Mercedes-Benz Piles Into AI and Green Racing, but Markets Want Margins

While Mercedes-Benz pours cash into the driverless future and burnishes its green credentials in Formula One, the stock market has its eyes fixed firmly on the present. The Stuttgart automaker’s shares have tumbled roughly 28% year-to-date, closing at €43.95 earlier this week — dangerously close to the €42.64 52-week low. Even a modest bounce of 1.09% that lifted the price to €44.42 on the day of its latest AI announcement did little to change the sour mood.

A $1.2 Billion Bet on Self-Driving Software

The company’s most eye-catching move is a stake in British startup Wayve, whose “end-to-end machine learning” approach trains artificial intelligence directly from sensor data, bypassing the need for pre-programmed rules or high-definition maps. A recent funding round brought in $1.2 billion from a consortium that includes Microsoft, Nvidia and Uber, with Mercedes joining as an investor. Wayve has already attracted $2.8 billion in total commitments.

Wayve’s software is platform-agnostic; it licenses its system to multiple automakers rather than locking into a single brand. The technology is already being deployed in Stellantis robotaxis operating on Uber’s network, and Nissan is evaluating it for the Japanese market. Mercedes sees the partnership as a way to stake out pole position in the premium segment’s software arms race, though it has not yet specified when the system might appear in its own models.

That approach carries risks: purely AI-driven decision-making is harder to audit than classical code, raising safety questions among regulators and manufacturers alike.

Green Ambitions in the Paddock

On the racing side, the Mercedes-AMG Formula One team has released a Climate Transition Action Plan targeting net-zero emissions across all scopes by 2040, with an interim goal of cutting total emissions 42% by 2030. The plan dovetails with the brand’s positioning for its high-performance AMG lineup, which is now under the stewardship of Stefan Weckbach, the new AMG chief who took the reins at the start of the month.

Should investors sell immediately? Or is it worth buying Mercedes-Benz?

Yet the sustainability message has largely been ignored in the equity market. The stock’s technical position remains weak: it sits roughly 20% below its 200-day moving average, and the relative strength index of 33.9 points to a technically oversold condition. The 50-day average of €48.54 offers a clear resistance level.

Margins Matter Most

Investors are instead focusing on the hard numbers from the core automotive business. In the first quarter, Mercedes-Benz generated nearly €32 billion in revenue while its adjusted passenger-car margin came in at 4.1% — exactly the midpoint of management’s own target range. The operating result for the car division reached €933 million.

One bright spot is the luxury segment, which accounted for 14.7% of global sales, landing at the top end of the company’s desired range. Weckbach will need to defend those margins on the most expensive models as cost pressures intensify across the industry.

What’s Next on the Calendar

The next major test arrives soon: Mercedes-Benz will hold a pre-close call on July 14, followed by the official second-quarter results on July 28. According to one of the reports, the company has pencilled in July 28, 2026 as the date for that interim report, though the discrepancy suggests a possible calendar mix-up. Either way, investors will be looking for concrete evidence of cost control and cash generation rather than visions of self-driving cars or carbon-neutral pit lanes.