Mercedes-Benz. The name alone summons visions of silver arrows carving through rain or an S-Class so cosily upholstered that an airline economy seat suddenly feels like the rack. For decades they ruled the road: perfect engineering with just enough swagger to remind everyone you weren’t in a Fiat. But lately something has gone badly wrong in Stuttgart. The grand plan to chase only the super-rich (Maybachs lounging like society queens and G-Wagens flexing their cubic muscles) has slid into a ditch the size of the Nürburgring. Sales are coughing, profits are evaporating faster than coolant on a hot day, and the man in the driving seat, Ola Källenius, is getting seriously hot under the collar from shareholders who smell blood.
Let’s rewind, because this isn’t a pothole; it’s a slow-motion U-turn. Back in 2022 Källenius unveiled his masterstroke: “The Economics of Desire”. Sounded like an expensive cologne, but the message was simple: ditch the affordable stuff for normal people and go all-in on the top shelf. AMG monsters that snarl like wolves on espresso, Maybach limousines that whisper “I’m richer than you”, and the immortal G-Wagon, that square-jawed icon that refuses to die no matter how loudly physics protests. The idea? Fat margins from fat wallets, leave the volume game to Toyota and friends. Those juicy profits would bankroll a dignified, stately glide into electrification. From 2025 only new platforms without combustion engines, by 2030 all-electric wherever the market allowed. Bold. But as every racing driver knows: bold without grip ends in the barriers.
Welcome to 2025. The barriers have been well and truly hit. Globally, 2.4 million cars and vans still left the factories last year, but under the bonnet it’s screaming. The very top-end models, the darlings of the luxury strategy, limped along until the final quarter when the electric G-Class finally gave off-roaders a silent thrill. Yet revenue is tipped to dip this year and operating profit is set to plummet as if someone left the handbrake off. In America the GLE and GLC still shift more than 60,000 units each, but it’s plug-in hybrids doing the heavy lifting with a 470 % surge. Pure electrics? Disaster: EQS down 52 %, EQE range off 39 %, even the cute EQB down 36 %. Globally Mercedes EVs fell 23 % in 2024 and another 24 % in Q2 2025. China, once a third of all sales, has imploded: passenger cars −7 % last year, −27 % in Q3 2025. The holy S-Class? Down 14 %. Throw in U.S. tariffs, supply-chain chaos and Chinese rivals like BYD making cars 30 % cheaper by doing everything in-house, and you’ve got the perfect storm. Operating profit down 70 % in recent quarters. No wonder investors are circling like vultures over a breakdown.
Källenius isn’t hiding in the glovebox. He’s now distancing himself from the “luxury-only” label (“we never called it that,” he claims, as if a rebrand fixes the balance sheet). The pivot is on: less ultra-luxe obsession, a return to more attainable metal (a new A-Class successor lands in 2028), fifteen brand-new EVs by 2027 and the EQ badge itself is being quietly retired, everything simply becomes Mercedes again. Goodbye melted-soap EQS styling, hello shapes that actually look like the three-pointed star. Discounts are flying: up to $15,000 off an AMG EQS to tempt the fence-sitters. Behind the scenes they’re chasing cost parity with petrol cars (still “many years away”, Källenius admits) while promising solid-state batteries and Nvidia autonomy by 2025. It’s a scramble, but a clever one.
And here’s where I get properly excited, because this mess is the exact wake-up call Mercedes, and the entire industry, needed. Electric isn’t a side quest; it’s the main straight. The Chinese newcomers aren’t just cheaper; they were born electric and prove you can deliver range, performance and a price tag that doesn’t require a second mortgage. Mercedes’ early EV bets were brave, but they tripped over pricing, oddball looks and underestimating how quickly buyers want silent, instant torque without the tailpipe guilt. Källenius said it himself in 2022: luxury customers would lead the charge to pure electric, lured by tech and pure driving joy. He was right. Picture an electric G-Class ploughing through mud without a sound, or an S-Class EV ghosting through town. Charging networks are exploding, costs are crashing and by the end of the decade 50 % of sales could be electric, not the forced 2025 targets of old, but a proper, believable sprint.
What a journey for Mercedes. From inventing the car to wrestling with its reinvention, they’ve always thrived on pushing limits. This luxury detour was expensive, but it sharpens the view. As they dial back the Maybach excess and put the pedal down on reachable electrics (think the coming CLA EV with over 500 miles of range), they’re primed to take the crown again. Not by clinging to the past, but by electrifying it. With style.
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