Mercedes-Benz has formulated a business model for the next few years that rests on three pillars: high-end automobiles, electric-only vehicles, and a focus on China. The latest business figures show that the group made a profit before taxes of 20.5 billion euros in 2022, suggesting that the business model is successful. However, there is a concerning issue that has emerged: Mercedes' all-electric models are not selling well in China. According to Handelsblatt, the market share of battery electric vehicles (BEVs) in China is only 0.3 percent, which is a significant problem. If Mercedes cannot sell more electric cars in China, it could have a devastating effect on the company's future plans.

Despite this issue, Mercedes' business in China overall is doing well. The company sold 751,700 cars in China in 2022, which is more than a third of its global sales. Moreover, electric cars are generally popular in China, with around 5.7 million units of all brands sold in 2022. However, while combustion models from Mercedes-Benz are selling well in China, the all-electric vehicles in the Mercedes EQ family are not. With a market share of only 0.3 percent, Mercedes would have sold around 17,000 BEVs in 2022. In contrast, Tesla and Chinese e-car models are performing much better than Mercedes-Benz, as are Porsche, BMW, and Audi, all of which are struggling with their electric cars in China.

The reason for the low sales of Mercedes' electric cars in China appears to be the high prices of its EQ models. In November 2022, Mercedes tried to address this issue by significantly reducing the sales prices of its EQ family models, with prices for the EQS reduced to the equivalent of up to 31,750 euros. The current situation highlights the risks of Mercedes' strategies in China and with its electric-only luxury vehicles, as demonstrated by the low sales figures.