Mercedes-Benz Group AG (OTC:MBGAF) (OTC:MBGYY) has scaled back EV sales in the U.S. and stopped taking new orders, citing low customer demand.
What Happened: The decision affects all variants of the EQS Sedan, EQS SUV, as well as the EQE Sedan and SUV, Business Insider reported on Thursday.
Citing a spokesperson for the German automaker, the report suggests that the decision comes after sales for the EVs fell over 25% YoY in the U.S. to 35,027 units compared with last year's 45,843 units.
The automaker has a plant in the state of Alabama as well as one in South Carolina. Mercedes manufactures the EQS and the EQE SUV in Alabama. The report also suggests the company hasn't yet disclosed when orders will be reopened.
During an earnings call with the investors, officials from Mercedes-Benz said that the Trump administration's decision to take away the $7,500 federal EV credit won't have an adverse impact on EV demand as a whole.
"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," an official said, adding that the demand may creep upward more slowly than expected.
Why It Matters: The news comes as EV sales in the U.S. shrank 6% and fell behind other regions like China, where sales grew 24% in June as the Trump administration announced the axing of EV-related incentives.
Companies like Panasonic Holdings Corp (OTC:PCRFF) (OTC:PCRHY) also scaled back plans to ramp up operations at its battery manufacturing facility, citing poor sales in the U.S. experienced by its client, Tesla Inc. (NASDAQ:TSLA).
In a series of pro-gasoline decisions, the Trump administration also announced a proposal to rescind the 2009 Endangerment Finding, which has been used as a basis for many emissions norms currently in place.
Repealing the finding could leave no legal pressure on automakers to maintain emission standards, as well as relaxing the CAFE or Corporate Average Fuel Economy norms could relieve pressure on the companies to invest in electric vehicles.
Elsewhere, the Trump administration reached a deal with the European Union, with the U.S. imposing 15% tariffs on goods imported into the country from the EU, lower than the 30% tariffs supposed to kick in from August 1.
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