Daimler could be on track for one of the worst years in nearly a decade come 2020. But don't take my word for it.
At the start of this month, the company itself has been quietly flagging a potential 2.3 billion euros in extra costs ahead of its key Capital Markets Day presentation on Thursday.
Management hopes to push consensus estimates for operating profit down by roughly a fifth towards 8 billion euros, brokerages told Automotive News Europe.
If this proves accurate, it would mean earnings would sink to a level not seen since 2010, when the industry was just reemerging from the global financial crisis.
The bulk of this comes from compliance costs to lower its European fleet CO2 emissions, which need to "dramatically decrease" next year according to Daimler's sustainability report.
By that time, it aims to double the number of Mercedes-Benz model derivatives equipped with a 48-volt mild hybrid to more than 100 and plug-in hybrids to over 20. But these added costs by and large cannot be passed on to the customer, Daimler told analysts.
"Mercedes pretty much starts from 0 and needs to step up to at least some 150,000 to 200,000 next year. The incremental costs are quickly 1 billion euros, if not more," wrote Evercore ISI analyst Arndt Ellinghorst in a recent report.
The weight-based target for Mercedes is not publicized, but industry sources have indicated it is around 101 grams per kilometer under the old NEDC test cycle by 2021,
For 2019, the automaker has only forecast a slight decline from the 132 g/km last year. This suggests it may not even be enough to push it back below the 125 g/km two years ago let alone its historic low of 123 g/km.
Let's not forget Daimler went out of its way to debut the Mercedes-Benz EQC electric crossover before the Audi e-tron in September 2018, even though the EQC still had nearly nine months to go before launching.
Yet Mercedes has mustered just 445 registrations in its home market of Germany through October, compared to 3,204 for the e-tron, according to government figures. Even the Jaguar I-Pace did far better with 789 registration.
"It is somewhat frustrating that despite significant over-investment in recent years, Mercedes is further away from complying with its emission targets and faces a larger CO2 risk than its peers," wrote Ellinghorst, after downgrading his earnings estimates by 1.3 billion euros, citing "recent discussions with the company."
Thursday's Capital Markets Day should confirm the harsh headwinds for next year. Too bad the liveliest talks will likely take place in the coffee breaks rather than on the webcast.