Mercedes-Benz has reported big drops to revenues and profits in the second quarter due to the impact of trade tariffs on its business.
However, Mercedes-Benz Group also described a “robust” financial performance in the second quarter (Q2) 2025 with strong cash flow, amid a dynamic business environment influenced by new tariff policies globally.
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The company’s three business units sustained a free cash flow of the industrial business reaching €1.9bn in Q2, a 14.5% increase from €1.6bn in the same period last year.
However, the group’s revenue and EBIT were affected by the new tariffs, with EBIT including €715m of adjustments, primarily for operational efficiency initiatives and mergers and acquisitions (M&A) transactions, such as the sale of production and sales capacities in Argentina.
The group’s revenue declined by 9.8% to €33.1bn ($38.6bn) from €36.74bn of Q2 2024, and its profit decreased by 68.7% to €957m compared to €3.06bn in the same period a year ago.
The adjusted EBIT for Mercedes-Benz Group for Q2 2025 stood at €2.0bn, 50.9% down from €4.0bn in Q2 the previous year. This was said to be impacted by tariffs and the macro environment.
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By GlobalDataMercedes-Benz car sales were down by 9% in Q2 to 453,700 units impacted by market dynamics, particularly in China, and stock management in response to tariff influences.
Mercedes-Benz Cars achieved an adjusted EBIT margin of 5.1% in Q2 and 6.2% for the H1. The company noted that without the latest tariffs, the return on sales (RoS) was 6.6% for Q2.
Car sales were down by 9% in Q2 to 453,700 units, but this was a 2% increase from Q1 2025.
The sales were impacted by market dynamics, particularly in China, and stock management in response to tariff influences.
Top-end vehicles made up 14.3% of total sales, with plug-in hybrid vehicles (PHEV) sales growing by 34% in Q2 and xEV sales by 4%.
The EBIT for cars in Q2 was affected by tariffs, “softer” net pricing, efficiency measures, the macro environment, and lower unit sales.
Meanwhile, Mercedes-Benz Vans posted an adjusted EBIT margin of 10.4% in Q2 and 11.0% for the H1, despite lower sales volumes leading to 93,400 units sold in Q2, a 10% decrease.
However, sales of electric vans rose by 32% against the same quarter of the previous year.
In Q2, vans featured the addition of 5,000 electric vans to the transportation network of Amazon.
Previously, Mercedes-Benz Group reported a 9% decrease in sales for the Q2, selling 547,100 cars and vans.
In the first half (H1) of 2025, Mercedes-Benz Group’s revenue decreased by 8.6% to €66.37bn ($77.3bn), with EBIT at €3.56bn and adjusted EBIT at €4.53bn. Net profit for the H1 was decreased by 55.8% to €2.68bn from €6.08bn in the same period last year.
For the H1 of the year, the free cash flow stood at €4.2bn, 9.3% up from €3.9bn reported in H1 2024.
Net liquidity saw a significant rise to €30.8bn at the end of H1, compared to €27.4bn at the end of Q2 the previous year.
For the H1, the adjusted RoS for Mercedes-Benz Cars was 6.2%, including the effects of tariffs (7.0% excluding tariffs).
Looking ahead, Mercedes-Benz Group has updated its divisional guidance to account for tariff developments.
The Group now anticipates a significant reduction in revenue compared to the previous year’s level due to lower sales anticipated for its cars and vans.
Sales at Mercedes-Benz cars are forecasted to be lower than 2024 levels, with H2 sales similar to the H1.
The company has set a new full-year guidance range for return on sales adjusted at Mercedes-Benz Cars of 4% to 6%.
For Vans, sales are anticipated to be “significantly below” the last year, with a stronger H2 compared to the first.
This includes tariffs, resulting in a new guidance range of 8% to 10% for return on sales adjusted at Mercedes-Benz Vans for the full year.
Mercedes-Benz Group CEO Ola Kaellenius said: “We’re adapting to new geopolitical realities by using our global production footprint intelligently and by executing our Next Level Performance programme, which goes beyond efficiency measures, to increase the resilience of our company.”
