BMW Expects Moderate Decline in Pre-Tax Profits in 2026

BMW reported a notable decline in profitability during 2025, as the German automaker faced increasing pressure from global trade tariffs and weakening demand in China. The company’s operating profit dropped to its lowest level since the COVID-19 pandemic.

Group earnings before interest and taxes fell by 11.5% to €10.2 billion, compared with €11.5 billion in the previous year. Net profit declined by roughly 3% to €7.5 billion, while total revenue decreased by 6.3%, reaching about €133.5 billion.

The automotive division experienced the largest impact. Its EBIT margin dropped to 5.3%, marking one of the weakest performances in recent years and falling significantly below BMW’s long-term target range of 8% to 10%.

International trade tariffs were a major factor affecting profitability. U.S. import duties and European Union tariffs on electric vehicles manufactured in China—impacting the group’s Mini brand—reduced margins by approximately 1.5 percentage points during the year.

According to Chief Financial Officer Walter Mertl, the company would have reported profit growth in 2025 if tariffs had not affected its operations.

Sales Performance and Market Trends

Despite the financial pressure, BMW delivered approximately 2.46 million vehicles worldwide, representing a modest increase of 0.5% compared with the previous year.

Growth was strongest in Europe, where sales surpassed one million vehicles for the first time since before the pandemic. Deliveries in the United States also improved, rising by around 5%.

However, the company faced serious challenges in China, its largest single market. Sales there dropped by more than 12% due to intense competition from domestic manufacturers, which significantly weighed on BMW’s performance in the region.

Electric Vehicles Continue to Drive Growth

Electrification remained a key driver of growth within BMW’s product lineup. The company delivered more than 640,000 electrified vehicles globally during the year, representing roughly 26% of total sales. Fully electric models accounted for around 18% of all deliveries.

BMW’s high-performance division also achieved strong results. The BMW M brand set a new record with more than 213,000 vehicles delivered worldwide.

Future Strategy and Outlook

A central pillar of BMW’s future strategy is its new vehicle architecture known as the Neue Klasse platform. The company believes this platform will accelerate its transition toward electric mobility while introducing advanced technologies across its entire model lineup.

The platform recently debuted with the new iX3 model.

Looking ahead to 2026, the company remains cautious about its outlook. BMW expects the automotive EBIT margin to range between 4% and 6%, with tariffs likely reducing margins by approximately 1.25 percentage points.

The group also anticipates that pre-tax profits will decline moderately in 2026.

CEO Oliver Zipse emphasized confidence in the company’s long-term direction, stating that the strategic course established in recent years remains the correct one. According to him, maintaining this strategy will allow BMW to stay on a stable path toward long-term success.