Mercedes-Benz’s profit bet: fewer cars, but more expensive ones

Mercedes-Benz is betting that selling fewer cars is fine, as long as they’re more expensive ones. The first quarter of 2026 delivered a six percent drop in global passenger car deliveries to 419,400 units, dragged down by a 27 percent sales collapse in China. Without China, the company would have grown deliveries by five percent, with U.S. sales rising 20 percent and gains across Europe. But volume isn’t the priority. Instead, the company is leaning into high-margin luxury models: Maybach sales jumped 22 percent, the G-Class rose 16 percent, and the SL line surged 47 percent. This pivot to value over volume is now central to its financial survival. Electric vehicles added unexpected momentum. After a four percent decline in full-year 2025, BEV deliveries rebounded 11 percent in Q1 to 50,400 units. The new electric CLA drove a 34 percent rise in European EV sales and a 36 percent surge in Germany, where production is already on three shifts and order books stretch into late 2026. Electric vans climbed 29 percent. Yet profits still fell, with adjusted EBIT dropping from EUR 13.7 billion to EUR 8.2 billion in 2025. That decline forced a proposed dividend cut from EUR 4.30 to EUR 3.50 per share, to be voted on at the April 16 Annual General Meeting. The ex-dividend date is April 17, with payment on April 21. The real test comes April 29, when Mercedes-Benz releases its Q1 earnings and reveals whether the luxury and EV mix was enough to sustain its targeted EBIT margin of 11 to 13 percent for the cars division.