Mercedes-Benz says it is pausing orders for its electric vehicles as demand wanes among American drivers.
A spokesperson for the German automotive company told Business Insider the decision affects all variants of the EQS Sedan, EQS SUV, EQE Sedan, and the EQE SUV. Vehicles that were scheduled for production before September 1 will still be delivered.
“As a company with global activities and more than 30 plants worldwide, including in Alabama and South Carolina, Mercedes-Benz continuously optimizes its production network and uses its high flexibility to react quickly to market conditions,” the spokesperson said. “We continue to assemble all of our models meant for export to global markets, as well as adapt to meet local market demand.”
The spokesperson said it cannot say when US order banks for EQ models will reopen “for competitive reasons.”
In its Q2 earnings report on Wednesday, Mercedes-Benz said the total unit sales for its battery electric vehicles (BEV) had slipped by almost 25% compared to the same time last year: 45,843 units to 35,027 units.
In 2022, Mercedes-Benz began manufacturing two all-electric vehicle models — the EQS SUV and EQE SUV — at its Alabama plant. In 2023, it also added the Mercedes-Maybach EQS SUV.
The company’s decision to pause orders comes after President Donald Trump’s spending bill, which he signed into law this month, eliminated the $7,500 tax credit for new electric vehicles. Industry experts previously warned that axing the tax incentive could make EVs unaffordable, affecting companies like Tesla, Cadillac, and Chevrolet. The tax incentive will end on September 30.
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EV sales in North America rose just 5% in the first four months of 2024, compared to 25% in Europe and 35% in China, according to EV research firm Rho Motion.
During Wednesday’s earnings call, a Mercedes-Benz Group representative said he thinks American interest in electric vehicles will rebound over time.
“In spite of the announcement that they would take the 7,500 credit away, we don’t believe that the BEV demand in the United States goes to zero,” he said. “We still think that the medium to long-term adoption rate of BEVs in the US will creep upward. Maybe it will creep upward slower than if the previous regulatory trajectory had been kept in place, but nevertheless, we believe in the mid to long term it will creep upward.”