Product Strategy and Innovations
At Auto Shanghai 2025, Mercedes-Benz presented the CLA Long Wheelbase (WLTP range: over 860 km) as a China-specific electric vehicle, along with the Vision V, a luxurious sedan concept focused on maximum comfort and digital experiences. The latter demonstrates the company’s vision for chauffeur-based premium mobility, combined with AI-supported infotainment solutions – here, Mercedes collaborates with ByteDance (parent company of TikTok).
Investments and Production Expansion
Mercedes plans to invest an additional 14 billion Yuan (≈1.93 billion USD) in new technologies, products, and local manufacturing capacities. This includes the introduction of a new vehicle architecture for vans in Fujian province, highlighting China’s importance as a global innovation hub.
Market Challenges
Despite the commitment, Mercedes recorded a sales decline of 10% in China in Q1 2025 (152,800 vehicles). The reason is increasingly competitive local manufacturers like BYD or NIO, who are catching up technologically in the electric vehicle sector.
Geopolitical Positioning
Källenius advocates for balanced EU tariffs on Chinese electric vehicles to avoid trade conflicts. At the same time, he emphasizes the long-term partnership with the Chinese government – including discussions with Trade Minister Wang Wentao and Party Secretary Yin Li.
Impact on Stock Price & Market Position
The strategy could have the following medium-term effects:
| Factor | Opportunities | Risks |
|---|---|---|
| Localization | Higher margins through cost efficiency | Dependence on Chinese politics |
| Technology Partnerships | AI advantage through ByteDance partnership | Data regulation conflicts |
| EU-China Trade | More stable supply chains with compromises | Tariff escalation impairs exports |
The successful implementation of these plans is crucial, as China already accounts for over a third of global Mercedes sales and has become a test market for autonomous driving. If the company fails to keep up technologically despite investments, it risks further loss of market share to local players – which would have immediate effects on valuation metrics such as EBIT margins.