A staggering 90 percent collapse in Mercedes-Benz EQ electric vehicle sales throughout 2024 has triggered severe internal fallout at the German automaker. A top executive has now characterized the company’s electrification strategy as a historic misstep, directly targeting an upcoming flagship model.
The forthcoming electric AMG GT 4-Door “shouldn’t even exist,” according to an unnamed senior executive who spoke with German publication Manager Magazin. The source confirmed that the vehicle is only moving forward because it is simply “too late to stop it” in the production cycle.
The financial toll of the automaker’s electric pivot is strict and highly documented. Development costs for the AMG EV platform have surpassed $1 billion. This expenditure follows the 5 billion euros—approximately $5.7 billion—Mercedes previously poured into developing the EQS and EQE SUV models. The executive described these specific EQ models as “the biggest failures in the company’s history.”
The initial push for these electric vehicles was reportedly driven by CEO Ola Källenius. Internal sources indicate the strategy was aimed at chasing Tesla’s soaring stock valuation rather than reacting to organic consumer demand. The resulting product line struggled to secure a foothold, culminating in the 2024 sales crash that forced a strict corporate reassessment.
Why the AMG Sunk Cost Traps Mercedes-Benz
The executive’s admission highlights a critical divergence in how legacy automakers handle failing electric architectures. While Honda recently abandoned plans to launch three distinct electric vehicles specifically to prevent burning billions in sunk development costs, Mercedes found itself trapped. The AMG EV was too far along in its engineering timeline to successfully pull the plug.
By proceeding with a billion-dollar flagship that senior leadership reportedly resents, Mercedes is choosing to absorb production and marketing losses rather than write off the entire research budget. The decision cements the EQ era as a highly expensive lesson in prioritizing market capitalization trends over core customer buying habits.