- Mercedes-Benz shares fell Thursday as it reported lower earnings and revenue and highlighted pricing challenges in the electric vehicle space.
- Reuters reported that CFO Harald Wilhelm described the electric vehicle market as “an absolutely brutal space.”
- This comes at a time when some traditional carmakers are selling electric cars at a lower price than cars with regular combustion engines – despite higher production costs.
The Mercedes-AMG GT 43 4MATIC+ is on display at the Brussels Motor Show on January 9, 2020 in Brussels, Belgium.
Sjoerd van der Waal | Getty Images News | Getty Images
Mercedes-Benz shares fell sharply on Thursday after the German automaker reported a decline in profits and revenue due to challenges caused by electric vehicles competing for supply chains.
Shares were down 5.7% at 10 a.m. London time, putting the stock on track for its worst day since May 4, according to LSEG data.
The company said it faced a “weak market environment characterized by intense price competition,” especially in electric vehicles.
In a call with an analyst about the results, Chief Financial Officer Harald Wilhelm described the electric vehicle market as a “very brutal space,” according to Reuters. mentioned. This comes at a time when some traditional carmakers are selling electric cars at a lower price than cars with regular combustion engines – despite higher production costs.
“I cannot imagine that the current situation is completely sustainable for everyone,” Wilhelm said, according to the news agency.
The group’s earnings before interest and taxes fell 7% to 4.8 billion euros ($5.06 billion) in the third quarter. Revenue fell 1.4% to €37.2 billion, below consensus estimates, as passenger vehicle sales fell 5%, partly due to supply chain challenges.
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Mercedes Benz stock price.
Inflation has been a major challenge for the company, along with supply chain issues and foreign exchange losses.
results Total car sales during the first nine months showed almost stability, with growth in Germany and a decline in China.
Mercedes-Benz aims to achieve 50% global sales of hybrid and electric cars by 2025, and says it will launch electric-only models from then on. The company said Thursday it remains committed to those goals.
Despite a slow start to the transition to electric vehicles, legacy automakers have announced ambitious goals in recent years, but face stiff competition from Elon Musk’s Tesla and Chinese players such as Warren Buffett-backed BYD.
The results showed that Mercedes’ share of fully electric car sales rose from 6% to 11% in the first nine months of the year.
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