On Wednesday, Mercedes-Benz reported it will pause U.S. deliveries of its EQ electric vehicle lineup and reduce prices on several EQ models due to slowing demand and excess inventory at dealerships. The decision follows slowing EV demand and rising dealership inventories, compounded by the recent rollback of federal tax incentives under President Donald Trump’s new budget law.
The German automaker will run down existing inventory while continuing to supply vehicles built at its Tuscaloosa, Alabama, plant. Starting with the 2026 model year, Mercedes will cut the base price of its EQE and EQS sedans and SUVs between 4% and 16%, excluding delivery fees.
Here’s why it matters:
The announcement signals increasing pressures on dealers holding unsold EV inventory, especially as federal tax credits are phased out earlier than expected. Dealers will need to manage price depreciation, adjust sales strategies for premium EVs, and prepare for shifting product mixes, as Mercedes pivots back toward internal combustion engine (ICE) vehicles amid a broader EV market condition.
Key takeaways:
- EQ delivery pause in U.S.
Mercedes-Benz is suspending shipments of its EQ EV range to the U.S. while it clears existing dealership inventory. - Price cuts coming
The automaker plans to reduce the base prices on the EQE and EQS models by 4% to 16%, starting with the 2026 model year. - Made in Alabama
Despite the pause, Mercedes will continue to supply U.S. dealers with EVs produced at its Tuscaloosa plant. - Slower EV demand
Additionally, the decision follows reduced consumer interest and the removal of EV tax credits as part of Trump’s recent federal budget changes. - ICE resurgence
Mercedes plans to launch 19 new combustion engine vehicles and 17 new EVs by 2027, reflecting a more balanced approach after BEV sales declined 25% last year.
