TIVP018: MERCEDES-BENZ (MBG): CAN BENZ REINVENT THE CAR?

W/ DANIEL MAHNCKE & SHAWN O’MALLEY

04 May 2025

Daniel Mahncke and Shawn O’Malley break down Mercedes-Benz (ticker: MBG), one of the world’s most iconic automakers known for luxury, engineering, and performance. From the invention of the automobile to perfecting the engineering craft, Mercedes has shaped the way the world moves — and it wants to continue to do so, now with a stronger focus on EVs and in-car technology.

In this episode, you’ll learn how Mercedes grew out of the industrial revolution and invented the modern car, how its legacy and brand power influence the company’s strategy today, how it’s navigating the shift to electrification and digital software, whether Chinese EV competition is an existential threat, how Mercedes plans to monetize its own operating system, and whether the stock’s high dividend yield and low valuation make it a hidden gem — plus plenty more along the way.

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IN THIS EPISODE, YOU’LL LEARN:

  • Mercedes’ origin story and how it built the first automobile
  • How Mercedes dominated motorsports
  • How Mercedes makes money and what business segments they have
  • How the industry and competitive landscape have changed
  • Why Mercedes’ EQ lineup has failed
  • What role China plays and how Mercedes is performing in China
  • What Mercedes has changed for the new EVs
  • How Mercedes performed recently and what KPIs matter most
  • Whether Mercedes is attractively valued at its current beaten-down levels
  • Whether Shawn & Daniel add MBG to The Intrinsic Value Portfolio
  • And much, much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Daniel Mahnke: You said Mercedes is like probably a company with like the best history that you can have because I’m sure many iconic car makers have an interesting backstory to it. But only one can say that they invented the automobile and Mercedes-Benz can. They are that one company and that’s, so it goes back to 1886 when Karl Benz patented what’s today widely considered the first gasoline powered car.

[00:00:26] Daniel Mahnke: And it’s called, and I will say it in German now because I have to play my home bias here, Benz, Patent-Motorwagen. The next two names I would drop are Daimler and Maybach. Both of them were German engineers, kind of at the same time as Karl Benz, but they invented their own engine separately from Karl Benz.

[00:00:45] Daniel Mahnke: And it was only about 40 years later that they merged those companies together. And then what you had was the Daimler Motoren Gesellschaft, and Benz. And later on, that company turned into Mercedes-Benz, which is the company we’re talking about today.

[00:01:05] Shawn O’Malley: Hey guys. Today my co-host Daniel Mahnke, is back with another company pitch for our intrinsic value portfolio, which is a portfolio of stocks we’re building over time on this show each week by breaking down a wide range of different companies. And recently we discussed names like Nintendo, Nike, Uber, and Montclair.

[00:01:23] Shawn O’Malley: Today, Daniel, you will pitch a company whose logo has become a symbol of luxury and engineering excellence across the globe. And yet many fears still that this brand will have a hard time battling international competition, specifically Chinese competition. Without further ado, that company is Mercedes-Benz.

[00:01:39] Shawn O’Malley: And before recording, we talked a little bit about the differences in how car companies are perceived in the US and Germany and how there are some brands that are more popular here than in Germany and vice versa. But of course, Mercedes-Benz is popular across the world. You not only want to give us an overview of Mercedes business and valuation but also tackle the larger picture for car companies in an industry that is notorious for intense competition.

[00:02:05] Daniel Mahnke: Yeah, I think there’s a lot to say about the overall industry as well. First of all, thank you for having me. There’s always, I think we’ll touch on many different topics. There’s a lot to say about the new playing field. China is getting big in the, in the car market, both as a as demand driver and also as a producer.

[00:02:23] Daniel Mahnke: Then you have like this change where cars turn into digital products more and more each year. Tesla is making a huge leap there, but other car companies are coming up as well. And then you have cyclicality, which is obviously a big factor for all the car companies and as we’ll see today for Mercedes as well.

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