Mercedes-Benz cuts price of EQE, EQS electric models in China

Mercedes-Benz said it had cut prices on some of its EQE and EQS models in China from Wednesday, citing changing market demand for top-end electric vehicles.

Foreign carmakers are struggling to break into China's electric vehicle market, with only Tesla achieving higher sales figures.

Luxury car manufacturer Mercedes-Benz said in a statement late on Tuesday that the retail price (MSRP) for the EQE crossover vehicle was cut by 9% and the luxury EQS limousine's price by 11-22% .

"The Top-End electric vehicle segment in China is still evolving ... Mercedes-Benz is repositioning certain EQ models in China," a spokesperson said.

The premium carmaker will offer subsidies through dealers to buyers who purchased those cars before the adjustments.

At 0958 GMT, Mercedes-Benz shares were down 5.34% from Tuesday's close.

The carmaker had not expected soaring sales in China for the EQS, whose design was geared more towards European and U.S. customers who prefer a flatter, aerodynamic form, a source close to the company said.

It had higher hopes for the EQS-SUV which was better suited for Chinese high-end customers who are likely to be driven by a chauffeur and so prefer more space and headroom in the back, the source, who declined to be named, added.

Mercedes-Benz sold 11,327 electric cars in China from January to August, according to the China Passenger Car Association, compared with Tesla, which sold almost 400,000, and China's BYD, which sold nearly a million.

Tesla also cut prices in China by up to 9% in October for the first time this year, after Chief Executive Elon Musk said a "recession of sorts" was underway in China and Europe.

Industry-wide sales are expected to slow into 2023, according to China Merchants Bank International, with some analysts expecting a price war.