Internal EV Doubts Rise as Mercedes-Benz Ramps Up Hungary Plant and Sticks to 2026 Guidance
Published on 07/17/2026 at 16:16 | Redaktion boerse-global.de
A curious split is emerging inside Mercedes-Benz. The company has just invested €1 billion to expand its factory in Kecskemét, Hungary, where production of the electric C-Class (W520) kicked off on July 13. Yet behind the scenes, a senior manager has admitted that one of the group’s most expensive electric projects — the AMG GT 4-Door — "should never have existed". The development bill for that model alone topped $1 billion, according to the same insider.
The contrasting signals come just as Mercedes-Benz reaffirms its full-year target of a 3 to 5 percent return on sales. At the same time, the broader market is keeping its distance. The stock closed on Thursday at €45.80, up 3.74 percent on the week but still 26 percent below the 52-week high of €62.30 reached on December 15. Since the start of 2026, the shares have lost around 25.7 percent of their value.
That depressed valuation has caught the eye of some analysts. A Handelsblatt analysis published on July 16 put the price-to-earnings ratio at just 7.1, while the dividend yield stands at 7.8 percent. Simply Wall St calculates a fair value of €59.69, implying the equity is more than 23 percent undervalued. On the other hand, the firm’s heavy spending on electrification and AI integration, combined with persistent headwinds in China, are flagged as material risks.
Analyst opinions are decidedly mixed ahead of the July 28 second-quarter results. Jefferies expects the van segment to perform at the top of its 8–10 percent growth corridor, and the automotive margin to land within the guided 3–5 percent range — at the upper end. RBC’s Tom Narayan shares that view, but his firm rates the stock only "Sector Perform", a neutral call. Goldman Sachs maintains a buy rating while trimming its price target from €66 to €65. The Deutsche Bank’s Tim Rokossa is the most bullish, sticking with a buy and a €74 target, pointing to the Hungary expansion as proof that low-cost production is a strategic priority. Bernstein holds at "Market-Perform" with a €61 target.
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The operational push is unmistakable. Production of the electric C-Class with a 762-kilometre WLTP range, a 94-kWh Samsung SDI battery, and 330 kW DC charging has started in Kecskemét. Capacity at the site is slated to rise from 100,000 to 350,000 vehicles a year, and the workforce from its current level to 9,000–10,000 employees. European customers should receive the C400 4Matic still in 2026; the US gets it in early 2027. Meanwhile, the world premiere of the new GLA EQ will take place in Warsaw on July 29, with order books opening for the GLA 250+ EQ and GLA 350 4Matic EQ later that same month. The range will top out with the GLA 45 S 4Matic EQ, a 680-horsepower triple-motor variant that reaches 100 km/h in three seconds.
Yet the internal criticism casts a shadow over the electric offensive. The aforementioned manager told Manager Magazin that the electric AMG GT 4-Door should never have reached production, but was too far along to cancel. Sales of the EQ family collapsed by 90 percent in 2024, and the EQS and EQE SUV are being called the biggest flops in company history. Responsibility is said to lie with CEO Ola Källenius, who is accused of chasing a Tesla-like valuation while neglecting product-market fit. The group’s response includes a low-cost electric CLA priced under $50,000 for the US, and a luxury van aimed at the American market.
The wider auto industry is going through a wrenching transformation. According to the Federal Employment Agency, German manufacturing lost 177,000 social-security-paying jobs within a year. Automotive alone shed 52,000 positions, followed by mechanical engineering (28,000) and metals (24,000). Among Germany’s three big carmakers, combined net profit fell from €48 billion in 2022 to €19.8 billion in 2025 — a 59 percent drop. Dividend payments have shrunk from €15.4 billion to €8.6 billion over the same period.
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Against that backdrop, Mercedes-Benz is attempting an expensive balancing act: ploughing billions into new platforms and plants while maintaining a shareholder-friendly payout. The market will get its next look at the books on July 28, followed a day later by the GLA EQ reveal in Warsaw. For now, the shares are caught between bullish long-term bets on Hungary’s cost advantage and a palpable scepticism that some of the group’s own executives now seem to share.
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