BMW's Neue Klasse Crossroads: Munich Ramps Up the i3 While the Bottom Line Sputters
Published on 08/08/2026 at 19:11 | Redaktion boerse-global.de
The assembly lines at BMW's Munich headquarters are humming with a new rhythm. On Thursday, the automaker officially kicked off series production of the i3, the second model built on its "Neue Klasse" electric platform and the first to roll off the line at the company's historic home plant. The milestone marks the culmination of a five-year, €650 million overhaul that converted roughly a third of the Munich site into a dedicated EV production hub — new body shop, new assembly hall, all built while the existing 3 Series line kept running.
The transformation is stark: since 1975, about nine million 3 Series vehicles have been built at the Munich plant. By 2027, the facility will produce exclusively battery-electric vehicles. BMW says the new manufacturing logic cuts production costs by a further 10 percent, with batteries sourced from Irlbach-StraĂźkirchen and electric motors from Steyr, Austria, where the Neue Klasse powertrain line has been running in two shifts since early July at a capacity exceeding 4,000 motors per week.
Demand for the i3 has been robust even before the official market launch. The order books opened in mid-June, pulled forward from an originally planned autumn start, and the entry-level i3 50 xDrive First Edition — rated at up to 906 kilometers of WLTP range — has generated what the company describes as strong uptake. The steep production ramp curve reflects that early enthusiasm.
A Halbjahresbilanz That Stings
Yet the celebratory mood in Munich stands in sharp contrast to the numbers on the CFO's desk. The first-half results, published on July 30, painted a picture of a group under significant operational pressure. Pre-tax profit fell 29.4 percent year-on-year to €4,045 million, with an EBT margin of 6.5 percent. The second quarter alone was even harsher: pre-tax earnings dropped 35.1 percent to €1,697 million, while the operating margin in the automotive segment collapsed to 2.3 percent — less than half the level of the corresponding quarter last year.
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China remains the single largest drag. First-half deliveries there declined 20.4 percent, with the second quarter worsening to a 30.2 percent slide. Group-wide, BMW shipped 4.2 percent fewer vehicles than a year earlier, and the core BMW brand also registered a noticeable contraction. Europe and the US offered some counterweight, with deliveries up 5.4 percent and 3.9 percent respectively.
The deterioration had already forced BMW to issue a profit warning in June. Management now guides for an automotive margin of just 1 to 3 percent and expects a "significant" rather than "moderate" decline in group pre-tax profit. Free cash flow in the automotive division is projected at around €2.5 billion — noticeably below previous planning.
8,000 Jobs on the Line
The same day the half-year numbers landed, BMW announced a workforce reduction program: roughly 8,000 positions will be eliminated by the end of 2027, with compulsory redundancies ruled out. The company has earmarked about €1 billion for the personnel measures, and more than half of the cuts are expected to hit Germany, where BMW employs around 85,000 people. Some 50,000 employees have already received severance offers.
The personnel restructuring also brings a leadership change. On September 1, Dorothea von Boxberg — until now CEO of Brussels Airlines — takes over the human resources portfolio and the role of labor director, succeeding Ilka Horstmeier.
The Electric Bright Spot
Amid the gloom, the Neue Klasse is delivering tangible momentum. Battery-electric vehicle deliveries rose 5.2 percent in the second quarter to 116,807 units, with Europe alone up 38 percent. The iX3, the platform's first model, is approaching 100,000 orders in Europe, and the broader X3/X4 line grew 16.4 percent in the first half on the back of its launch. The i3 is also drawing strong pre-launch interest. One caveat: extreme summer heat and low Danube water levels in Hungary threatened production targets for the iX3 at the Debrecen plant earlier this week, according to media reports.
The market backdrop in Germany is supportive. In July, battery-electric and plug-in hybrid vehicles together reached a record 40.7 percent share of new registrations, with pure EVs up 61.7 percent year-on-year at 78,609 units. But the premium segment is being hit harder than the mass market — BMW and Mercedes-Benz are both feeling the squeeze, particularly in China, where BMW is now adapting its iX5 SUV to local requirements.
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Analysts Split, Shares Still Deep in the Red
The investment community remains divided on BMW's trajectory. The DZ Bank downgraded the stock from Buy to Hold on July 31, cutting its price target from €75 to €65. Bernstein Research reaffirmed its Outperform rating the same day but trimmed its target from €85 to €82. Jefferies sits at Hold with a €70 target, while Goldman Sachs is more bullish with a Buy rating and €82 target — and some houses go as high as €90.
On Friday, the shares closed at €59.82, up 1.94 percent on the day. But that modest bounce does little to offset a brutal year: the stock is down 35.97 percent since January 1. The distance to the 50-day moving average remains roughly three percent to the downside — a signal that the short-term recovery lacks conviction. Chart watchers see support just under €60, with a sustainable breakout potentially closing a gap in the mid-€60s range.
BMW is also looking further ahead. An electric M3 — reportedly featuring four electric motors controlled by a central computer dubbed "Heart of Joy," simulated gear shifts, and a bespoke sound design — has been spotted testing in camouflage at the Nürburgring. M chief Frank van Meel has said he believes it could be the best M3 ever. Whether that ambition translates into a market turnaround, however, will depend on the third-quarter numbers and whether the combination of cost cuts and new electric models can finally reverse the slide.
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