Mercedes-Benz has temporarily suspended orders for its electric vehicle (EV) units in the US due to waning demand. The decision affects the automaker’s EQ models, including the EQS Sedan, EQS SUV, EQE Sedan, and EQE SUV. Vehicles already scheduled for delivery before September 1 will still reach customers, though.
Mercedes Confirms EV Pause in the US
According to reports, a Mercedes spokesperson cited “market conditions” as reason behind the move. The representative explained that with over 30 production facilities worldwide, including plants in Alabama and South Carolina, the luxury brand aims to optimize its network by balancing export demands and local market trends.
Mercedes declined to offer any timeline for the resumption of its EQ production in the US. It maintained silence on the matter “for competitive reasons.”
A Huge Blow to Mercedes’ EV Ambitions in the US
The pause follows a significant cool down in Mercedes’ EV sales. In its Q2 earnings report, the company revealed a nearly 25% drop in battery electric vehicle (BEV) sales year-over-year, falling from 45,843 units to 35,027 units.
The slump was a huge setback in the company’s EV ambitions in the US market after huge expectations during the launch production of the EQS SUV and EQE SUV in Alabama in 2022. The Mercedes-Maybach EQS SUV also made it in the US due to the automaker’s positive projections in 2023.
The decision comes amid broader headwinds for EVs in the US. A recent spending bill signed by President Donald Trump eliminated a $7,500 tax credit for new EVs, effective September 30.
Industry analysts had warned that losing this incentive could dampen consumer interest, impacting not only Mercedes but also competitors like Tesla and General Motors. North American EV sales grew by just 5% in the first four months of 2024, lagging behind Europe’s 25% and China’s 35%, according to Rho Motion.
Optimism Remains
Despite the setback, Mercedes remains optimistic about the future of EVs in America. During the company’s earnings call, a representative expressed confidence that demand will recover over the medium to long term, albeit potentially at a slower pace without the tax credit.
“We don’t believe BEV demand in the US will drop to zero,” the representative noted, signaling Mercedes’ commitment to its electric future despite the current slowdown.
