BMW Stock Pressure From Chinese EVs Puts Mercedes Geely And Volkswagen Under Scrutiny

Legacy European carmakers such as BMW are under pressure as Chinese electric vehicle competitors push hard on price and speed of product launches. Fresh plans to cut up to 8,000 jobs in Germany show how serious the cost reset has become, especially for companies still investing heavily in combustion models while funding the shift to EVs. For investors, this news is a reminder to look closely at which stocks may feel the squeeze and which could gain ground. This article breaks down 3 stocks exposed to this story, with one potential winner and two that may face tougher questions.

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Mercedes-Benz Group (XTRA:MBG)

Overview: Mercedes-Benz Group is a global premium car and van manufacturer that sells vehicles under brands such as Mercedes-Benz, Mercedes-AMG and Mercedes-Maybach, and also runs a sizeable financial services arm offering leasing, financing, insurance and digital services including EV charging.

Operations: Reported revenue data by segment is limited, with disclosure here showing €8.2b from Other Markets and a sizable €121.3b segment adjustment.

Market Cap: €43.3b

Investors should look at Mercedes-Benz Group with a fair amount of caution. The stock screens as inexpensive and offers a high dividend yield, yet earnings have been under pressure and Q2 2026 results relied heavily on cost cuts and a one off Athlon gain while revenue and China sales declined. Management is racing to cut material and factory costs and shift production to lower cost regions, which highlights how intense the EV price pressure from Chinese rivals has become. At the same time, the company faces weak China demand, heavy EV and software investment and potential US regulatory risk linked to Chinese ownership. That combination of low valuation, restructuring and significant unresolved risks is what matters here, not the brand badge.

Mercedes-Benz Group’s low valuation and aggressive cost cutting could be masking deeper structural issues in China and EVs. Before assuming the reset is temporary, review the 3 warning signs (1 is major!) that may change how you see the stock.

Geely Automobile Holdings (SEHK:175)

Overview: Geely Automobile Holdings is a China based car manufacturer that designs, builds and sells passenger vehicles, including new energy and battery electric models, under brands such as Geely and ZEEKR, while also providing parts, after sales services and broader mobility technology solutions across multiple regions worldwide.

Operations: Geely Automobile Holdings generates CN¥356.3b in revenue from its Auto Manufacturers segment, which includes vehicle sales and related products.

Market Cap: HK$206.2b

Geely Automobile Holdings sits at the heart of the Chinese EV price war that is worrying BMW and other European rivals, yet the story for you is less about headlines and more about how the company is trying to turn that pressure into growth. The stock trades on a lower P/E than many peers, while analysts expect solid earnings and revenue growth and see upside to the current price, but margins have come under pressure and last year’s earnings declined, which shows how fierce competition has become. On the positive side, Geely is pushing hard into higher value EVs through ZEEKR, expanding exports and deepening partnerships, from Ford in Europe to technology and chip suppliers. The question is whether that mix of scale, technology and global reach can outweigh debt funded liabilities and governance concerns as the EV contest intensifies.

Geely’s push into higher value EVs and global partnerships could be masking an even bigger story for returns and risk. Get the full picture in the 3 key rewards and 1 important warning sign

Volkswagen (XTRA:VOW3)

Overview: Volkswagen is a global automaker that produces passenger cars, luxury vehicles, motorcycles and commercial trucks and buses, and it also runs a large financial services arm that provides financing, leasing, insurance and mobility services to retail, corporate and fleet customers worldwide.

Operations: Volkswagen generates most of its revenue from Passenger Cars and Light Commercial Vehicles at about €241.4b, with additional contributions from Commercial Vehicles at €42.4b, Financial Services at €64.6b and smaller amounts from Other Operating Companies, partly offset by segment adjustments.

Market Cap: €37.5b

Volkswagen is in the middle of one of the toughest resets in European autos, with heavy Chinese EV competition, a weak China market and the prospect of up to 100,000 job cuts as it halves its model lineup and trims global capacity. The stock looks cheap on simple metrics and offers a high dividend yield. However, net margins are thin at 1.6%, recent earnings have been hit by a large €3.8b loss and dividends are not well supported by free cash flow or debt coverage. Management is pushing cost cuts, factory restructuring and partnerships such as Rivian, but investors are being asked to trust a complex, high-spend turnaround at a time when Audi and other brands are already under pressure.

Volkswagen’s thin 1.6% net margins and recent €3.8b loss suggest this reset may be tougher than it looks. Before assuming the turnaround is on track, review the 3 key rewards and 4 important warning signs (1 is major!)

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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