(Zero Hedge)—Mercedes-Benz Group and Porsche have both reported earnings, and the outlook is grim. Both German luxury automakers slashed full-year profit guidance, citing a double hit from President Trump’s ongoing trade war and an intensifying EV price war as China floods the world with low-cost vehicles.
Mercedes-Benz warned that full-year revenue will slide below last year’s levels, citing steep U.S. tariff-related headwinds impacting car and van sales. The automaker said it could no longer provide financial guidance with the required level of certainty due to ongoing trade uncertainty. It now expects car sales in 2H25 to remain in line with the first-half performance.
Due to a combination of soft unit sales, weaker-than-expected pricing, and import tariffs, Mercedes-Benz was forced to lower its return-on-sales outlook for its auto division to 4%–6%, down from the 6%–8% guidance issued at the start of the year.
Porsche is under financial pressure from weakening EV demand, declining sales in China, and rising U.S. tariffs. CEO Oliver Blume has warned employees of upcoming cost-cutting measures. The company flagged that its return on sales could drop to 5%, down from a previous forecast of 6.5%, and projected a $1.5 billion hit from U.S. tariffs.
“We continue to face significant challenges around the world,” CEO Blume said. “And this is not a storm that will pass.”
Also on Wednesday, Aston Martin Lagonda Global Holdings Plc revised forecasts lower, one day after Stellantis NV warned that U.S. tariffs would weigh on Jeep maker’s struggling North American business. Let’s not forget that Volvo scrapped its guidance and reported an impairment of around $1.2 billion.
The series of dismal earnings reports from European automakers comes after the U.S. and European Union on Sunday agreed on a trade deal that will apply 15% on EU autos shipped to the U.S. That marks a drop from 27.5% since April but a massive increase from 2.5% before Trump’s second term.
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