Mercedes global sales passed by Tesla for the first time in a quarter
- Matthias Schmidt
- 4 days ago
- 2 min read
Mercedes-Benz AG passenger cars saw Tesla volumes outpace them for the first time on record over a quarterly period during Q3 2025 as Mercedes returned its worst delivery quarter since COVID.
- Tesla benefited from a pull-forward in its domestic US market as a consequence of the end of US Federal tax credits for EVs from October 2025.
- On a 12-month trailing basis, Tesla still trails Mercedes by just below 150,000 units.
- Mercedes recorded its worst quarter in volume terms since COVID/semiconductor-impacted Q3 2021.
- A results presentation which singles out the positive performance of the Gulf markets in the first paragraph, as was the case with Mercedes' Q3 results, isn't necessarily sending an overwhelmingly reassuring message!
- A devastating 27% Q3 Y/y fall across China indicates where the losses are largely stemming from, while a 17% drop across the US during the same quarter on a year-on-year basis is only likely to get worse as new tariffs are introduced.
- The pivot from premium volume to just premium appears to have hit a roadblock as CEO Ola Kaellenius appears to be scrambling back to gain more scale again, hinting recently about another entry-level model. So-called higher volume entry level models saw volume fall by 12%y/y this year, while higher margin top-end models saw volumes remain stable this year. Meanwhile BMW delivering its Q3 results on the same day witnessed its 12-month rolling totals remain stable under a challenging global business environment.
BMW Group reduce volume expectations for the Chinese market in the fourth quarter
BMW Group volumes are also even more impressive, given the current state of its product cadence, with Neue Klasse models underpinning BEVs and ICE models being rolled out from 2026, effectively replacing older generation models. However after the market close on Tuesday evening BMW Group issued a statement stating that the targeted volume growth in China remained below expectations. Going on to say that on that basis, they have decided to reduce volume expectations for the Chinese market in the fourth quarter. Additionally, noting that the impact of a significant reduction of commissions from local Chinese banks to dealerships in connection with the brokering of financial and insurance products to end customers requires financial support to strengthen dealer profitability. Furthermore, the note continues to point out that some of the Bavarian company's assumptions on tariff reductions made at the time of the H1 results have not been fully realised, however, they maintain the assumption that the EU will implement the agreement with the US on reduction of tariffs from 10% to 0% on the import of vehicles and auto parts into the EU effective 1st August. In view of those additional factors weighing on profit, BMW Group assumes the Auto EBIT margin for 2025 will remain in the guided corridor of 5% to 7%, more specifically in the range of 5% to 6%.
Note: BMW data in the infographic doesn't include MINI.
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Source: Schmidt Automotive Research / OEM data
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*Western Europe 18 Markets: EU Member States prior to the 2004 enlargement plus EFTA markets Norway, Switzerland, Iceland, plus UK
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