Two-Front Regulatory Squeeze Punishes Mercedes-Benz Stock as Shares Plumb New Lows

Mercedes-Benz finds itself caught in a vice tightening from both sides of the Atlantic. The Stuttgart-based carmaker’s shares sank to a fresh 52-week trough of €47.17 on Monday, as a US House committee approved draft legislation that could ban vehicle production and sales by any manufacturer more than 15% owned by “adversary states”. With roughly a fifth of its equity in Chinese hands — BAIC holds nearly 10% and Geely chairman Li Shufu another 10% — the threat is existential for Mercedes’ lucrative Alabama plant, which churns out the GLE and GLS best-sellers.

The political storm from Washington landed as the EU Minister Council met Tuesday to discuss the proposed “Clean Corporate Vehicles Regulation”. The Brussels plan would mandate that from 2030 all new company cars be emission-free, and as early as 2028 restrict state subsidies to pure electric fleet vehicles. The VDA, Germany’s auto industry association, has pushed back hard: president Hildegard Müller argues that inadequate charging infrastructure and high electricity costs make such a forced shift counterproductive.

The regulatory one-two hits a company already bleeding profits. First-quarter earnings for German automakers collapsed 23% year-on-year, while revenues slid 4%, according to EY. The consultancy’s data show the average operating margin among the world’s 19 largest car groups shrank to 3.5% — the lowest since 2020. Chinese sales, once the industry’s growth engine, plunged 16% for German brands. EY analyst Constantin M. Gall predicts another “year of crisis” for the sector.

Should investors sell immediately? Or is it worth buying Mercedes-Benz?

Amid the gloom, a glimmer of hope flickers in China itself. Mercedes opened order books for the new all-electric GLC on June 5, a mid-size SUV built on an 800-volt architecture and priced from around $51,300. The board is betting the model can stabilise sales in the world’s most important electric-vehicle market, where demand has flagged badly.

The company’s recent €2 billion share buyback, which ran from November 2025 through June 2026, did little to arrest the slide. Mercedes repurchased 37.6 million shares at an average price of €53.19 — roughly 11% above Monday’s closing level of €47.72, down 1.01% on the day. The stock now sits 23.41% below its 52-week high of €62.30 and a full 14% shy of its 200-day moving average of €55.43.

Technical indicators underscore the damage. The relative strength index has fallen to 33.6 from 35.5 a week earlier, pushing deep into oversold territory. Yet the political risk from Washington — together with the EU’s regulatory push — is preventing any sustained recovery. The stock has lost 21.82% since the start of the year, after shedding 6.68% in the prior week alone. At €48.20 the previous close, shares were still clinging above the then-52-week low of €47.66, a level that has now been breached.

Even a bright spot on the Formula One grid — 19-year-old Kimi Antonelli’s fifth consecutive win, in Monaco, putting Mercedes 66 points clear of Ferrari in the constructors’ standings — has failed to divert investor attention from the regulatory headwinds. With the EU Minister Council’s progress report still pending, the only certainty for now is that the pressure shows no sign of easing.

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