Donald Trump has already created ripples with his new retaliatory tariffs implemented against other nations from where goods are imported including India particularly for auto and auto components. Even manufacturers from the European Union are facing steep tariffs on automotive imports into the United States of America which has led to slowing demands.
Mercedes-Benz has announced a temporary halt in deliveries of its EQ electric vehicle (EV) lineup to the United States. The German luxury carmaker cited slowing EV demand and mounting inventories at dealerships as the key reasons for this move.
The decision comes in the wake of President Trump’s recent spending bill, which curtailed federal EV tax credits earlier than anticipated. Industry analysts have since lowered expectations for the U.S. EV market in 2025. During the delivery pause, Mercedes will focus on clearing existing EQ inventory while continuing to ship vehicles produced at its Tuscaloosa, Alabama plant.
In a bid to stimulate future sales, the automaker also confirmed price reductions across its EQE and EQS sedan and SUV models in the U.S., with base prices set to drop between 4% and 16% starting from the 2026 model year, excluding delivery charges.
Mercedes-Benz Reaffirms Long-Term EV Commitment
Despite the short-term challenges, Mercedes-Benz remains optimistic about the future of battery electric vehicles (BEVs) in the U.S. market. CEO Ola Källenius told reporters during the company’s second-quarter results presentation that he did not believe BEV demand in the United States would drop to zero and added that he still expected the medium- to long-term adoption rate of BEVs in the country to gradually increase.
Earlier this year, Mercedes revealed a revised product strategy, planning a balanced lineup of petrol, diesel, and electric vehicles. By 2027, the company aims to launch 19 new combustion-engine models alongside 17 BEVs, signaling a pragmatic approach to evolving consumer preferences.
Other Mercedes-Benz developments
With the rise in developmental and manufacturing costs, earlier this year, Mercedes-Benz announced it will raise prices of its vehicles in India. The first stage of price update took place on June 1 which will be followed by the second phase starting on 1 September 2025. This two-phase price adjustment gives customers the opportunity to plan their purchases and financing options more effectively, helping them avoid a sudden and significant price increase driven by current market pricing challenges.
(With inputs from Reuters)