by BMW profit fell, but the company remains optimistic
BMW has published its financial results for the first quarter of 2026, which recorded a significant drop in profit. Despite this, the figures turned out to be better than pessimistic analyst forecasts, allowing the company to maintain investor confidence.
The pre-tax profit of the entire BMW Group amounted to 2.3 billion euros ($2.7 billion), which is 24.6% less compared to the same period last year. However, this figure turned out to be slightly higher than the 2.2 billion euros ($2.6 billion) forecast by analysts. An even worse situation is observed directly in the automotive division, where profit fell by 33.5% to 1.27 billion euros ($1.5 billion). The group’s total revenue also decreased by more than eight percent, amounting to 31 billion euros ($36.4 billion).
Pressure from all sides: China, competition, and tariffs
Pressure on the company’s financial performance is coming from various directions. The Chinese market is no longer as profitable as before, competition in the industry is intensifying, and the threat of increased import duties in the US looms over the company like a storm cloud. Additionally, BMW is facing a serious 20.1% drop in global sales of electric vehicles, partly due to the cancellation of federal tax incentives in the US. The share of fully electric vehicles in the group’s total sales decreased from 17.2% to 15.5%.
Confidence in the future and the Neue Klasse
Despite the difficult situation, BMW management states they are ready for the challenges and maintains its forecast for the full year 2026 unchanged. The company’s CEO, Oliver Zipse, downplayed the significance of the latest tariff threat from US President Donald Trump, who promised to impose a 25% duty on imported cars. According to Reuters, Zipse called this more of a negotiation tactic than a final decision.
One reason for Zipse’s confidence in the short term is that BMW’s operating margin did not suffer as much as expected. The operating margin of the main automotive division fell from 6.9% to 5.0%, a significant drop of 27.5%, but analysts had forecast an even weaker figure, so the result added confidence to the market. And while the BMW Group’s total sales fell by 3.5% to 565,780 units, Volkswagen sales fell by 4%, and Mercedes registrations fell by 6% over the same period.
Another source of optimism is the new products coming to market. The new electric iX3 is seeing significant demand in the markets where it is already available — half of all X3 sales are now of the electric version. Demand is expected to increase even more when dealers in the US begin taking orders for cars produced in North Carolina. The electric i3 (3 Series) was also introduced, with production set to begin in the fall. It features the same design and technologies of the Neue Klasse and promises a range of over 550 miles (885 km) on the WLTP cycle.
Thus, despite a significant drop in profit, BMW management looks to the future with optimism. However, if Donald Trump does implement his plan for 25% tariffs, the situation could change dramatically.
Overall, the situation around BMW demonstrates a classic example of how market expectations can influence the perception of results. A quarter drop in profit is a serious signal, but the fact that it was less than analysts predicted allowed the company to avoid panic among investors. The key factor for further developments will be not only the success of the new Neue Klasse platform but also BMW’s ability to adapt to the changing regulatory environment, particularly potential trade barriers from the US. It is also worth noting that the decline in electric vehicle sales is a general trend for many manufacturers, which may indicate a temporary cooling of the market rather than structural problems within the company itself.
