Mercedes-Benz 2025 Earnings Bombshell: China Revenue Plummets 29%, Global Profits Halved

Mercedes-Benz recently released its 2025 financial results, reporting annual revenue of €132.2 billion—a 9.2% year-over-year decline—and a sharp 50% drop in global net profit. Performance in the Chinese market was particularly weak, with revenue in China plunging by 29% and sales falling 19% year-over-year to 552,000 vehicles, returning to levels last seen a decade ago. This downturn pushed the average selling price per vehicle down from €71,000 to €68,100 and caused the Return on Sales (RoS) for the passenger car segment to plummet from 8.1% to 5.0%. Additional pressure on profits stemmed from approximately €1 billion in tariff expenses and €1.6 billion in restructuring costs. Free cash flow turned negative in the fourth quarter, highlighting growing financial strain. To reverse this trend, Mercedes-Benz is accelerating its localization strategy—partnering with Momenta to develop the MB.OS system and integrating ByteDance’s Doubao large language model—with plans to launch 40 new models within the next three years.