BMW is bracing for a challenging 2025 as trade tariffs and shifting global trade dynamics continue to weigh on the automaker’s financial outlook. The company has allocated €1 billion ($1.09 billion) in provisions to address the economic strain caused by tariffs from the European Union and the United States, which include duties on its China-made electric vehicles.
The carmaker has revised its automotive earnings margin to 5-7% for 2025, falling short of market expectations. Tariffs on steel, aluminum, and vehicle imports into the U.S. from Mexico have significantly added to operational costs. However, BMW leadership remains cautiously hopeful that some of these trade restrictions will be alleviated during the year. As a global player, BMW is highly exposed to trade disputes, particularly the escalating tensions between the U.S. and EU over automotive tariffs. Over half of BMW’s Germany-based production is exported outside the EU, while its manufacturing plant in South Carolina leads U.S. automotive exports by value.
The company also faced setbacks in 2024, with profits plunging over 33% to €7.68 billion ($8.32 billion). This was driven by reduced demand in key markets such as China and Germany, as well as production delays due to issues with brake components. In light of these challenges, BMW lowered its 2024 margin forecast to 6-7%, down from the earlier range of 8-10%.