Mercedes-Benz Group AG demonstrated resilience in the face of global economic headwinds, reporting solid financial performance for the second quarter of 2025 despite rising tariffs and a dynamic market environment. While the auto industry contends with geopolitical tensions and shifting trade policies, Mercedes-Benz remains focused on intelligent product development and operational efficiency.
“We achieved robust financial results in the second quarter given the dynamic business environment,” said Ola Källenius, CEO of Mercedes-Benz Group AG. “The best response is to stay on course to deliver desirable and intelligent products, while keeping a tight grip on costs.”
The numbers reinforce that strategy. The Group posted a free cash flow of €1.9 billion in its industrial business for Q2, up from €1.6 billion in Q2 2024. Net liquidity rose to €30.8 billion, reflecting careful financial stewardship amidst volatility. However, group EBIT was significantly impacted by €715 million in one-off adjustments related to efficiency programs and M&A transactions, notably including the sale of operations in Argentina.
Mercedes-Benz Cars: Sales Dip, Hybrids Rise
Mercedes-Benz Cars faced a complex quarter. With unit sales down 9% year-on-year to 453,700 vehicles, the brand was clearly not immune to a cooling Chinese market and the pressure of new tariffs. Still, the company’s strategy of stock management and cost controls helped deliver an adjusted EBIT margin of 5.1% in Q2 and 6.2% for the first half of 2025. Excluding tariff effects, the return on sales would have stood at 6.6%.
Plug-in hybrid (PHEV) demand proved a bright spot, surging 34% in the quarter. Combined xEV sales rose 4%, indicating continued consumer interest in electrification, even as full EV adoption faces regulatory and infrastructure hurdles in certain markets.
Top-end vehicles — a core pillar of the Mercedes luxury brand identity — accounted for 14.3% of overall car sales. Yet the softer pricing environment and lower unit sales dented profitability, leading the company to revise its full-year RoS guidance to between 4% and 6%.
Mercedes-Benz Vans: Electric Uptick in a Tough Market
Mercedes-Benz Vans also saw sales volume decline 10% year-over-year in a competitive market, delivering 93,400 units in Q2. Nonetheless, adjusted EBIT margins remained strong at 10.4% for the quarter and 11.0% in the first half, bolstered by a 32% jump in electric van sales.
Looking ahead, the vans division is expected to outperform its first-half results in H2, but full-year sales are projected to fall significantly below 2024 levels. The revised guidance sets the return on sales between 8% and 10%.
Mercedes-Benz Mobility: Steady and Stable
The Group’s financial services arm, Mercedes-Benz Mobility, posted an adjusted return on equity of 8.9% in Q2 and 8.8% for H1, slightly ahead of the previous year. Efficient asset management and gains from financial investments helped offset a challenging lending environment and margin compression.
2025 Outlook: Tariff Pressure and Strategic Investments
Despite a solid first half, Mercedes-Benz has lowered its full-year outlook across key metrics, primarily due to tariff implications and anticipated lower unit sales at both Cars and Vans divisions.
- Mercedes-Benz Cars: Full-year unit sales are now expected to fall significantly below the 1.98 million recorded in 2024. Adjusted RoS is guided at 4–6%, down from 8.1% last year.
- Mercedes-Benz Vans: Expected to finish the year well below 2024’s 406,000 units, with a revised RoS forecast of 8–10%.
- xEV Share: Electrified vehicle share is projected to increase to 20–22% for Cars (up from 19%) and 8–10% for Vans (up from 5%).
- Investments: In contrast to the sales outlook, investments in property, plant, and equipment are set to rise significantly, particularly for Mercedes-Benz Cars and Vans. R&D spending will remain at the prior-year level for Cars and increase significantly for Vans.
Strategic Focus: Next Level Performance
Källenius emphasized that the company’s Next Level Performance program goes beyond cost-cutting. It aims to build long-term resilience through operational agility and a sharper focus on future product development.
“By using our global production footprint intelligently and executing our Next Level Performance programme, we’re adapting to new geopolitical realities,” said Källenius.
As the automotive world contends with shifting trade dynamics, evolving customer expectations, and accelerating electrification, Mercedes-Benz is staying the course — disciplined in execution, focused on premium innovation, and increasingly selective in where and how it competes globally.
Source: Mercedes-Benz