BMW reported a sharp drop in first-half profits on Thursday, weighed down by US tariffs, currency headwinds from the dollar, and challenging business conditions in China.

The Munich-based automaker reported a post-tax profit of €4 billion, down 29% from the same period last year, marking the third consecutive decline in the first half for the company.

Despite the setback, BMW’s profit fall was less severe than that of some German rivals. Volkswagen and its Audi unit each lost more than a third of their earnings, while Mercedes-Benz’s profit dropped by more than half.

Tariffs

BMW did not disclose the exact cost of US tariffs for the first half of the year. However, it expects tariff-related costs, including a 31% duty on its electric Minis imported from China to the EU, to reduce its automotive segment margin by about 1.25 percentage points this year, potentially costing the company a figure in the billions.

Despite higher tariffs, the BMW Group’s business model remains intact. “Our popular premium vehicles, global competitive strength, and high level of resilience provide us with a strong and sustainable foundation. Our footprint in the US is helping us limit the impact of tariffs,” said Walter Mertl, member of the Board of Management responsible for Finance, during the quarterly conference call in Munich.

“Thanks to precise financial control, based on calculated forecasts, we are firmly on track to achieve our targets for the year at the six-month mark. Higher efficiency and optimised cost structures also contribute to achieving our financial goals,” he added.

Earlier forecast retained

Despite these challenges and intense competition in China, particularly in the electric vehicle segment, BMW maintains its full-year guidance, targeting a pre-tax profit roughly in line with last year’s €11 billion. With €5.7 billion in pre-tax profit already booked in the first half and an EBT margin of 8.5%, the company is on track to meet this goal.

“The BMW Group showed strong resilience in the first half of the year, building on a solid foundation of consistent strategy, robust customer demand, sustained cost discipline, and high flexibility,” says the press release.

The Automotive Segment EBIT margin came in at 6.2%, placing it in the upper half of the 5.0-7.0% annual target range, published in March. The segment’s free cash flow for the first half of the year was €2.345 billion.

“Our performance in the first half of 2025 once again underscores the robustness of our business model,” said Oliver Zipse, Chairman of the Board of BMW AG. “Our success today, as well as in the future, is based on three strong pillars: our global footprint, our strength in innovation, and our technology-neutral approach with highly attractive products.”

“In September, we will begin a new era for BMW when the first vehicle of the ‘Neue Klasse’ makes its debut at the IAA Mobility. With the BMW iX3, we are kicking off an unprecedented product ramp-up: by 2027, we will launch more than 40 new and revised models across all segments and drive types,” Zipse added.

“Each vehicle will embody the innovative technology clusters and the new design language. This way, we connect technological advancement and exciting products with strategic foresight and economic efficiency,” he concluded.

Growth all over the world, but not in China

By offering various drive technologies and a comprehensive range of models, the premium manufacturer from Munich can cater to diverse customer preferences, reporting growth across multiple markets.

“Outside of China, BMW deliveries rose across all sales regions, with the brand recording a slight growth of 4.7%,” says the press release. Benefiting from the complete availability of the New MINI Family, the British brand reported a significant 17.4% growth in the first half of the year, with a total of 133,838 vehicles sold. MINI deliveries increased in all regions of the world.

In Europe, the BMW Group reported solid sales growth of 8.2%, with 498,670 units sold (Q2 deliveries: 256,487 units, up 10.2%). In the Americas region, deliveries increased by 3.4% to 237,972 vehicles (Q2: 123,254 units; +1.7%).

Deliveries in the US market increased by 2.7% year-over-year, with a total of 193,826 vehicles delivered to customers (Q2: 98,856 units, +1.4%). There was no mention of the sales performance in China in the press release.

Electrified models and BMW M with increased sales

With a 26.4% share (Q2: 26.0%) of total sales in the first six months, more than one in four BMW Group vehicles delivered —precisely 319,031 units were electrified. Europe recorded the highest growth rates for BEVs and PHEVs, at +34,8%.

Alongside electrified vehicles (+6.5%), the high-performance models of the BMW M brand were the primary growth drivers for the BMW brand. With nearly 106,000 vehicles sold (+6.5% compared to H1 2024), BMW M GmbH reported its highest first-half-year sales in its history.

MINI and Rolls-Royce

MINI’s sales growth also stemmed mainly from MINI BEVs: the MINI Cooper Electric, the MINI Aceman Electric, and the MINI Countryman Electric. With a 34.3% share in the first half of the year, more than one in three MINIs delivered to customers worldwide were battery-electric.

In the first half of 2025, the Rolls-Royce brand almost matched the previous year’s strong sales performance, delivering 2,796 handcrafted luxury motor cars to customers (-0.8%). In the second quarter, it increased its sales by +9.4% year-on-year to 1,415 units.

Two-wheelers

In the year to the end of June, BMW Motorrad delivered 105,909 motorcycles and scooters to customers (2024: 113,072 units; -6.3%). The segment EBIT margin came in at 12.0% (2024: 11.6%)