"Electric Vehicle Price Reduction Competition... Mercedes-Benz Cries Out 'At This Rate, Everyone Will Fail'"

"Severe Price Competition Leads to Market Slump"
"Unsustainable... It Has Become a Brutal Market"

Mercedes-Benz, a leading German automaker group, has issued a warning about the price-cutting competition among electric vehicle companies. They claim that the current price competition is close to 'cutting one's own flesh' and could potentially have a negative impact on the entire industry.

On the 26th (local time), according to the US financial media 'CNBC' and others, Harald Wilhelm, Chief Financial Officer (CFO) of Mercedes-Benz, stated at an analyst briefing held that day, "The market environment has stagnated due to severe price competition," and "We are witnessing competitors lowering product prices to nearly one-third of their original levels."

CFO Wilhelm pointed out, "Some companies are selling electric vehicles at prices lower than existing internal combustion engine vehicles despite high production costs." In other words, some companies are engaging in a cutthroat competition by sacrificing profits to sell electric vehicles.

He added, "It is hard to imagine that the current situation is sustainable for everyone," and described the electric vehicle market as "quite brutal."

On the morning of August 24th, electric vehicles were displayed at the "All-Electric Showcase and Press Conference" held by Mercedes-Benz Korea at the Shilla Hotel in Jung-gu, Seoul.
[Image source=Yonhap News]

The stock price of Mercedes-Benz, listed on the Frankfurt Stock Exchange in Germany, temporarily fell by 5.7% that day, marking the worst level since May 4.

The reason for the poor performance of Benz's stock price is due to low earnings. The company's earnings before interest and taxes (EBIT) for the third quarter decreased by 7% to 4.8 billion euros (approximately 6.8 trillion won). Revenue also fell by 5% to 37.2 billion euros (approximately 53 trillion won), falling short of market expectations.

Mercedes-Benz has established an 'electric vehicle transition strategy' to increase global sales of hybrid and battery electric vehicles to 50% by 2025, and thereafter to release only electric vehicle models.

However, the price-cutting competition among electric vehicle makers that began this year appears to have dealt a direct blow to corporate earnings. Tesla fired the first shot in the price competition. Tesla has cut vehicle prices several times this year. In response, American automakers such as Ford began lowering car prices, and the ripple effect seems to be affecting other global automakers as well.

However, the main cause of the price-cutting competition is not Tesla but Chinese electric vehicles. Tesla maintained the number one global electric vehicle market share two years ago but lost the top spot last year to the explosively growing Chinese company BYD.

Chinese electric vehicle companies, including BYD, are using price competitiveness as a weapon to drive out foreign companies in the Chinese domestic market and are now targeting export markets.

This content was produced with the assistance of AI translation services.