Mercedes-Benz earnings are a bad sign for EV sales. What it means for Ford, Tesla.

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Subscribe to enjoy similar stories. Mercedes-Benz stock fell in overseas trading after the German auto maker reported better-than-expected earnings but gave an outlook that doesn’t inspire the passion drivers might feel for a 300 SLR sports car. Thursday, the company announced fourth-quarter earnings per share of $2.68 from sales of about $40 billion.

Wall Street was looking for about $2.60 and just under $40 billion respectively. Mercedes shares were down 1.6% in overseas trading at €60.22 ($62.93). Management’s forecasts help to explain why.

Mercedes sees sales falling slightly from the 1.98 million vehicles delivered in 2024. Operating profit margins are expected to dip from about 8% to roughly 7%. Those numbers are a little worse than Wall Street is currently projecting, according to FactSet.

Electric-vehicle sales, including both all-electric and plug-in hybrid cars, should amount to about 21% of total vehicle sales, up from 19% in 2024. That implies EV unit sales growth of about 3%. Mercedes sold about 368,000 electrified cars in 2024, down about 8% from 2023.

All-electric sales came in at 185,000 units, down 23%. It was a tough year for battery-powered cars in Europe. All-electric sales came in just under two million vehicles, down 1% year over year.

Plug-in hybrid sales came in just under one million vehicles, down about 4%. All-electric car sales fared better in the U.S., but growth decelerated. Americans bought about 1.3 million all-electric cars in 2024, up about 7% year over year.

EV sales growth in 2023, however, was 46%. Mercedes’s guidance shows that an EV snapback isn’t in the cards for 2025. That is a watch item for investors in Ford Motor, General Motors, and Tesla.