The brand's roots extend to two separate nineteenth-century automotive pioneers. Carl Benz patented the Benz Patent-Motorwagen in January 1886, financed by Bertha Benz's dowry, and it is widely recognised as the first automobile powered by an internal combustion engine. Separately, Gottlieb Daimler and his engineer Wilhelm Maybach converted a stagecoach with a petrol engine later the same year. The Mercedes name entered use in 1901 when Austrian entrepreneur Emil Jellinek registered it as a trademark for the Daimler Motoren Gesellschaft's newest model, naming it after his daughter Mercédès. Jellinek promoted the cars among elite European society and numbered the Rothschilds and American billionaires among his early customers. The first Mercedes-Benz branded vehicles appeared in 1926 following the merger of Karl Benz and Gottlieb Daimler's respective companies into Daimler-Benz on 28 June of that year.
Throughout the 1930s, Mercedes-Benz produced the 770 model, a large car associated with high-ranking figures in Nazi Germany. From 1937 onward, Daimler Benz focused increasingly on military production, including the LG3000 lorry and the DB600 and DB601 aero engines. By 1942, car production had largely ceased in favour of war materiel. According to the company's own subsequent statement, in 1944 almost half of its 63,610 employees were forced labourers, prisoners of war, or concentration-camp detainees. The company later paid $12 million in reparations to the labourers' families. The company's factory at Genshagen, built in 1936 to produce aero engines and hidden in a forest approximately 10 km south of Berlin, was among the key wartime facilities.
Following World War II, Mercedes-Benz rebuilt its production capabilities and returned to motorsport. The company's Silver Arrows — so called because German racing cars of the 1930s ran without paint to save weight, revealing their silver aluminium bodies — had dominated Grand Prix motor racing alongside Auto Union from 1934 onward. Mercedes-Benz returned to Formula One in the 1950s with considerable success before withdrawing. The company re-engaged with Formula One as an engine supplier and ultimately as the works Mercedes-AMG Petronas team, which achieved a record-breaking run of Constructors' Championships in the 2010s under the hybrid era regulations.
Mercedes-AMG became a majority-owned division of Mercedes-Benz in 1999 and produces high-performance variants of existing models as well as standalone performance cars. Mercedes-Maybach is the brand's ultra-luxury sub-brand, revived after production stopped in December 2012 due to weak sales; it now produces luxury-enhanced variants of standard Mercedes-Benz models. In November 2019, Daimler AG announced that Mercedes-Benz would be spun off into a separate wholly owned subsidiary called Mercedes-Benz AG to manage the car and van business, with Mercedes-Benz-badged trucks and buses placed under the separate Daimler Truck AG subsidiary, which became independent at the end of 2021.
Mercedes-Benz has introduced many electronic and mechanical innovations over its history, with numerous safety features later adopted industry-wide. The company has historically invested heavily in passive and active safety research. The 156 model was cited as the world's first passenger car with a Common Rail diesel engine. In recent decades, Mercedes-Benz has pursued electrification through its EQ sub-brand, producing a range of battery-electric vehicles across multiple segments. In May 2022, the company announced the sale of what it described as the most expensive car sold at the time — a rare 1955 Mercedes-Benz SLR from its collection, sold to a private owner for $142 million (approximately 135 million euros), with proceeds directed to establish the Mercedes-Benz Fund.