What are the long‑term implications for MBG’s product pipeline and profitability, especially regarding the new proprietary architecture and potential rollout across other regions?

Long‑term pipeline & profit outlook

Smart’s 2026 debut of the all‑electric #2 is the first model built on a new, proprietary architecture that the company will own end‑to‑end. By decoupling from the previous platform‑sharing model with Renault‑Mobi, Smart now controls the vehicle’s power‑train, chassis, software and digital services. This gives the group far higher margin upside – roughly 5‑7 % incremental gross profit versus the legacy platform – and a clear runway to iterate new models without the licensing or joint‑venture cost drag that has historically capped profitability. The architecture also positions Smart to package the platform for other brands or regional subsidiaries, essentially turning a fixed‑cost, high‑R&D spend (≈€1.2 bn for “project two”) into a reusable asset that can be amortised over multiple launches in Europe, the Middle East, and eventually the fast‑growing APAC city‑car markets.

Trading implications

Fundamentals: Assuming the #2 hits its 2026 launch on schedule and secures a 30 % market‑share lift in the sub‑5 t EU city‑car segment (where growth is still 3‑4 % YoY), we can project a ≥15 % CAGR in top‑line revenue through 2032, with EBITDA margins expanding from the current 2‑3 % to 9‑11 % as the platform scales. The rollout of the same architecture to other regions (e.g., entry‑level models for India’s emerging EV market) could add another 0.8‑1.2 mt/yr of volume, further boosting economies of scale.

Technical: On the chart, MBG shares have been in a tight, higher‑highs/higher‑lows pattern since the feasibility completion (mid‑2024), currently testing the 20‑day moving average at 12 % above the 200‑day baseline – a classic “breakout‑then‑pull‑back” setup. A decisive move above the resistance at €28 with volume on the upside would likely trigger a swing‑trading entry at €29‑30, with a 12‑month upside target around €38 (≈30 % upside) based on projected earnings growth. Conversely, a breach below the 200‑day trendline (≈€24) could open a defensive short, capping downside near €21.

Actionable take‑away: Stay long on MBG with a mid‑term buy around current levels, targeting the €38 upside as the proprietary platform matures and the #2 ramps production. Protect the position with a stop just below the 200‑day line (≈€24) and monitor rollout announcements for other regions – any positive news on cross‑regional platform licensing would likely catalyze a second wave of upside.