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Daimler, the German auto company that makes Mercedes-Benz, has slashed its 2019 profit expectations by hundreds of millions of euros. The financial downgrade, announced Sunday, is the latest fallout from the diesel emissions scandal that has rocked the German auto industry.
The company said that “various ongoing governmental proceedings and measures relating to diesel vehicles” will affect the company’s second quarter earnings. It said it expects an increase in expenses related to those proceedings.
Daimler said its profit for 2019 will be close to last year’s level.
Shares in the carmaker declined 3.6% in Frankfurt on Monday. The stock has dropped nearly 20% from a recent high in April.
The revelation trashed confidence among consumers and regulators in diesel technology and cost Volkswagen tens of billions of dollars in recalls, legal penalties and settlements.
Daimler said at the time that it has been “cooperating extensively” with the Commission and did not expect to be fined.
Automakers, including Daimler, are investing heavily in new technology in a race for the future as tech companies and upstarts like Tesla
(TSLA) plow money into electric and autonomous cars. Daimler plans to offer 130 electric and hybrid models by 2022, in addition to electric vans, buses and trucks.
