Mercedes-Benz joins a growing list of EU-based automakers publishing their Q1 2024 financial reports today, and the German brand is relaying a similar story of staggering profits.

Mercedes-Benz remains one of the most well-known automakers out of Germany and one of the leaders in luxury vehicles. As an automaker committed to electrification, we’ve seen Mercedes continue to expand its EQ line of BEVs, which now includes a revamped EQS sedan for 2025 (seen above).

The automaker also recently revealed the “G580 with EQ technology” – an all-electric version of the famed G Class, complete with four motors and the ability to complete tank turns (although it seems to have sacrificed Mercedes’ dedication to aerodynamics to stay true to the combustion-clad design that preceded it).

As you’ll see below, EV sales continue to grow in Mercedes-Benz’s portfolio (although there’s a slight catch). Still, the automaker’s Q1 2024 report shows a slight revenue drop and an even more significant gap in other notable categories.

Mercedes-Benz shared multiple detailed reports for Q1 2024 today. Revenues are down, but plenty of other metrics support the German automaker’s confidence that it can maintain its financial outlook for the year.

One of the most notable numbers is Mercedes’ €3.86 billion ($4.18 billion) in earnings before interest and tax (EBIT) in Q1 2024. That number saw a 30% drop compared to Q1 2023 (€5.5 billion). Mercedes-Benz Cars’ EBIT was also down, reporting €2.5 billion compared to €4.1 billion in Q1 2023. Those earnings contributed to an adjusted Return on Sales of 9.0% (down from 14.8% in Q1 2023)

The German automaker cited a temporary decline in volumes and model transitions in its Top-End segment, as well as higher lifecycle management costs to ” keep products at the cutting edge” as the reasoning behind the declining percentages.

Despite negative YOY earnings, Mercedes remains quite liquid on the wings of bolstered free cash flow. Per the release:

The Free Cash Flow from the Industrial Business in the first quarter reached €2.23 billion (Q1 2023: €2.16 billion), supported by an adjusted Cash Conversion rate of 1.0 at Mercedes-Benz Cars. The Net Liquidity from the Industrial Business rose by 6% to a strong and very comfortable level of €33.6 billion (end of 2023: €31.7 billion). This included a share buyback of approximately €300 million in the first quarter. The Group’s investments in property, plant and equipment in the first quarter totaled €0.7 billion (Q1 2023: €0.8 billion). Research and development expenditure fell to €2.2 billion (Q1 2023: €2.5 billion).

Mercedes stated that pricing remained high in Q1 2024, and the automaker has no intention of engaging in any discount wars to stay competitive in the market. Instead, it expects its top-end models to lead sales and help it reach its financial goals for the year as targeted.

Speaking of sales, both BEV and PHEV numbers were down year over year (-2% and -8%, respectively). However, the overall share of EV sales in Mercedes’ portfolio was up in Q1 2024 – 19.5% compared to 18.2% a year ago. Still, it’s important to note that PHEV sales led to those boosted sales percentages, not BEVs.

Looking ahead, Mercedes-Benz believes it can remain competitive in its given segments without folding on price cuts. Per Member of the Board of Management of Mercedes-Benz Group AG, Finance & Controlling/Mercedes-Benz Mobility, Harald Wilhelm:

Mercedes-Benz delivered a solid Free Cash Flow in the first quarter thanks to our disciplined go-to-market approach, our desirable products and despite the volatile economic environment and external challenges. While we remain vigilant about the global macroeconomic and geopolitical outlook, we confirm our full-year financial targets for 2024.

Tesla Megapack has been selected to power a massive new record-breaking 1,3 GWh battery system from Neoen in Australia.

This project is the second stage of the Collie Battery project, which is named after a town in Western Australia where the project is located.

As we previously reported, France’s Neoen is already building the first stage with Tesla Megapack 2XLs.

The first stage consists of 224 Tesla Megapack 2XL units for 219 MW / 877 MWh of capacity.

Today, Neoen announced that it has received a contract for the second stage, which is even going to be bigger. The company wrote in a press release:

Neoen, one of the world’s leading producers of exclusively renewable energy, has been awarded a 300 MW / 4-hour capacity services contract by the Australian Energy Market Operator (AEMO) in a competitive tender initiated by the Western Australian Coordinator of Energy. The service will be delivered by Stage 2 of Collie Battery sized at 341 MW / 1,363 MWh and consisting of 348 Tesla Megapack 2 XL units. The project is located near the town of Collie, on the country of the Wilman people of the Bibbulmun nation, in the Southwest region of Western Australia (WA). It will connect to Western Power’s new Palmer Terminal substation in the South-West Interconnected System (SWIS), a separate network to the one on the eastern coast of Australia.

