down 1.4% to 37.2 billion euros, below the consensus estimate, as passenger car sales dropped 5%, partially due to supply-chain challenges. Inflation was a big challenge for the company, along with supply-chain issues and foreign exchange losses.
Results showed overall car sales for the first nine months of the year have been mostly stable, with growth in Germany and a decline in China.
What does this mean for me?
Mercedes-Benz is targeting 50% hybrid and EV global sales by 2025, and says it will only launch EV models from that point. The company said Thursday it remained committed to these targets.
Despite a slow start to the electric-vehicle transition, traditional automakers have announced ambitious targets in recent years, but face intense competition from EV leader Tesla and Chinese firm BYD. Mercedes’ share of all-electric vehicle sales rose from 6% to 11% in the first nine months of the year, the results showed.