Mercedes Halts Production of Electric Vehicles in the US - The Reason Behind This Decision
Mercedes-Benz, the iconic German automaker, has announced a temporary halt on orders for its electric vehicles (EVs) in the U.S. due to unfavourable market conditions. This move comes as the company continues to produce all models intended for export to global markets and adjusts to local market demand.
The decision, effective starting September 1, 2025, was made due to slower-than-expected market demand, high dealership inventories, and the approaching expiration of the federal EV tax credit at the end of September 2025. The halt affects all variants of the EQS sedan, EQS SUV, EQE sedan, and EQE SUV. However, production for export markets will continue.
In a statement, a Mercedes-Benz Group representative expressed confidence that U.S. interest in electric vehicles would recover over time. They remain optimistic about the future, but are adjusting their production network to quickly adapt to market conditions. The representative believes that the medium- to long-term acceptance rate of battery-electric vehicles (BEVs) in the U.S. will gradually increase, albeit possibly at a slower pace due to new regulatory paths.
This temporary pause in orders comes as battery-electric vehicle (BEV) sales for Mercedes-Benz saw a nearly 25% decrease in the second quarter of this year, compared to the same period last year. In North America, electric vehicle sales increased by only 5% in the first four months of 2024, a significant contrast to the 25% increase in Europe and the 35% increase in China.
Recently, the U.S. President Donald Trump signed a new budget bill, eliminating the $7,500 tax credit for new electric vehicles. This change could potentially impact the demand for BEVs in the U.S., but the representative believes that the demand will not drop to zero.
Mercedes-Benz operates over 30 plants worldwide, including those in Alabama and South Carolina. The Alabama plant began producing the EQS SUV and EQE SUV in 2022, with the Mercedes-Maybach EQS SUV added in 2023. The company plans to continue bringing new BEV models like the upcoming CLA and GLC electric vehicles to the U.S.
Although the spokesperson could not specify when U.S. order banks for EQ models would reopen due to competitive reasons, they expressed that they believe the acceptance rate of BEVs in the U.S. will continue to rise in the medium to long term. The representative remains confident that the U.S. market will gradually embrace BEVs, just as it has with other technological advancements in the automotive industry.
What will be the impact of the elimination of the $7,500 tax credit for new electric vehicles on the finance sector, given the U.S. President Donald Trump signed a new budget bill? With the temporary halt on orders for electric vehicles by Mercedes-Benz due to slower market demand and high dealership inventories, will there be a shift in the general-news focus towards technology and finance, as these industries grapple with the changing landscape of the automotive industry?
