BMW has formally changed CEOs at its 106th Annual General Meeting in Munich, with Oliver Zipse handing over the chairmanship of the Board of Management to Milan Nedeljković on 14 May.

The move, announced earlier, ends Zipse’s term on the board and closes a 35-year career at the Bavarian carmaker, seven of them as CEO.

The official farewell was predictably warm. Supervisory Board Chairman Nicolas Peter credited Zipse with having “shaped the development of the BMW Group” and with keeping the company on course through Covid-19, supply-chain disruption, geopolitical turbulence, and the most difficult technological transition the car industry has faced in decades.

In BMW’s own framing, Zipse’s name will remain linked above all to the Neue Klasse, the new electric and software-defined vehicle generation on which the group is betting heavily from 2026 onward.

Never an outsider

Zipse was never an outsider brought in to shake up BMW. Born in Heidelberg in 1964, he studied mechanical engineering and joined BMW in 1991 as a development and production trainee.

His career took him through production planning, South Africa, the MINI plant in Oxford, corporate planning, and product strategy. Before becoming CEO in 2019, he was already a board member responsible for production. That background explains much of his leadership style: less public showmanship, more industrial discipline.

Technology openness

His biggest strategic choice was to resist the idea that BMW had to become an electric-only company as quickly as possible. Under Zipse, BMW defended what it calls “technology openness”: battery-electric cars, plug-in hybrids, efficient combustion engines, and, in the longer term, hydrogen.

Critics saw this as hesitation. Supporters say it allowed BMW to remain profitable while demand, charging infrastructure, regulation, and raw-material costs developed at very different speeds around the world.

The numbers give both sides arguments. BMW avoided the kind of deep EV-related profitability problems seen at some rivals and remained one of Europe’s more stable premium manufacturers.

2.46 million vehicles

In 2025, the group sold 2.46 million vehicles, including more than 442,000 fully electric models. Battery-electric cars accounted for almost 18% of total deliveries, while total electrified sales passed 642,000 units.

Group pre-tax profit still reached more than €10 billion, although the automotive EBIT margin, at 5.3%, remained below BMW’s long-term target range.

Zipse’s achievement was therefore not to make BMW the electric frontrunner, but to keep it financially robust while preparing a deeper transformation. Neue Klasse is meant to be that transformation.

It brings a new EV architecture, more efficient batteries, a new electronics and software backbone, and a new production concept. BMW has presented it as a generational reset comparable in importance to the original Neue Klasse of the 1960s, which helped define the modern BMW brand.

Questions unanswered

Yet Zipse also leaves questions unanswered. The biggest is China. BMW’s sales there fell sharply in 2025, by 12.5%, as local electric brands intensified the price war and accelerated product cycles.

The company hopes the iX3 and the broader Neue Klasse family can stabilize and then recover its position in the world’s largest car market, but that proof now belongs to Nedeljković rather than Zipse.

There were also safety blemishes. The braking-system recall that affected more than 1.5 million vehicles in 2024 forced BMW to cut its outlook and led to higher warranty costs.

EGR cooler hazard

But a more persistent reputational issue is the long-standing fire risk associated with EGR coolers in BMW diesel models. The problem predates Zipse’s term as CEO, but it surfaced while he was already BMW’s production chief and persisted throughout his leadership.

BMW acknowledged in 2018 that coolant leakage from the exhaust-gas recirculation cooler could mix with soot deposits and, under high temperatures, lead in extreme cases to fire.

BMW expanded an earlier EGR cooler campaign in 2018 to around 1.6 million diesel vehicles worldwide, after the issue prompted recalls in South Korea and Europe. But that was not the end of the file.

In 2019, the campaign was expanded again by another 232,000 vehicles, and in 2021, BMW launched a new US safety recall for certain 2013-2018 diesel models, including vehicles that had already been subject to the 2018 recall, because they required an updated EGR cooler.

In 2024, German media reported another major expansion affecting nearly 800,000 BMW diesels in Germany alone, with up to 1.9 million vehicles potentially affected worldwide.

The issue returned to public attention in Belgium this week when VRT’s Pano investigated how recalls around millions of BMW diesel cars have dragged on for years, with owners, garage operators, and international experts testifying about cars that suddenly caught fire.

Undoubtedly, BMW’s reputation as a premium German brand also plays a role here. To our knowledge, not many people were physically hurt by the fire incidents, but, of course, the financial impact for the BMW owners can be substantial. The Takata airbag scandal had far bigger consequences for a lot of manufacturers, also with serious physical injuries and even death toll, but the reactions in the press were often more discreet and condoning.

One should also question the regulatory responsibility of the EU authorities. Europe, which seems to have rules for everything, is clearly negligent in some aspects of vehicle safety and in the controls it must exercise in these matters.

Giving BMW political weight

In Europe, Zipse’s repeated criticism of a fixed 2035 phase-out for combustion engines made him one of the industry’s most visible opponents of a one-track regulatory approach.

That stance gave BMW political weight, including through his role as ACEA president, but it also made him a divisive figure in the climate debate.

Nedeljković’s appointment signals continuity rather than rupture. Like Zipse, he is a BMW lifer with a background in production. Born in 1969, he joined the company in 1993 as a trainee and has managed plants including Oxford, Leipzig, and Munich.

Since 2019, he has sat on BMW’s board as production chief and has been closely involved in preparing the global manufacturing network for electrification. His contract as CEO runs until 2031.

His main task is now execution. The strategy has largely been set: launch Neue Klasse without delays, scale EVs without destroying margins, defend BMW’s premium pricing, and regain momentum in China while navigating US tariffs and Europe’s slower-than-expected EV market.

He must also prove that BMW’s flexible drivetrain strategy can remain an advantage as regulations tighten and Chinese competitors bring faster, cheaper electric cars to Europe.

Nedeljković inherits a company that is far from broken, but not comfortably ahead either. Zipse’s BMW stayed profitable, independent-minded, and technologically broad.

His successor must now show whether that caution was wisdom, and whether Neue Klasse can turn BMW’s careful transition into a new growth phase.