Sluggish demand and increasing competitive pressure in the Chinese domestic high-end premium autos market, the 15% import tariffs from the EU into the U.S., and the forced transition to electric mobility in the EU will take a toll on Mercedes-Benz AG's profitability and cash flow generation over the next two years. We expect profitability, namely adjusted EBITDA margin, to come under pressure in 2025 and 2026 and cash flow generation after investments to decline in comparison with 2023-2024. We therefore revised our outlook on German auto manufacturer Mercedes to negative from stable. At the same time, we affirmed our long- and short-term 'A/A-1' issuer credit ratings on the company as well as our 'A/A-1' issue ratings. The negative outlook reflects
