BMW's Two-Speed Reality: Munich Ramps Up the i3 While the Bottom Line Sputters
Published on 08/10/2026 at 13:24 | Redaktion boerse-global.de
The assembly lines at BMW's Munich plant are humming again, but the soundtrack coming from the finance department is considerably less harmonious. On Sunday, the automaker kicked off series production of the i3 — the second model in its much-vaunted Neue Klasse generation — even as the company's half-year results show an operating performance not seen since the depths of the pandemic.
The juxtaposition captures the central tension facing BMW's leadership: a costly, high-stakes transition to electric mobility unfolding against a backdrop of shrinking margins, a deepening China slump, and a workforce bracing for significant cuts.
The Numbers Tell a Grim Story
The i3's production start came just days after BMW published its first-half report on July 30, and the figures were unsparing. Group net profit for the first six months of 2026 fell to €2.9 billion, a decline of 28.5 percent year-on-year. Revenue came in at €62.3 billion, while operating profit (EBIT) tumbled 37 percent — the weakest reading since the COVID-induced collapse in the second quarter of 2020. The EBIT margin in the automotive segment contracted to just 3.6 percent.
The second quarter alone was particularly bruising. Net profit dropped 35 percent to €1.2 billion, revenue slipped 8.8 percent to €31 billion, and automotive EBIT cratered 60 percent to €629 million. Global deliveries for the quarter reached 590,962 vehicles, down 4.9 percent from a year earlier.
China remains the most acute pressure point. Deliveries in BMW's largest single market plunged 30.2 percent to 117,815 units — a decline that no other region came close to matching. For the full year, management has held its guidance: a slight decline in global sales, a significant drop in earnings, and an EBIT margin of between 1 and 3 percent.
A Workforce in Transition
The operational strain is now translating into personnel measures. On July 29, BMW unveiled a voluntary severance program running from October through the end of 2027, targeting roughly 8,000 positions worldwide — about 5 percent of its workforce. Of the 154,000 employees, approximately 85,000 are based in Germany, where more than half of the cuts are expected. The company has explicitly ruled out compulsory redundancies and set aside around €1 billion for the measures in 2026.
The restructuring extends into the executive suite. Dorothea von Boxberg, currently CEO of Brussels Airlines and previously CFO of Lufthansa Cargo, takes over the personnel portfolio as labor director on September 1. She succeeds Ilka Horstmeier, who spent 31 years at BMW.
The Neue Klasse Counteroffensive
Against this gloomy backdrop, the i3 launch represents BMW's best hope for a turnaround. The i3 50 xDrive delivers 345 kW and 645 Nm of torque, with a WLTP range of up to 900 kilometers and the ability to recharge up to 400 kilometers of range in ten minutes. Batteries come from the Irlbach-StraĂźkirchen plant, while motors are produced in Steyr. Production costs have been reduced by around 10 percent through the plant modernization, and Munich is slated to become an all-electric facility by 2027.
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The i3 follows the iX3, which has already generated significant momentum. Order intake for the iX3 is approaching 100,000 units, with more than 50,000 bookings in Europe alone. That demand is showing up in the numbers: second-quarter BEV deliveries rose 5.2 percent to 116,807 units, with Europe posting a particularly strong 38 percent gain to 81,445 vehicles, driven by the iX3's market debut. Over the full half-year, however, BEV deliveries still slipped 7.4 percent to 204,295 units.
Customer deliveries of the i3 are scheduled to begin this autumn. The 7 Series has been in production since July, and the X5 is ramping up at BMW's Spartanburg plant in the US.
Analysts Split on the Outlook
The market's assessment of BMW's trajectory remains divided. Before the half-year results, HSBC upgraded the stock from Hold to Buy on July 16, though it trimmed its price target from €79 to €71. The DZ Bank struck a more cautious tone after the numbers, downgrading BMW from Buy to Hold on July 31 and cutting its target from €75 to €65.
The stock itself reflects the uncertainty. On Monday, shares traded at €59.16, down 1.33 percent on the day, leaving the equity just 4.89 percent above its 52-week low of €56.40, set on July 24 — days before the earnings release. The shares have lost 35.82 percent since the start of the year.
Shareholder Returns Intact
Despite the earnings squeeze, BMW is maintaining its capital return program. The third tranche of the 2025/2027 buyback scheme launched in early July with a volume of up to €625 million. The overall program is sized at up to €2 billion and runs until April 30, 2027.
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A Dealer's Reassurance — and a PR Misstep
On the demand side, there are signs that the China narrative may be more nuanced than the headline numbers suggest. Burkhard Weller of the Wellergruppe told the Handelsblatt that he is not aware of a single BMW customer defecting to BYD, describing Chinese brands as niche players despite their combined market share of around 9 percent. Weller dismissed the electric-vehicle purchase subsidy as "complete nonsense." His dealer group, which generates €1.8 billion in revenue across 44 dealerships, sold roughly 53,000 vehicles in 2025 and is targeting 60,000 in 2026 at a margin of 1.5 percent.
BMW has also had to manage a customer relations stumble. Most models built from 2020 onward now play a Spider-Man advertisement on the display screen at vehicle startup, part of a Marvel partnership tied to the cinema release of "Spider-Man: A Brand New Day." Media reports indicate customers reacted with outrage, noting BMW had pledged in 2024 that the car would remain an advertisement-free private space. The incident is unlikely to materially affect operations, but it underscores how sensitive buyers are to intrusions into the vehicle experience — particularly at a moment when BMW is asking them to place their trust in a new electric generation.
