German car manufacturer Mercedes-Benz reported its poorest annual results since the COVID-19 pandemic on Wednesday, with a net profit of 5.3 billion euros, equivalent to nearly 40 billion Danish kroner, for the year 2025. This marks a dramatic decline of almost 49% compared to 2024, as stated by the automotive giant. The company attributed this downturn primarily to American tariffs and fierce competition in the Chinese automotive market, which significantly impacted its financial performance despite the outcomes being better than analysts' expected estimates gathered by financial data company FactSet.

CEO Ola Källenius commented on the results, indicating that they remained within the manufacturer’s own forecasts. He emphasized the company's ongoing commitment to moving forward with a clear strategy and highly competitive product portfolio. Källenius shared optimistic news regarding future prospects, noting that Mercedes plans to launch over 40 new models in the next three years, suggesting a potential rebound for the brand amidst its current challenges. The company maintains that these new launches could lead to an improvement in its market position and profitability.

Overall, despite the setback in profit margins, Mercedes-Benz is optimistic about the future, armed with a robust plan for new model releases aimed at enhancing its global competitiveness. The current situation reflects broader market pressures that many automotive manufacturers face, highlighting the need for innovation and strategic adaptation in response to evolving consumer demands and regulatory challenges.