As European car makers face mounting challenges in 2025, Goldman Sachs has downgraded both Mercedes-Benz AG and Porsche SE, citing rising costs, tariffs, and margin pressures.
German car making titans, long celebrated for their engineering prowess, are now grappling with the twin challenges of weak electric vehicle profitability and declining earnings in China.
This uncertain landscape has prompted Goldman Sachs to downgrade Porsche SE and Mercedes-Benz AG, painting a sobering picture for the broader European car industry.
In a note published on Tuesday, Goldman Sachs analyst George Galliers highlighted the headwinds facing Europe’s car makers, citing rising labour costs, tariff risks, plummeting profitability in China and the mounting pressure to comply with stringent environmental regulations.
“We expect another challenging year for European auto stocks in 2025”, Galliers said, noting that the sector had already suffered a more than 12% decline in 2024.
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