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Mercedes Will Pause EQ Production For America Right As The EV Tax Credits End

Mercedes-Benz says it is "react[ing] to market conditions," but more EVs like the CLA-Class and GLC-Class are coming soon.

• Mercedes-Benz USA has confirmed that U.S. and U.S.-bound production of its first-generation EQ cars will pause on Sept. 1.
• That includes the EQE and EQS sedans and SUVs, and all of their variants. More next-generation EVs are still coming from Mercedes.
• The EQ cars failed to find a wider audience and their designs were often criticized. Their production end coincides with the end of EV tax credits in America.

That's a wrap for Mercedes-Benz's EQ family of electric vehicles in America. At least, for now.

A Mercedes-Benz USA spokesperson confirmed to InsideEVs that the German automaker will temporarily pause production of all variants of its EQE and EQS sedans and SUVs in the U.S. and bound for the U.S. on Sept. 1. Dealers have been notified that order banks for the cars are now closed as well.

"Vehicles scheduled for production prior to Sept. 1 will continue to be produced," the spokesperson added. "This announcement applies only [to] U.S. vehicle orders of these models. The news was first reported by CarBuzz. 

The spokesperson declined to say how "temporary" this Sept. 1 production pause might be. That date coincides with the end of the EV tax credits in America, which will expire on Sept. 30 following the passage of President Donald Trump's budget bill. 

The Mercedes-Benz EQS and EQE SUVs are both produced at the Mercedes-Benz plant in Tuscaloosa, Alabama. Their sedan variants are built in Germany and exported to the U.S. None of them were eligible for the EV tax credit unless they were leased.

Mercedes-Benz Charging Hub EQE

"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," a spokesperson said. "In doing so, we continuously optimize our production network and use its high flexibility to react quickly to market conditions."

While Mercedes didn't elaborate on what those market conditions are, exactly, most analysts are predicting a decline in EV sales when the tax credits expire. And Mercedes' EQ models had been especially sluggish sellers since the beginning.

The cars were often criticized by reviewers as lacking the interior quality and refinement of Mercedes' gas-powered E-Class and S-Class, even though many of them offered exceptional range and efficiency. However, their biggest turnoff was their controversial designs; even Mercedes executives have admitted that the ultra-streamlined shapes of the cars didn't have the gravitas that their buyers wanted. Sales of the EQS sedan and EQS SUV were down 52% in the U.S. in 2024 versus the previous year. 

This has led Mercedes to retrench somewhat, and rethink its EV strategy for the U.S. and beyond. Future electric models will follow the template of the new G-Class with EQ Technology: battery-powered versions of familiar Mercedes models and typically with hybrid variants as well. The German automaker just unveiled the new electric CLA-Class sedan and wagon, and will be debuting a new electric GLC SUV later this year or in early 2026. 

In the meantime, if you've somehow waited this long to buy a new EQE or EQS, do it while you can—but know that they're tremendously good deals on the used market. 

Contact the author: patrick.george@insideevs.com

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