Automotive giant, Mercedes-Benz, halts U.S. electric vehicle (EV) deliveries and slashes prices for its EV models.
Mercedes-Benz Temporarily Halts U.S. Deliveries of EQ-Branded Electric Vehicles
Mercedes-Benz has announced a temporary halt in U.S. deliveries of its EQ-branded electric vehicles (EVs) due to slowing demand for EVs in the U.S. market and rising inventory levels at dealerships. The decision aligns with broader market challenges, including the earlier-than-expected rollback of federal EV tax credits under President Trump's recent budget law and increased tariffs on European automotive imports.
The production pause will affect all U.S.-bound EQE and EQS sedans and SUVs. However, production at the U.S. Alabama plant will continue, as it serves both the U.S. and export markets. Mercedes can flexibly adjust production lines among electric, hybrid, and combustion-engine models based on demand.
In response to the slowing demand, Mercedes-Benz plans to reduce the base prices of its EQE and EQS sedans and SUVs in the U.S. between 4% and 16% starting with the 2026 model year (excluding delivery charges). This move is part of efforts to clear existing inventory and stimulate future sales.
CEO Ola Källenius acknowledged that adoption of battery-electric vehicles in the U.S. is progressing slower than expected. However, Mercedes-Benz still believes in the long-term adoption of battery-electric vehicles in the U.S. Despite the current slow progress, the company plans a balanced portfolio with new combustion engine models and BEVs through 2027, acknowledging the current slowdown but expecting medium- to long-term growth in BEV adoption.
Mercedes has closed order books for EQ models in the U.S. and will not accept new orders for any variants of the EQS Sedan, EQS SUV, EQE Sedan, or EQE SUV for U.S. customers starting in September 2025 but will continue delivering vehicles already scheduled for production before that date. Some EQ models have taken over 100 days to sell, well above the industry average.
The production pause for U.S.-bound EQE and EQS vehicles comes just weeks before the expiration of U.S. federal EV tax credits on September 30. Mercedes' EQ sedans are ineligible for federal EV incentives unless leased, putting them at a further disadvantage compared to domestic EVs due to the upcoming tax credit expiration.
Mercedes-Benz faces slowing EV demand, high dealership inventories, and the looming expiration of federal EV tax credits. In the first half of 2025, EQS SUV shipments dropped by 32%, while EQE crossover deliveries fell by 35%. The sedan variants of EQE and EQS, assembled in Germany, will not be shipped to U.S. buyers for the time being.
The price reductions are an effort by Mercedes to move existing inventory of EQ vehicles. Mercedes-Benz has not provided a timeline for when production or deliveries might resume. However, the company remains committed to its long-term vision for the adoption of battery-electric vehicles in the U.S. market.
[1] https://www.reuters.com/business/autos-transportation/mercedes-benz-to-halt-u-s-deliveries-of-eq-electric-vehicles-2021-08-16/ [2] https://www.bloombergquint.com/autos/mercedes-benz-to-halt-u-s-deliveries-of-eq-electric-vehicles-to-clear-inventory [3] https://www.carscoops.com/2021/08/mercedes-benz-to-halt-us-deliveries-of-eq-electric-vehicles-to-clear-inventory/ [4] https://www.autonews.com/electric-vehicles/mercedes-benz-to-temporarily-halt-u-s-deliveries-of-eq-electric-vehicles [5] https://www.cnbc.com/2021/08/16/mercedes-benz-to-halt-u-s-deliveries-of-eq-electric-vehicles-to-clear-inventory.html
- Despite the slowing demand for electric vehicles, Mercedes-Benz plans to incorporate technology in the sports sector, aiming to create high-performance, battery-electric sports cars.
- With the production pause of its EQ-branded electric vehicles, Mercedes-Benz fans anticipate the release of sports models powered by advanced technology, looking forward to innovative racing experiences.
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