BMW’s Profit Margins Improve as EV Investments Begin to Deliver

German luxury carmaker BMW has reported an improvement in its core profit margin for the third quarter, as the company moves past its peak investment phase in research and development for its new all-electric vehicle range. 

This development comes at a time when European automakers are facing significant challenges, including high tariffs in the United States, increased competition from affordable Chinese vehicles, and concerns over a potential shortage of semiconductor chips.

For the July to September period, BMW’s automotive division achieved an operating margin of 5.2%, a notable increase from 2.3% in the same quarter last year, when sales were affected by brake-related issues. 

The company’s group earnings before interest and tax stood at 2.3 billion euros, in line with market expectations, while revenues were slightly below forecasts at 32.3 billion euros. Following a recent downward revision of its full-year outlook due to tariff pressures and slow growth in China, BMW now expects its car margin to remain between 5% and 6%, compared to 6.3% in 2024.

The automaker is banking on its upcoming all-electric “Neue Klasse” series to drive future growth, with the first model expected to launch in 2026. In Europe, demand for the iX3, the debut model of this series, is strong, with orders extending several months into 2026. 

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