BMW Caught Between Index Exclusion and China Slowdown as EV Strength Fails to Propel Shares

BMW's stock faces forced selling after index deletions and weak China demand, despite rising EV sales. Lowered 2026 profit forecast and oversold conditions ahead of key analyst call.

BMW’s stock is being squeezed from two directions. On one side, a technical forced selling wave triggered by the carmaker’s removal from two major indices is adding downward pressure. On the other, the company’s deepening troubles in China and a sharply lowered profit forecast are keeping buyers at bay — even as electric vehicle sales climb in Western markets.

The index departures stem from a structural overhaul of BMW’s capital base. The company converted all of its preference shares into common stock at a 1:1 ratio, a move approved by shareholders on May 13. The change took effect on July 3, eliminating the dual-class structure. With the free float of common shares swelling by roughly 19%, index providers S&P Europe 350 and FTSE All-World reassessed BMW’s eligibility and struck it from their lists on July 1. Passive funds tracking those benchmarks are now forced to sell their BMW holdings, adding a layer of technical selling to an already fragile stock.

Meanwhile, the underlying business is sending mixed signals. BMW Group delivered around 1.15 million vehicles worldwide in the first half of 2026, a decline of 4.2% from the prior year. The electric-vehicle story, however, remains bright: 116,807 fully electric BMW and Mini models were handed over to customers between April and June, a 5.2% gain that was heavily driven by the Neue Klasse iX3’s strong reception in Europe. Mini itself continued its six-quarter growth streak with 149,538 deliveries, up 11.7%. Rolls-Royce bucked the trend, posting a 9.8% drop to 2,523 units in the half.

Regional performance was starkly split. Sales in Europe rose 5.4% and in the United States by 3.9%, outpacing those broader markets. But the persistent weakness in China — where the passenger-car association has repeatedly trimmed its full-year outlook — more than offset those gains. “Despite global challenges, we increased sales in the US and Europe,” said sales chief Jochen Goller. “The Neue Klasse shows strong momentum.” His optimism, however, has not prevented the group from slashing its 2026 guidance. BMW now expects a slight drop in automotive deliveries and an EBIT margin of just 1% to 3%, down from the earlier 4%–6% target. CEO Milan Nedeljkovi? promised to “intensify and accelerate” ongoing cost and efficiency measures.

The stock is trading at around €58.28–€58.50, barely two percent above the 52-week low of €57.06 hit in late June. Since the start of the year, the share price has lost roughly 40% of its value. The relative strength index stands at 31, while some measures put the reading at 31.7 — both signalling deeply oversold conditions. Analysts remain split: LBBW lifted its price target to €85, while DZ Bank cut its fair value to €75 but still sees the stock as undervalued at current levels.

Investors now have two key dates on the horizon. On Friday, management is holding a pre-close analyst call to discuss second-quarter trends. The full half-year report, including financials, is due on July 30. Whatever the numbers reveal, the index-driven selling pressure is unlikely to abate until passive funds have completed their rebalancing — a process that could keep the stock pinned near its lows regardless of any sales momentum in Europe and the US.