Mercedes Benz CFO: The "too cruel" price war in the electric vehicle market is unsustainable

On Thursday, October 27th, local time, luxury car manufacturer Mercedes Benz stated in its 2023 third quarter financial report that the electric vehicle market is "very cruel", with significant product price reductions and supply chain issues leading to a decline in third quarter earnings. The automotive department's adjusted sales return for the fourth quarter may be at the lower limit of the expected range of 12% to 14%

On Thursday, October 27th, local time, luxury car manufacturer Mercedes Benz stated in its 2023 third quarter financial report that the electric vehicle market is "very cruel", with significant product price reductions and supply chain issues leading to a decline in third quarter earnings. The automotive department's adjusted sales return for the fourth quarter may be at the lower limit of the expected range of 12% to 14%.

Mercedes Benz Chief Financial Officer (CFO) Harald Wilhelm stated on the earnings conference call that the company is still committed to achieving its electric vehicle goals, but if the profit margin of electric vehicles falls below previous expectations, it may increase the overall return rate through the returns brought by the fuel vehicle product portfolio.

Although some traditional car manufacturers produce pure electric vehicles at higher costs, their selling prices are lower than those of gasoline powered vehicles. William said, "This is a quite brutal market.

He said, "I find it difficult to imagine that the current situation is completely sustainable for every enterprise

Mercedes Benz's pricing strategy is to maintain a certain high price and focus on improving profit margins rather than sales. William stated that the discounted sales of some models in the German market in the fourth quarter did not represent an overall shift in the company's pricing strategy.

On Thursday, Mercedes' stock price fell by more than 6%, reaching its lowest point in nearly a year, making it the stock with the largest decline in the Eurozone blue chip index. BMW fell 4% on the same day, while Volkswagen fell more than 2%.

Automakers from Ford to Tesla have slashed prices in various markets throughout the year in order to stimulate demand, but Mercedes Benz refuses to follow suit.

On Thursday, Mercedes Benz announced that the automotive department's adjusted sales return for the third quarter was 12.4%. (Chen Chen)