Mercedes-Benz FY 2025: Sales Drop, EPS Plunges

On the 12th of February 206, German carmaker Mercedes-Benz Group (ticker: MBG) reported its Fiscal Year (FY) 2025 results. The trends therein largely consolidated those seen in the previous FY: the company’s net unit sales are sliding across the board and in nearly every key market.

Trend Analysis

Over the past five years, a burst in North America sales in 2022 created the only positive overall sales metric for the company. Since 2022, global sales of both Mercedes-Benz’s cars and vans have been in decline.

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Source: Company Information; Leverage Shares analysis

In the “Cars” segment, all three price points – “Entry”, “Core” and “Top-End” registered net decreases from the previous FY. What somewhat lessened the loss of sales in the “Top-End” were encouraging growth trends in the sales of Plugin Hybrid Electric Vehicles (PHEVs), which essentially flattened the growth trend in “Electrified vehicles”, given that all-electric Battery Electric Vehicles registered yet another year of sales decline. All told, “Electrified vehicles” accounted for over 20% of all car sales.

The “Vans” segment repeated trends by registering a net overall decline for another year. However, electric vans (which represented a little under 8% of all vans sold) reversed the previous FY’s decline and registered very strong growth. Vans account for a little under 20% of all vehicles sold by Mercedes-Benz; they represented a little under 17% of all sales in the previous FY.

Strong growth trends in Asia and North America markets – which helped somewhat improve up global sales growth trends in 2022 and 2024 – were no longer seen in 2025. Asia, which had accounted for a little under half of all car sales in a couple of prior years, accounted for around 41% in 2025. China, in particular, fared worse than the rest of Asia, with locally-produced China models – made in partnership with a state-owned carmaker – faring comparatively worse in decline trends than imports did. Asia fared somewhat better at maintaining overall share of van sales at 8%; however China dropped 1 percentage below previous FY to 6%.

While the North America market also registered a decline in 2025, the relative share of all car sales – unlike with Asia – has remained consistent for the past two years at 18%. The U.S. also remained consistent within this market at 16% share of all car sales. Van sales, however, didn’t do quite as well here: North America’s share dipped from 15% to 12% while the U.S. shrunk by a slightly lower amount by going from 12% to 10%.

What somewhat lessened the worsening of sales were two markets: “Europe” and “Other”. Car sales went from accounting for 30% of all sales in 2022 to 35% in 2025. In that same period, van sales went from 62% share to 69%. In 2023, cars and van sales in “Other Markets” accounted for 4% and 9% respectively. In 2025, “Other Markets” accounted for 5% and 11%. Mercedes-Benz was in the midst of a massive multi-year effort to incorporate EV-relevant manufacturing across its many factories and assembly plants. This coupled with overall sales declines don’t make for a very encouraging picture of financial trends.

Source: Company Information; Leverage Shares analysis

From 2021 through 2025, 2023 was the only bright spot wherein revenue showed marginal improvement over the previous FY mostly on the back of solid sales growth through vans. This slight improvement, however, didn’t buck the trend for the bottom line (i.e. diluted earnings per share or EPS), which has consistently shrunk across this period until the present.

In 2025, while the drop in revenue relative to previous FY isn’t as high as it was in 2022, the drop in Earnings Before Interest and Taxes (EBIT) and Net Profit is far higher than in 2022. As a result, the drop in diluted EPS has been much higher than in 2022 as well. In 2021, diluted EPS stood at € 21.5. In 2025, it’s € 5.34.

Key Takeaways

The results indicate some highly mixed results. The first is that pursuing electrification of Mercedes-Benz’s model catalogue – which management had varyingly mixed sentiments on over the past few years – appears to be a positive development amidst the company’s overall financial challenges. On the other hand, it’s clear that Mercedes-Benz is a victim of several disparate and intersecting headwinds:

There isn’t enough money to go around and its catalogue of decidedly high-end vehicles find its target market shrinking.
Financial Services – which once broadened its customer base by arranging for loans and leases – have seen sustained losses for over five years.
Its big bet was in China, where it had consented to a joint venture unlike in any other market. This market has been in progressively worse condition for three years now.
Investing in plants and equipment to produce modern EVs continue to rise year-on-year and eat into its margins while sales shrink.

Given challenging financial conditions among potential buyers, it’s no surprise that the likes of BYD – wherein models offered are all-electric and often at least € 10,000-15,000 cheaper than the Mercedes-Benz model nearest in price, profile or size – have been making massive inroads at the company’s expense. The way things are, Mercedes-Benz simply hasn’t been able to manage producing cars any cheaper and would likely be wary of dropping the price even if it could as that could impair the brand’s premium image.

These facts are arguably at odds with the company’s share price over the past five years, wherein the current stock price is essentially flat relative to the same period five years ago despite steadily worsening EPS and market share. A major factor behind this is the company’s high dividend payout history, which has often been above 7% since the Daimler Truck spinoff was executed. However, the dividend paid out for 2024 bucked the trend of steadily increasing dividend amounts after the spinoff with a 18.87% decrease relative to the previous year. This downtrend continues in the current earnings release wherein management indicated that it has proposed a dividend of € 3.50 per share. In a bid to support the stock’s valuation, an extension of the share buyback program launched last year has been envisaged and will likely seek approval in the Annual General Meeting in May.

Outside of historically attractive dividend yields, the market trajectory seems to indicate that its investors – mostly Europeans – are likely still hoping for a turnaround and have been reposing their faith in the company by buying the dip over the past five years. However, dips in the stock value have been seen in the past and the quarters going forward would likely be no exception. Whether investors continue to buy the dip in the future, of course, remains a matter of conjecture.

Professional investors in Europe might consider the +3X Long Mercedes-Benz ETP (MBG3) as and when bullish trends are evident in Mercedes-Benz Group’s stock price. To potentially capitalize on trajectories in the German market, the +3X Long Germany 40 ETP (DAX3) and the -3X Short Germany 40 ETP (DAXS) – both of which track the DAX 40 – are at hand.

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