Why Mercedes Is Tapping The Brakes On Luxury EVs

By now, it’s common knowledge that the American electric car sales bubble is finally about to burst, especially now that the Clean Air Act tax credit is about to come to an end. We’ve seen brands suffer from catastrophic sales declines over the past few months, but analysts predict that performance will be even worse over the second half of this year. Beyond the discontinuation of the aforementioned act, new vehicle consumers just aren’t showing that much interest in electric vehicles, except in California and a couple of other states.

Founded

1926

Founder

Karl Benz

Headquarters

Stuttgart, Germany

Current CEO

Ola Källenius

Divisions

Mercedes-Benz Cars, Mercedes-Benz Vans

Mercedes-Benz is one brand that has invested monumental sums of capital into its electrification program, intending to discontinue the ICE in its entirety by the end of the decade. In recent months, the German brand has slowly been undoing these goals, but its latest action appears as somewhat of a nail in the coffin of its electrification journey. Over the next few days, the Mercedes-EQ catalog will be hit with substantial discounts, together with a manufacturing pause, in an attempt to get unsold units off its dealership floors. This is a trend we’ve seen affect multiple manufacturers, but it seems to have hit Mercedes-Benz a bit worse than its main rivals.

Key Discounts Across The EQ Range

The German Brand’s Premier EVs Are Now Available For Less

Mercedes

Mercedes-Benz has made a major shift in its U.S. electric vehicle strategy by cutting prices across its 2026 EQ lineup and pausing new EV orders. Joining this is also an immediate halt to all domestic production of most models. The brand has executed this decision just a month before the federal EV tax credit is set to phase out, on September 30, 2025. Joining this decision is a declining demand for premium electric vehicles in the U.S. market.

The brand’s adjustments begin with aggressive pricing cuts designed to clear stock out of its dealerships. The Mercedes-Benz EQE sedan and SUV initially cost $74,900 and $79,050, respectively, but you can now pick both derivatives up for as little as $64,950. This is still a fair chunk of change for you to fork out for a premium sedan, but we’d argue it’s much more of a competitive deal when you look at what you’d get for the money, as this reduction makes the EQE range a much more competitive value proposition against key rivals.

The flagship EQS SUV boasted a rather steep $106,400 MSRP, but you can now get one for around $91,100. The EQS sedan has been marked down to around $101,400 from its $105,550 starting MSRP. On top of these official cuts, dealers are applying additional discounts, in some cases exceeding $15,000, as they move to offload unsold stock. Examples include EQS SUVs discounted by as much as $15,300 and EQE SUVs reduced by around $13,000. Such heavy markdowns underscore both the challenges Mercedes faces in aligning supply with consumer demand and its urgency to adapt as the tax credit window closes.

Production Pauses To Curb Excess Stock

Mercedes Pauses The Lines For Some Breathing Room

William Clavey | TopSpeed

Beyond pricing adjustments, Mercedes has confirmed it will halt U.S. production of the EQS and EQE sedans and SUVs at its plant in Vance, Alabama, starting September 1st. The facility will continue building vehicles for export, but domestic allocations will temporarily end. Additionally, the company has closed order books for these models, meaning American buyers can only purchase from existing dealer inventory until further notice. Although we have to point out that it doesn’t seem like many orders were being put through in any case.

According to key insiders, Mercedes attributed the production halt and order pause to current market conditions and emphasized its ability to shift output globally as part of a flexible manufacturing strategy. The company gave no timeline for resuming U.S. production, leaving uncertainty about its near-term EV presence in the country. We do have to point out that the shift does not signal an abandonment of electrification. Mercedes-Benz is preparing to launch its CLA EV range, which it expects to be a volume seller. This is a compact sedan based on the new MMA platform that will debut this fall as the brand’s next major step in the U.S. market.

We can also expect the upcoming GLC EV to officially show its face at the Munich Motor Show, as a reinforcement of the brand’s commitment to electrification in more accessible and high-demand segments. Mercedes is also investing in new generations of electric SUVs and sedans that it hopes will address weaknesses of the current EQ range, particularly around pricing, efficiency, and consumer appeal.

The Genius Of The Mercedes MMA Platform

Mercedes-Benz

Mercedes-Benz developed the Mercedes Modular Architecture as its next-generation electric-first vehicle foundation, designed to replace the existing EVA platform that underpins models like the aforementioned EQE and EQS. The brand plans for MMA to serve as the core structure for compact and midsize models, including sedans like the aformentioned CLA, crossovers, and SUVs, making it central to Mercedes’ volume EV strategy. Unlike the EVA platform, which it engineered primarily for larger luxury vehicles, MMA is more flexible, lighter, and more cost-efficient to produce, addressing the high production costs and limited profitability that have constrained Mercedes’ current EQ lineup.

MMA uses an 800-volt electrical architecture, enabling faster charging speeds and improved efficiency. It also supports bidirectional charging, allowing vehicles to feed power back into the grid or a home. The platform integrates Mercedes’ new MB.OS software system, which consolidates infotainment, driver assistance, and energy management into one seamless digital ecosystem designed for over-the-air updates and long-term adaptability.

MMA will underpin fully-electric and hybrid powertrains in some markets, in an attempt to be flexible for regions that are transitioning to electrification at different speeds. With its scalable design, the architecture allows for shorter or longer wheelbases, giving Mercedes the ability to produce a diverse range of vehicles globally while keeping development costs contained. Mercedes emphasizes that MMA is about innovative hardware working in conjunction with sustainable lifecycles, made possible via improved recyclability of battery packs and materials.

Calling It Quits On The EA Large Platform

Mercedes-Benz

Just a few months ago, Mercedes-Benz made a shocking announcement that it had scrapped its planned flagship MB.EA Large electric-vehicle platform, which was originally slated to underpin the next-generation EQE and EQS sedans and SUVs around 2028. It revealed this decision was due to weak demand and disappointing sales of its current EVA-based luxury EVs. Reports cite the decision will save Mercedes an estimated $5 billion to $7 billion in development and retooling costs.

Instead of investing in a clean-sheet architecture for its large-vehicle lineup, Mercedes will extend and upgrade its existing EVA2 platform, introducing 800-volt charging, more efficient motors, and new battery-cell tech. This pivot forms part of a broader strategy reset that sees the company continue developments of other EV platforms, including MB.EA Medium, the compact-car MMA platform, MB.AMG for performance EVs, and MB.VAN for commercial vehicles like the eSprinter.

Mercedes-EQ’s Poor H2 2025 Sales Performance

The Premium EVs Fail To Make Their Mark

TopSpeed

According to the brand’s H2 2025 results, the Mercedes-EQ portfolio suffered from a 55 percent sales decline year-on-year, having sold just 8,083 electric vehicles over the first six months of this year. The entry-level EQB SUV was one of the brand’s best-performing models, but it still struggles with poor sales figures. The brand was able to move 1,899 individual copies in Q2 2025, reflecting a 40.2 percent sales decline year-on-year.

The EQE range was hit with a 60.2-percent Q2 year-on-year sales decline, with the brand having sold 1,558 individual copies. This contributes to its 2,300 H2 sales figure, reflecting a 74.5-percent sales decline. The EQS range suffers from the worst performance, with a 498 Q2 2025 sales figure, resulting in an 80.9-percent sales decline year-on-year. This year so far, the brand has only been able to move 1,007 individual copies.