Magna International Inc. (MG-T) is expanding its long-term partnership with Mercedes-Benz by equipping the German automaker's electrified G-Class off-roader with its advanced eDrive System.

Launched in 2024, Aurora, Ont.-based Magna's eDS Duo electric drive system brings traction performance via state-of-the-art propulsion technology to Mercedes-Benz's new electric version of its G-Class SUV, rebranded as the G 580.

Magna's unique eDrive system marks yet another engineering innovation the Canadian auto parts giant is delivering to Mercedes as part of a longstanding partnership between the two companies.

“Having supplied three generations of transfer cases for Mercedes-Benz’s iconic off-roader, Magna is honoured to now equip this legendary vehicle with its first generation of electric units," Diba Ilunga, president of Magna Powertrain, said in a release. 

The Magna, Mercedes-Benz partnership

For over four decades, Magna has had strategic partnership with Mercedes-Benz that covers a wide range of components and automotive technology, including powertrain and drivetrain systems, advanced driver-assistance systems, body and chassis components, electrification and interior systems.

This long-term collaboration dates back to 1979 when Magna began building the Mercedes G-Class SUV at its plant in Graz, Austria. In 2023, Magna celebrated a milestone when production of the rugged off-roader surpassed the 500,000 mark. 

A particularly notable feature of Magna's eDS Duo electric drive is its individual wheel propulsion system allowing the G-Class to rotate 360 degrees in place, a manoeuvre Mercedes calls the "G-Turn," also known as a "tank turn."

Rising EV headwinds despite upbeat 2024 EPS results 

Three days after announcing its eDrive supply deal with Mercedes, Magna reported upbeat Q4 2024 earnings of US$1.69 per share, a 27 per cent year-over-year increase from the same quarter in 2023, beating street forecasts of US$1.51.

Meanwhile, Magna recorded a two per cent increase in Q4 sales revenue to $10.6 billion as compared to 2023 Q4 sales.

Full-year results showed adjusted EBIT rose 23 per cent year-over-year to US$689 million, well above street expectations of US$627.4 million. Annual sales revenue remained flat at US$42.8 billion.

"In 2024, we successfully drove margin expansion and increased cash flow generation through deliberate actions related to operational excellence, restructuring, reduced capital spending and commercial recoveries," Swamy Kotagiri, Magna International CEO, said during Magna's Feb. 14 earnings call. "We achieved this despite continued industry headwinds, including lower vehicle volumes in key markets."

Magna's 2024 full-year earnings largely withstood the dampening effects of a substantial $448 million Q1 writedown of its investment in Fisker prior to the Austrian EV automaker's June bankruptcy filing. 

For over a year, Magna had been producing the Fisker Ocean SUV at its plant in Graz, where it also manufactures BMW 5 series sedans as well as the Mercedes G Class. 

Fisker, Ford, GM cutbacks force Magna to fine-tune strategy

Apart from the collapse of Fisker, Magna also had to contend with other major EV cutbacks: Ford's July decision to scrap its electric SUV slated to being production at its Oakville, Ont. plant in 2027, delays to its BlueOval City facility, and GM's scaling back of its electric pickup trucks and SUV projects.

Magna had planned to produce battery trays, seats and other parts for Ford’s all-electric SUV. Following the cancellation, it scrambled to sign up other customers and vehicle lines.

Despite the plateauing of EV demand in Europe and North America, Magna remains confident the sector will gradually expand its overall market share.

"EVs are here to stay, and we remain committed to the long term. We are building a strong foundation to capture increasing demand as market cycles evolve. Our position has been consistent — globally, we expect EV penetration to reach the mid-30 per cent range by 2030, though adoption rates will vary by region," Dave Niemiec, Magna's global director of corporate external communications, told Sustainable Biz Canada in an email exchange.

Kotagiri cites 'disruptive' potential of Trump tariffs

During the call, Magna was careful to note 2025 and 2026 guidance did not account for "impacts of potential tariffs".

When asked whether Magna had a contingency plan to deal with the prospect of automotive sector tariffs, Kotagiri took a pragmatic stance.

"The policymakers, the OEMs, the supply base and the ecosystem have to figure out a solution together," Kotagiri said. "But I can tell you one thing, for a supplier to absorb this magnitude that they're talking about is really unrealistic and untenable . . . We have to work through this but it's going to be disruptive for sure if the magnitude of tariffs they're talking about is implemented for the industry overall."

"We continue to advocate for trade policies that help protect and support manufacturing jobs and the industry’s competitiveness . . . and working with our partners, trade associations, and the governments of Canada, Mexico, and the United States to seek solutions that maintain overall industry stability and minimize disruptions to the supply chain," Niemiec added.