German automakers Mercedes and Porsche are struggling despite a preliminary trade deal. Mercedes reported a 10% revenue drop and a 68% decrease in adjusted EBIT in the second quarter. Porsche saw revenue fall 6.7% in the first half of 2025. Both are grappling with tariff impact and shifting consumer preferences.

Mercedes cut its 2025 outlook, expecting revenue to significantly drop and return on sales to dip to 4%-6%. Porsche’s return on sales is forecasted to fall to 5%-7% for the year. The US-EU deal will decrease the tariff rate to 15%, impacting customers with increased costs.

In China, consumers are favoring domestic automakers like BYD and Xiaomi over foreign brands. Slow EV adoption in the US has also hurt Mercedes and Porsche, with Mercedes halting new EV orders and Porsche dealing with high Taycan inventories.

Mercedes has price-protected customers for 2025 vehicles, absorbing tariff costs. Porsche announced price hikes for US models. Both companies are facing challenges that are unlikely to pass anytime soon.

Read more at Yahoo Finance: Trade deal aside, Mercedes and Porsche see more tariff pain on the way