German luxury carmakers just got steamrolled. Trump-era tariffs are still biting. EV demand is soft. China is turning away. Even with a draft trade deal in the works, the earnings bloodbath is already here.
Mercedes collapsed first.
“Revenue fell 10 % to €33.15 billion ($38.82 billion), and adjusted EBIT dropped 68 % to €1.273 billion ($1.47 billion). Net profit fell nearly 70 % to €957 million ($1.1 billion) in the quarter”
https://finance.yahoo.com/news/trade-deal-aside-mercedes-and-porsche-see-more-tariff-pain-on-the-way-162251235.html
“A dynamic market environment, volatile tariff policies, challenging competition, particularly in China, and upcoming model changes impacted sales development,” the company said
https://finance.yahoo.com/news/trade-deal-aside-mercedes-and-porsche-see-more-tariff-pain-on-the-way-162251235.html
Tariffs alone chewed up €362 million. That’s about 150 basis points in lost margin
https://www.reuters.com/business/autos-transportation/mercedes-benz-trims-profit-margin-forecast-us-tariff-impact-2025-07-30/
Then came Porsche.
“Operating profit collapsed 91 % year-on-year in Q2, down to €154 million. Group EBIT down 67 %. Revenue down 21 %”
https://www.reuters.com/business/autos-transportation/porsche-trims-outlook-tariffs-add-storm-challenges-2025-07-30/
“Tariff charges totaled €400 million in the first half,” and the company hiked U.S. prices 2.3 % to 3.6 % just to stay afloat
https://www.reuters.com/business/autos-transportation/porsche-aston-martin-hike-us-prices-hopes-tariff-sweeteners-fade-2025-07-30/
Executives admitted the storm is far from over. “We continue to face significant challenges around the world. And this is not a storm that will pass”
https://www.reuters.com/business/autos-transportation/porsche-trims-outlook-tariffs-add-storm-challenges-2025-07-30/
Even luxury customers are pulling back. China orders slowed. U.S. buyers are balking at higher sticker prices. Incentives are not working. Model redesigns are delayed or pulled.
The result is a cratered quarter. EV growth has not picked up the slack. European factories are slashing shifts. Supply chain issues are secondary now. It is demand. And price shock. And policy whiplash.
If this is what a trade “thaw” looks like, Q3 could be worse.