Mercedes to Pause EQE and EQS U.S. Production as Tax Credits Expire

Mercedes-Benz will halt production of its EQE and EQS electric sedans and SUVs in the United States market starting September 1, 2025. The move aligns with the end of federal EV tax credits on September 30 and reflects what the automaker describes as a response to changing market conditions.

Sluggish sales and design criticisms

The production pause affects all U.S. and U.S.-bound EQE and EQS models, including their SUV variants. Vehicles already scheduled before the deadline will still be built. Mercedes-Benz confirmed that U.S. dealers have been notified, and order banks are now closed, according to Inside EVs. 

While the company hasn’t disclosed when production might resume, it has acknowledged that its global plant network gives it the flexibility to react quickly to market conditions.

“As a company with global activities and more than 30 plants worldwide, including in Alabama and South Carolina, Mercedes-Benz maintains a local-for-local strategy. In doing so, we continuously optimize our production network and use its high flexibility to react quickly to market conditions,” a spokesperson from Mercedes-Benz USA said.

A pivot towards familiar (electric) models

The EQE and EQS struggled to resonate with U.S. buyers, with sales of the EQS sedan and SUV down 52% in 2024. Reviewers often criticized their design and perceived lack of luxury compared to Mercedes’ gasoline-powered models. Though the vehicles offered impressive range, their streamlined, minimalist styling was seen by many customers as a misstep.

Mercedes is now pivoting to electric versions of its core nameplates, such as the G-Class with EQ Technology, CLA, and GLC. The company recently unveiled a new electric CLA-Class sedan and wagon, and a GLC SUV is expected in late 2025 or early 2026.

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