Mercedes Is Pulling The Plug On American EQS and EQE Production

The automotive world has faced simultaneous tsunamis in 2025. Trump administration tariff policies remain unresolved for most of the world, perhaps most notably the European Union. And the Trump administration’s “Big, Beautiful Bill” both ended federal tax credits for electric vehicles and effectively eliminated fines for not reaching CAFE standards. Sweeping policy changes will force sweeping responses from automakers. And we just received confirmation from one such change at Mercedes-Benz.

Mercedes Has Halted US Production Of EQ Models

We spotted huge price reductions for Mercedes EQE and EQS models, some exceeding $15,000 for 2026. Mercedes later confirmed to CarBuzz that the price reduction was not the only change to those models for 2026. Mercedes is closing its US order banks for the EQE sedan, EQE SUV, EQS sedan, and EQS SUV. The brand will fill existing orders before halting production on September 1, 2025. Mercedes is “unable to share a timeline for competitive reasons” for the vehicles’ returning, but these vehicles will stay in production for other markets.

Mercedes-Benz Is Facing Some Broad Challenges In 2025

There may be some headwinds factoring into Mercedes’s decision-making. United States import tariffs are a double-edged sword for Mercedes-Benz. Mercedes imports virtually its entire passenger car lineup to America, which will (unless trade deals are pending) be subject to steep tariffs. The company also builds a large number of SUVs in America for export globally. Those vehicles, normally profit-drivers for the company, could be particularly vulnerable if trade wars lead to retaliatory sanctions against the United States. Those considerations may ramp up the timeframe for underperforming models.

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Revoking the federal EV tax credits may affect Mercedes-Benz less than other manufacturers building more affordable EVs. EQS and EQE models, not to mention the vast majority of buyers who bought them, were priced out of receiving the $7,500 federal tax credit on direct sales. Although the so-called “lease loophole,” where EV leases were counted as commercial purchases (all eligible for a $7,500 tax credit), did allow Mercedes to make leasing the vehicles cheaper than they otherwise would have been.

But This May Just Be An EQ Model Issue For Mercedes

Headwinds or not, Mercedes’s EQ models haven’t been popular. Sales of the EQS sedan and SUV fell 52% year over year in 2024. The more affordable EQE models, down 39% year-over-year, did not fare much better. Mercedes prioritized aerodynamics and range for those models. However, critics have criticized the rounded styling of both vehicle lines, which doesn’t convey a stately, premium, or Mercedes-like feel.

The EQS, in particular, has suffered staggering depreciation numbers, which both disincentivizes luxury EV buyers from choosing an EQS and encourages EQS-inclined buyers to get a considerable discount on the used market. Mercedes is not abandoning EVs in the US entirely.

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Mercedes Slashes EV Prices In The Run-Up To Tax Credits Going Away

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The brand confirmed to Car and Driver that plans for the new CLA electric sedan and GLC electric SUV rollouts for America will proceed as scheduled, with the former arriving later in 2025. Those vehicles could be harbingers of a different Mercedes EV future, featuring hybrid platforms with the flexibility to shift between combustion, hybrid, and all-electric versions of a car, depending on demand.

Source: Car and Driver