Report: Mercedes Having Tough Time Selling EVs
![Matt Posky](https://cdn-fastly.thetruthaboutcars.com/media/profile/2022/08/25/1357641_2.jpg?size=91x91)
Like most government agencies, NGOs, and publicly traded companies, Mercedes-Benz has made a promise to be all-electric by 2030. The automaker intends to have every newly launched vehicle architecture be electric-only after 2024 and to gradually wean itself off combustion engines.
Unfortunately, the brand’s sales trajectory doesn’t appear to be cooperating. Despite seeing a surge of interest in its electrified EQ products initially, Mercedes has started having trouble moving EVs.
It’s been a growing problem for several brands that have started to pivot toward all-electric products. However, luxury brands seemed to have the edge in EV sales — as their customer base is more willing to be early adopters and typically has more disposable income.
Automotive News recently conducted a series of interviews with Mercedes retailers. Citing Edmunds data that shows Mercedes-Benz dealers took an average of 82 days to sell the brand's battery-powered EQ models in September (double BMW's 38-day turnaround rate while also being above the luxury segment average of 57 days), the outlet was hoping to shed some light on the matter.
From Automotive News:
Mercedes retailers interviewed by Automotive News blame their bloated stockpiles on the product and on the brand's unwillingness to respond to increased competition with sales programs. The dealers requested not to be identified for fear of retaliation.
A Mercedes store operator said he has a more than six-month supply of EVs compared with about a 50-day supply of gasoline-powered vehicles.
"The EVs are coming whether or not you asked for them or earned them," he said. "There is too much of a price premium — especially at the top end of the EQ lineup — and almost no [lease] support."
The executive said the EVs lack the "lust factor" of Mercedes' gasoline-powered flagship models, such as the S-Class sedan and AMG-GT coupe.
"Our cars need to be 'want' cars," he said. "The S-Class has maintained good loyalty because it's aspirational. An EQS is not something that most people aspire to own."
Mercedes is responding to the discontent. Executives acknowledge an oversupply of the top-line EQS at the expense of the more affordable EQB and EQE crossovers, a retail source briefed on the matter said.
I’ve tracked the situation through online forums and whatever sales data comes out (now that the industry has become allergic to monthly sales reports) while periodically checking in with an acquaintance of mine who happens to be a freshly retired Mercedes-Benz dealer situated on the East Coast.
His assessment was likewise that novel electric models had been heavily marketed and typically ended up getting a lot of attention from a subset of early adopters who earnestly believe EVs are the future. But most of those individuals have already purchased an electric vehicle by now, leaving everyone else to pick up the slack as volume increases.
“The boogie surrounding these vehicles feels like it’s ending,” he told me. “We started seeing customers asking to trade them in early and all the dingbats who originally wanted showrooms full of EVs started changing their mind.”
“I sold one of the very first EQS models to arrive in the United States. The guy that bought it came in a week before it arrived just to make sure he could still get it and he was willing to pay whatever it took. That was late in 2022. By the next summer, they were anchors. Everyone was having trouble moving EVs off the lot and the depreciation was crazy. They pushed them out to us before the technology was ready and the build quality was there. The oil lobby has to be thrilled.”
While Mercedes-Benz isn’t keen on publicly discussing its dialogue with retailers, it’s very obviously aware of the problem. The company has reportedly instituted plans to slow down production on some of the pricier EQ models to prioritize plug-in hybrids, traditional combustion vehicles, and EVs carrying lower MSRPs for 2024.
Battery supplies are also said to be tight, with numerous automakers opting to save what cells they can get for expensive models with broad margins. Mercedes also seems to have done this. But there’s no advantage to the scheme when those models aren’t being sold and the company is rejiggering allocations to cope.
Whereas the $104,400 (starting) EQS appears to have become a thorn in the side of many Mercedes-Benz dealerships, some claim they cannot get enough of the $52,750 (starting) EQB.
"We could not supply [the EQB] at the beginning of the year," Mercedes-Benz USA CEO Dimitris Psillakis told Automotive News. "Now we can, but it takes some time [to reach the retailers.]”
Despite intense pressure from the United Nations, countless NGOs, and just about every Western government you’ve ever heard of, the public’s appetite for electric vehicles appears to be dying down in North America. But the situation is more than just speculative, there’s valid information to back up the claim.
Automakers have started confessing that it’s been harder than anticipated to make EVs work for their bottom line and the sales data reflects this. Cloud Theory released a report this morning showing that the typical battery-powered car sold after just 36 days on dealer lots in early 2023. However, that number climbed to over 80 days by September — indicating that consumer interest in EVs is lacking relative to how many are being manufactured.
Some of that is undoubtedly the result of production ramping up on more all-electric models. But it’s not likely to be the whole story and mounting regulatory pressure doesn’t appear to be helping. The EV customer base just isn’t as large as some had hoped.
"The ship of early adopters — willing to put a reservation down on virtually any EV announced — has sailed," Ivan Drury, Edmunds' director of insights, told Automotive News.
Drury now believes that companies will have to convince skeptics and nonbelievers to switch to EVs — a tall order he believes will take an immense amount of time and money to be fulfilled.
This is something we’ve heard before, and perhaps often enough so we shouldn’t be all that surprised by what’s going on. However, the report makes it look as though Mercedes-Benz has dropped the ball globally — noting that the brand’s luxury EV sales are being eclipsed by BMW, as well as Chinese-based startup companies like Nio and Zeekr.
Though calling either a “startup” seems a little generous. Zeekr is owned by Geely, Nio used to be NextEV, and both companies are assumed to be heavily supported by the Chinese government.
Focusing back on Western markets, it seems like Mercedes-Benz is going to have to face some tough decisions in the months ahead. Dealerships appear worried about EV sales being further hampered by economic conditions and the company itself is trying to tweak production to account for what looks like plateauing interest in electric cars. It’s not the plan Mercedes made a few years ago. But it’s probably the one it’ll need to run with for the time being.
[Image: Mercedes-Benz]
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![Matt Posky](https://cdn-fastly.thetruthaboutcars.com/media/profile/2022/08/25/1357641_2.jpg?size=91x91)
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Some of the best leases I’ve ever seen can be had on these.
TTAC's angle is the market for EV's is cooling - it's not, but the hype over transitional EV's is quickly evaporating (aka low range conversions of ICE platforms.)
MB's electric cars just aren't good, flat-out. To be fair, most MB products right now aren't- that' why they're resorting to stupid gimmicks like putting the 3 pointed star in the tail lamps- they're a logo and nothing more.
You sit in an EQS, which looks like a Hyundai complete with DLO fail and an ugly logo. You get in and sit in a bathtub, complete with way too many screens and a way-too-high cowl line that comes up to your nose. Everything that isn't a screen is crappy biohazard piano black. Oooh, there's LED lights - impressing same people who buy a few year old AMG at a sled lot making biweekly payments on rented wheels.
All running on a drivetrain and range that are already obsolete. The electronics and infotainment are horrendous, dated, and distracting, and it feels like a mishmash of transitional tech for tech's sake. How does it drive? Meh.
If you're going to blow six figures on an EV, there's way better options - the excellent Lucid Air (which already sells in boutique numbers) or the Rivian options- all of these have a cachet that MB does not have. Even a Tesla Model S is a more exciting vehicle.