Business

Mercedes to Lower Prices, Pause Deliveries on Phaseout of EV Credits
By Reuters | 30 Jul, 2025

Trump's phaseout of EV credits has cut sales prospects for Mercedes-Benz's growing lineup of EV models.

The steering wheel and one of the digital dashboards of the all-electric Mercedes-Benz EQS SUV is seen at the opening of a Mercedes-Benz electric vehicle Battery Factory, marking one of only seven locations producing batteries for their fully electric Mercedes-EQ models, in Woodstock, Alabama, U.S., March 15, 2022. REUTERS/Elijah Nouvelage/File Photo

Mercedes-Benz will pause deliveries of its EQ electric range to the United States and cut prices of new EQ models there, the carmaker said on Wednesday, responding to slowing demand and high inventories at dealerships.

Since President Donald Trump's spending bill earlier this month cut tax EV credits sooner than anticipated, analysts have warned that the U.S. EV market would underperform expectations this year.

During the pause, Mercedes will run down EQ inventories in the U.S. and also supply cars made in its plant in Tuscaloosa, Alabama.

The company also said it would cut the base price of its EQE and EQS sedan and SUV models in the U.S. between 4% and 16% starting with the 2026 model year, excluding delivery charges.

Mercedes CEO Ola Kaellenius told reporters on Wednesday that despite the slower trajectory, he expected U.S. consumers to buy more battery electric vehicles (BEVs) over time. 

Presenting the company's second-quarter results, he said: "We don't believe that the BEV demand in the United States goes to zero: we still think that the medium to long-term adoption rate of BEVs in the U.S. will creep upwards." 

The carmaker said in February that it would make more petrol and diesel cars than EVs in its new product range. It said it was targeting 19 new combustion engine models and 17 BEVs by the end of 2027, after its BEV sales dropped by a quarter last year.

(Reporting by Alessandro Parodi and Amir Orusov. Editing by Matt Scuffham and Mark Potter)