Mercedes Benz (MBG) is pausing deliveries of its EVs, paving way for Tesla (TSLA) to move further ahead of its competition. The carmaker said on Wednesday the pause is in response to slowing demand and high inventories at dealerships. “Mercedes-Benz is temporarily putting on hold order banks for EQ models in the U.S. to align with current market demand,” a spokesperson for the company said.
The group’s CEO Ola Kaellenius told reporters on Wednesday that despite the slower trajectory, he expected U.S. consumers to buy more EVs over time. However, Tesla still dominates that market share, and could get a bit stronger with Mercedes EV deliveries halting. Mercedes Benz’s MBG stock is down 3% on Wednesday after the EV announcement.
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Tesla, as a top competitor in the US EV industry, could hence see a bump in sales and stock. TSLA shares are up a fraction of a percent on Wednesday following the news. Earlier today, Tesla secured a new deal with South Korea’s LG Energy Solution worth $4.3B, which will supply the EV maker with energy storage system batteries. According to a source familiar with the deal, the lithium iron phosphate (LFP) batteries will be supplied from LGES’s U.S. factory in Michigan. LGES previously announced the deal but did not reveal that the deal was with Tesla or any other suitors.
“In accordance with our agreement, we are unable to disclose the customer’s identity due to confidentiality obligations,” LGES told Reuters Wednesday. However, anonymous sources suggest that the Elon Musk-run EV giant will be supplied with the new system batteries.