With 348 Megapack 2 XL units and a capacity of 1.3 GWh, it is expected to become the new largest battery system in Australia and one of the biggest in the world.

Neoen confirmed that it has provided “notices to proceed to Tesla and construction contractor UGL.”

The second stage is expected to be operational in Q4 2025 and provide significant grid services to South-West Interconnected System (SWIS) with the ability to charge and discharge 20% of the average demand of the network.

Electrek’s Take

Despite increased competition, Tesla seems to still have strong demand for Megapack.

A 1.3 GWh project represents more than a quarter of Tesla’s new record-breaking quarterly Megapack deployment capacity.

However, that capacity is increasing fast as Tesla recently disclosed having deployed a new line at its Megafactory in Lathrop and it is also building a new Megafactory in China.

Tesla expects its energy storage business to continue to grow significantly and so far, it is delivering on this expectation.

Volkswagen Group released its financial numbers for Q1 2024 today, following similar trends from other EU-based automakers. The numbers detail a slowing of sales and a drop in profits. Despite a 20% decrease, the Group remains optimistic that it will end the year at its financial targets.

Today’s Q1 2024 report from Volkswagen Group comes with little surprise, as the German automaker already gave the public an idea of its sales woes earlier this month when it shared its delivery numbers.

Deliveries for Q1 were up 3% overall year-over-year, but BEV sales fell. EV sales were up in China (+91% YOY) but stumbled in Volkswagen’s native Europe (-24%) and the US (-16%). It’s top-selling models in the first quarter were the ID.4/ID.5 (34,600 units), ID.3 (26,100), Audi Q4 e-tron (22,800), Skoda Enyaq (14,000), Audi Q8 e-tron (9,600), and VW ID.Buzz (7,000).

At the same time, Volkswagen Group shared that deliveries of Porsche’s lone EV, the Taycan, also fell by 54% in Q1 2024. Still, a bolstered 2025 model year Taycan is on the way alongside several new BEV models from Volkswagen that the auto conglomerate hopes will help it bounce back in 2024.

Today, we got a better idea of VW Group’s Q1 numbers beyond mere deliveries, which includes a 20% drop in profits.

Per a detailed Q1 2024 report released by Volkswagen Group today, it is off to a slower start this year, although the German automaker states it anticipated this dip and relayed confidence going forward. Per VW Group CFO and COO Arno Antlitz:

As expected, our first quarter results show a slow start to the year. We remain confident of achieving our financial targets for 2024. A strong March, the solid order bank and the improving order intake in the past months are encouraging and should already have a positive impact in the second quarter. We expect additional momentum over the course of the year from the launch of more than 30 new models across all brands. At the same time the effects our efficiency programs will gradually unfold as the year progresses. In this context, it will be particularly important to vigorously counteract the increase in fixed costs and exercise investment discipline.

Notable figures include 75.5 billion euros in sales revenue, down from 76.2 billion in Q1 2023. Furthermore, VW Group reports EUR 4.6 billion in operating results, down 20% compared to a year ago with an operating margin of 6.1%. Volkswagen cites “lower sales volumes, an unfavorable country, brand and model mix as well as an increase in fixed costs” as the reasoning behind its negative Q1 2024 results.

In terms of overall sales, Asia-Pacific saw 2% growth while South America recorded record numbers, up 19% year over year. That said, sales in North America were down 10%, followed by the rest of the world at 5%, for a grand total of 2.1 million vehicles sold globally in Q1.

Despite many minuses on its Q1 2024 spreadsheet, Volkswagen Group anticipates a sales revenue increase of up to 5% and an operating margin between 7 and 7.5%, clearing the way for a clean 2024 outlook it remains confident in. Per the release:

In the Automotive Division, the Group assumes an investment ratio of between 13.5 percent and 14.5 percent in 2024. The automotive net cash flow for 2024 is expected to be between EUR 4.5 and EUR 6.5 billion. This will include in particular investments for the future and cash outflows from mergers and acquisitions for the battery business, which are a vital pillar of the Volkswagen Group’s transformation. Net liquidity in the Automotive Division is expected to be between EUR 39 billion and EUR 41 billion in 2024. It remains the Group’s goal to continue its solid financing and liquidity policy.

Challenges will arise in particular from the economic situation, the increasing intensity of competition, volatile commodity, energy and foreign exchange markets, and more stringent emissions-related requirements.