Toronto, Ontario -- A German automaker is stepping back from its electric ambitions, joining a growing list of industry players rethinking their role in the energy transition.
Mercedes-Benz will pause U.S. orders for its EQE and EQS electric models, the company announced this week, citing shifting consumer demand. The freeze applies to the EQE sedan and SUV, as well as the EQS sedan and SUV. While production of these vehicles will continue for other global markets, new orders will no longer be accepted in the United States for the time being. Vehicles already scheduled for production will still be delivered.
In a statement, Mercedes-Benz USA said the decision reflects its response to evolving market dynamics and customer preferences. The automaker emphasized its “local-for-local” production strategy, which allows it to shift manufacturing across more than 30 global facilities, including plants in Alabama and South Carolina. That flexibility is designed to help balance regional demand without disrupting broader operations.
The announcement coincides with sweeping price reductions on the 2026 EQ lineup. The EQE sedan and SUV now start at approximately US$66,100, while the EQS SUV has dropped from around US$106,400 to US$91,100.
This strategic recalibration comes just months ahead of the scheduled end of the U.S. federal EV tax credit. Currently offering up to US$7,500 on qualifying electric vehicles, the credit will expire Dec. 31, 2025, for models not assembled in North America—prompting automakers to adjust pricing, supply and model availability in anticipation.
Mercedes-Benz’s move echoes concerns raised earlier this year by Ontario’s Auto Mayors. The group, representing 22 Canadian municipalities, urged federal regulators to adopt more flexible EV transition policies. Citing uncertain demand and infrastructure challenges, it advocated for the inclusion of hybrid vehicles in regulatory targets—a position gaining traction as global automakers re-evaluate their electrification rollouts.
The Canadian Automobile Dealers Association has echoed those concerns in a national petition, calling on Ottawa to revise its zero-emissions vehicle mandate. The group warned the current targets could negatively impact both dealers and consumers if left unchanged.
