Mercedes' mixed bag: Upbeat Q2 results come as German automaker could face US sales ban

Mercedes' mixed bag: Upbeat Q2 results come as German automaker could face US sales ban

Pras Subramanian · Senior Reporter

Tue, July 28, 2026 at 7:32 PM GMT+3 3 min read

• MBG.DE +2.88%
• MBGAF +2.51%

Mercedes-Benz (MBG.DE) reported decent results on Tuesday, highlighting strength in its core business but continuing weakness in China. The report comes as the German automaker's US business is under threat of a ban due to ownership stakes by Chinese companies.

In the second quarter, Mercedes reported passenger car revenue of 22.99 billion euros ($26.18 billion), down 5% compared to a year ago, with adjusted EBIT coming in at 909 million euros ($1.035 billion), down 26% year over year.

But its adjusted return on sales (similar to EBIT margin) in the car unit fell slightly to 4% from a year earlier, beating analyst expectations, per Bloomberg.

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Mercedes stock trading in Germany pulled higher on the results.

But the good news in its operations comes at a tricky time for Stuttgart-based Mercedes.

A bill from Senators Bernie Moreno (R-Ohio) and Elissa Slotkin (D-Mich.) to ban the sale of connected vehicles with Chinese control passed through its committee vote, clearing the path for a full Senate vote.

The senators' bill would prohibit the import, sale, and operation of vehicles manufactured in China — or any other country of concern — and ban the use of Chinese-developed connected vehicle technologies, such as software and data systems, on American roads.

Mercedes shareholding by Chinese entities is almost 20%, crossing the 15% threshold. China's BAIC Group currently holds 9.98% of the company's voting rights, making it Mercedes' largest individual shareholder. Billionaire Li Shufu, founder and chair of Geely, holds a 9.69% stake in Mercedes through his Tenaciou3 Prospect Investment Limited.

If passed, the bill would ban the sale of vehicles like Mercedes-connected cars starting in 2027.

In a statement to Yahoo Finance, Mercedes defended its structure, noting it wasn't under any foreign control:

"No shareholder holds more than 10 percent of our stock, and our major shareholders are not directly represented on the Supervisory Board or have any control or decision-making authority when it comes to the company and its operations. Those decisions are made solely by the Board of Management of Mercedes-Benz."

The company added that it is committed to ensuring any new legislation does not impact its operations and that it will continue to "safeguard" its employees, dealers, suppliers, and other workers in the US. The company noted that it is directly and indirectly responsible for 160,000 jobs in the US, has plants in Alabama and South Carolina, and has invested $1 billion annually over the past few years.

While there is a long way to go before this bill becomes law, and lawmakers like Senator Ted Cruz (R-Texas) have said it should not punish automakers like Mercedes, the threat is real for Mercedes, with US sales accounting for 20% of its global total.

Incidentally, in Q2, Mercedes' China business deteriorated, with sales down 30% from a year ago, necessitating a 704 million euro write-down on its operations and business there.

Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.

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