With the iX3 and the Neue Klasse, BMW proves it still knows how to generate anticipation: design, Gen6 batteries, and orders already exceeding forecasts. The name was not chosen by chance. In the early 1960s, a range of the same name saved BMW from bankruptcy and forged its modern identity: status-symbol cars, sporty without being exotic, expensive enough to be desirable, and numerous enough to build an industrial model. 65 years later, BMW is reviving the name, this time to avoid becoming just another manufacturer.
BMW has never been solely about image. The group has had neither the mass of Volkswagen nor the rarity of Ferrari. Its strength lay in a rare position: selling at high prices and in high volumes, because the badge justified the premium and internal combustion engines (ICE) yielded high returns. The shift to electric vehicles (EV) weakens this lever: a battery-powered car still has lower margins than an ICE vehicle, as BMW admits, and the entire challenge of the Neue Klasse is to reduce this gap.
Selling as much, earning less
On the sales front, 2025 is holding steady: 2.46 million cars delivered, almost as many as in 2024. MINI jumped by 17.7%, Europe gained 7.3%, the Americas 5.6%, and EVs 3.6%.
The problem is one of profitability: BMW is earning less on each vehicle. The automotive EBIT margin fell to 5.3%, within the targeted range of 5% to 7%. However, this remains far from the 8% to 10% corridor that built its reputation.
Pressure is primarily external: tariffs, both American and European, cost the group about 1.5%. China accounts for the rest. It remains the group's largest market with approximately 626,000 vehicles sold over the year, but it is down 12.5% in the face of local competitors who are slashing prices and mastering software. Automotive free cash flow melted to €3.2bn, from €4.9bn the year before.
The Neue Klasse bet
Management has a plan focused on costs. The iX3 inaugurates a Gen6 battery architecture, promised for 40 models and updates by 2027, while investments are expected to recede. Milan Nedeljković, coming from the production side, embodies this priority given to industrial efficiency. The end, in 2028, of a charge related to BMW Brilliance will restore about 1.2 point of margin—a precious support, but insufficient on its own to return to the historical 8% to 10% corridor.
But none of this is in the accounts yet: Q1 2026 served as a reminder. The automotive margin came in at 5%, compared to 6.9% a year earlier. The product is attractive. It must now be profitable.
The discount has its reasons
At around €72, BMW shares look like a bargain: less than 8x expected profits, a dividend of over 5%, and an expected free cash flow yield close to 12% for 2026, according to DZ Bank. But the discount is logical. Return on equity is around 6.5%, while the cost of capital is nearly 10%: at this level, BMW is not yet covering the return required by its shareholders.
The Neue Klasse can restart the story, but it must above all improve the bottom line. For now, BMW remains a beautiful brand at a low price, with profitability that is still too low.
