Mercedes reveals second quarter financial results - Mercedes announces financial data for the second quarter
Mercedes-Benz, the Stuttgart-based automobile manufacturer, announced a temporary suspension of its forecast for the current year due to uncertainty surrounding U.S. tariffs. The tariffs have had a significant negative impact on Mercedes-Benz's Q2 2025 business figures, contributing to a sharp decline in profitability.
In Q2 2025, Mercedes-Benz reported a 68% plunge in EBIT to €1.27 billion, with revenue declining about 10% to €33.2 billion. The tariffs alone accounted for roughly €370 million in costs during Q2, severely squeezing margins and pressuring pricing and sales in the U.S. market.
As a result, Mercedes-Benz lowered its full-year margin forecast from at least 6% down to as low as 4% for 2025. The company is also absorbing around €1.3 billion ($1.5 billion) in costs tied to a strategic reset of the brand, indicating a broader response beyond the tariffs to adapt to global competitive pressures, including fierce EV competition from Chinese brands.
Despite the profit declines, Mercedes-Benz maintained relatively strong free cash flow and industrial liquidity, generating €1.9 billion in free cash flow for Q2, up 14% year-over-year, providing some financial flexibility. The company aims to navigate these challenges while investing in new product launches, notably prepping for the IAA Mobility 2025 event to showcase its next-generation vehicles targeted at improving competitiveness.
Meanwhile, Mercedes-Benz sold fewer vehicles in the first half of the year, with a decrease of 8% to 1.08 million vehicles for both cars and vans. The company will present its second quarter business figures on Wednesday at 7:00 AM.
Porsche, another Stuttgart-based subsidiary of the Volkswagen Group based in Zuffenhausen, will also publish its quarterly figures on Wednesday at 8:00 AM. In April to June, Porsche's operating profit plummeted, earning only €154 million, compared to around €1.7 billion the previous year, a decrease of nearly 91%. Observers expect statements about the impact of U.S. tariffs on Porsche's business.
The net result for Porsche is expected to be announced on Wednesday. Porsche faced headwinds similar to Mercedes-Benz, with challenges in China and the U.S., as well as with high-end models and electric vehicles.
In the face of these challenges, both Mercedes-Benz and Porsche are taking strategic steps to adapt and position themselves for future growth. The U.S. tariffs have materially increased costs and reduced profits, leading to margin downgrades and substantial strategic cost implications for Mercedes-Benz. The company is responding with a mix of cost absorption, strategic reset investments, and planned product innovation.
- Against the backdrop of U.S. tariffs significantly impacting Mercedes-Benz's Q2 2025 business figures, the company's employment policy might need to be revised to address the squeezed margins and pressing pricing and sales issues in the U.S. market.
- As industry competitors are making substantial investments in the development of electric vehicles (EVs), Mercedes-Benz's financial policy could potentially shift towards prioritizing investments in next-generation vehicles, as showcased at the IAA Mobility 2025 event, to improve competitiveness and maintain a strong market presence.
