Mercedes and Porsche Face Ongoing Tariff Pain Despite Trade Deal Progress

German automakers Mercedes and Porsche continue to grapple with financial strain from U.S. tariffs and shifting consumer preferences, despite signs of a preliminary trade deal. Mercedes reported a 10% revenue drop to €33.15 billion in Q2, with adjusted EBIT plunging 68% to €1.273 billion. Net profit fell nearly 70% to €957 million.

The company cited volatile tariff policies, fierce competition in China, and upcoming model changes as key challenges. Mercedes now expects 2025 revenue to land "significantly below" prior-year levels, revising its auto division's return on sales forecast down to 4%-6% from 6%-8%.

CFO Harald Wilhelm revealed tariffs are costing the company mid-triple-digit millions per quarter, with a projected 150 basis-point margin impact this year. The second half is expected to bring even greater tariff-related pressures.