economy

February 12, 2026

Mercedes hit by $1.2 billion in tariff costs as full-year earnings more than halve

German luxury car manufacturer Mercedes-Benz Group on Thursday reported a steep drop in full-year profit and warned of challenging times ahead.

Mercedes hit by $1.2 billion in tariff costs as full-year earnings more than halve

TL;DR

  • Full-year operating profit for 2025 dropped 57% to 5.8 billion euros, missing analyst expectations.
  • Factors influencing the profit decline include foreign exchange headwinds, competition in China, and 1 billion euros in tariff costs.
  • Mercedes-Benz plans further cost cuts and product launches in 2026, with a projected adjusted return on sales of 3% to 5% for Mercedes-Benz Cars.
  • Revenues are expected to remain at the prior-year level, while group EBIT is anticipated to be significantly above the previous year.
  • Group free cash flow for the industrial business is projected to be slightly below the 2025 level.

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