BMW profit dropped 25 percent in the first quarter of 2026. The numbers look bad, but they still beats expectations for Q1. CEO sugests Trump’s 25 percent tariff threat is usual hot air. BMW just posted a massive drop in first quarter profits, yet somehow still managed to keep investors onside. How? Because even though the numbers aren’t exactly healthy, they’re not quite as bad as had been expected. Pre-tax earnings for the entire BMW Group came in at €2.3 billion ($2.7 bn), down 24.6 percent from a year ago, but slightly better than the €2.2 billion ($2.6 bn) analysts had predicted with their financial crystal balls. Focus purely on the automotive side and things are even worse, down 33.5 percent to €1.27 billion ($1.5 bn). Group revenue also slipped more than eight percent to €31 billion ($36.4 bn). Related: BMW’s First Million EVs Took 11 Years. The Second Took Two That pressure is coming from all directions. China isn’t bringing in the Euros like it used to, competition is heating up, and the threat of higher US tariffs is hanging over everything like a storm cloud. BMW is also suffering from a serious 20.1 percent drop-off in EV sales globally, partly in response to the withdrawal of federal tax credits in America. The share of fully electric cars relative to overall sales numbers across the group dropped 17.2 percent to 15.5 percent. Still, BMW says it’s ready to take on the rest of the year, and the ones after that. The company kept its full-year outlook unchanged, suggesting it believes the situation is manageable. Its CEO even played down the latest tariff threat in which US President Donald Trump vowed to apply a 25 percent tariff to imported cars. Oliver Zipse described it as more of a negotiating tactic than a done deal, according to Reuters. Neue Klasse, New Hope One of the reasons Zipse feels confident about the short-term future is that BMW’s operating margins didn’t suffer quite as much as it had braced for. The core automotive operating margin dropped from 6.9 percent to 5.0 percent, which is a stiff 27.5 percent fall, but analysts had been planning for an even weaker number, so the result gave the market some confidence. And although BMW’s Group’s total sales fell 3.5 percent to 565,780, VW’s dropped 4 percent and Mercedes registrations fell 6 percent in the same period. Another reason to feel upbeat is the new product now filtering through. The new electric iX3 is heavily oversubscribed in markets where it’s already available – half of all X3 sales are now electric – and it’s going to get another boost soon when dealers start taking orders in the US for Carolina-built versions. We’ve also already seen the i3 electric 3-Series, that goes into production this fall showcasing the same Neue Klasse design and tech, and promising over 550 miles (885 km) of WLTP range. So despite the headline profit drop, BMW’s feeling good about the future. But if Trump did actually follow through with his 25 percent tariff plan, the winds could change fast. BMW
