BMW Reports 25% Profit Drop in Q1 2026 Despite Beating Expectations

BMW reported a 25% decline in first-quarter 2026 profits, yet still outperformed analyst expectations. The company’s pre-tax earnings for the quarter totaled €2.3 billion ($2.7 billion), down 24.6% from the same period last year. Analysts had predicted earnings of €2.2 billion ($2.6 billion), making BMW’s results slightly better than forecasted.

On the automotive side, profits fell even more sharply, dropping 33.5% to €1.27 billion ($1.5 billion). Group revenue also declined by over 8%, reaching €31 billion ($36.4 billion).

Key Challenges: EV Sales and Market Pressures

BMW faces multiple headwinds, including a 20.1% global drop in electric vehicle (EV) sales, partly due to the expiration of U.S. federal tax credits. The share of fully electric cars in BMW’s total sales fell to 15.5%, down from 17.2% previously. Competition in key markets like China and the looming threat of U.S. tariffs further complicate the landscape.

Despite these challenges, BMW maintained its full-year financial outlook, signaling confidence in its ability to navigate the current environment.

CEO Dismisses Tariff Threats as Negotiation Tactics

"The latest tariff threat is more of a negotiating tactic than a done deal," said BMW CEO Oliver Zipse, according to Reuters. He referred to U.S. President Donald Trump’s vow to impose a 25% tariff on imported cars as typical political posturing.

New Models Drive Optimism

BMW’s optimism stems partly from its upcoming product lineup. The new electric iX3 has already seen strong demand, with half of all X3 sales now electric in available markets. Orders for U.S.-built versions will begin soon, further boosting sales potential.

The company also highlighted the i3 electric 3-Series, set to enter production this fall. This model, part of BMW’s Neue Klasse platform, promises over 550 miles (885 km) of WLTP range and reflects the brand’s latest design and technological advancements.

While overall sales for the quarter declined by 3.5% to 565,780 vehicles, competitors like Volkswagen (-4%) and Mercedes (-6%) fared worse in the same period.

Despite the headline profit drop, BMW remains focused on long-term growth, leveraging new models and strategic resilience to weather current challenges.