Mercedes-Benz Strikes a Cautious Note: Legal Relief and Hungary Expansion Counterbalance China Slump and EV Backlash
Published on 07/18/2026 at 18:14 | Redaktion boerse-global.de
Mercedes-Benz is navigating one of its most contradictory chapters in years. A British court has thrown out the majority of diesel-related claims in a class-action lawsuit, offering the Stuttgart-based automaker a measure of legal relief, while a €1 billion investment in its Hungarian plant in Kecskemét signals a strategic tilt toward lower-cost production. Yet these bright spots come against a backdrop of a 30% plunge in Chinese passenger-car sales during the second quarter and unusually candid internal criticism of the company’s electric-vehicle strategy.
The London High Court ruling on July 10, which was made public a week later, dealt a substantial blow to allegations that Mercedes-Benz installed illicit diesel-emission defeat devices. The decision does not fully close the door on the proceedings, but it eases the threat of billions in potential damages that have loomed over the company for years. The stock responded positively, contributing to a 3.08% weekly gain, though the immediate daily move was a modest 0.67% decline to €45.51.
On the operational front, the picture is more mixed. Mercedes-Benz delivered 511,900 cars and vans in the second quarter of 2026, a 6% year-on-year drop. The primary culprit was China, where passenger-car sales collapsed by 30%, underlining the persistent weakness in the world’s largest auto market. The electric-vehicle segment offered a partial offset: global sales of battery-electric models hit 63,000 units, demonstrating that not all product lines are suffering equally. Analysts have nonetheless struck a cautiously optimistic tone, citing potential improvements in profitability and free cash flow. They see the van division as a key pillar, with growth rates at the upper end of an 8% to 10% range, while the automotive margin is expected to hover between 3% and 5%. Several strategists have nudged their price targets higher, arguing that the market is underpricing the company’s earnings power.
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The boardroom is not without its own fissures. A report from Manager Magazin quoted an internal manager as describing the electric AMG GT with four doors as a model that “should not exist,” while putting the development cost of the AMG EV lineup at roughly €1 billion and the EQS/EQE SUV program at a further €5 billion. The same source labelled those programmes “the biggest failures in the company’s history.” The criticism cuts against the grain of chief executive Ola Källenius’s push to catch up with Tesla and Chinese rivals. At the same time, the company is demanding that its German workforce accept a 40-hour week without extra pay, a move that has drawn sharp rebukes from the IG Metall union and echoes broader cost pressures across the industry. The Hungary expansion, which raises headcount at Kecskemét to around 4,500, is being framed by critics as a direct threat to domestic jobs and brand value.
For investors, the contradictions are reflected in the share price. At €45.51, the stock has lost 24.24% since the start of 2026 and sits nearly 27% below its 52-week high of €62.30, reached last December. The interim results for the second quarter are due at the end of July and will be the first test of whether the van-driven tailwind and legal reprieve can offset the damage from China and the self-inflicted wounds of an EV strategy under fire.
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