BMW’s EV Revolution Gains Traction, But Tariffs and Margin Warning Weigh on Shares

BMW's iX3 sees strong orders and Neue Klasse launch, but tariffs and margin pressures drive stock down 22% with a profit warning for 2026.

Milan Nedeljkovi? has barely settled into the CEO’s office at BMW Group, and already he faces a paradox that defines the carmaker’s moment. On one side, demand for the company’s next-generation electric vehicles is surging — the iX3 alone has racked up more than 50,000 orders in Europe, and the waitlist for new buyers in Germany stretches into 2027. On the other, tariffs and margin pressure have knocked the stock down roughly 22% since the start of the year, leaving it trading just above its 52-week low at €74.78.

The contradictions played out in full view last weekend at the Concorso d’Eleganza Villa d’Este on Lake Como, where BMW showcased its luxury ambitions. Two concepts stole the spotlight: the Vision BMW ALPINA, designed to cement the brand in the premium segment, and the motorcycle division’s Vision K18. The event also saw a historic BMW 328 racer take the “Best of Show” title, reinforcing the company’s heritage-driven marketing to wealthy buyers. But the glitz of the lakeside extravaganza contrasted sharply with the dour reality on the trading floor, where the stock fell 2.43% on Friday alone and is now 13% below its 200-day moving average.

Underpinning the share-price rout is a stark profit warning embedded in the company’s own guidance. BMW expects an EBIT margin for its automotive segment of just 4% to 6% in 2026 — well below its targeted range of 8% to 10%. Tariffs are the primary culprit, eating roughly 1.25 percentage points from margins despite mitigation efforts. Analysts currently see revenue reaching €133.5 billion, a modest 2.2% increase, but the cost of the electric transition is squeezing per-vehicle earnings even as order books swell.

The Neue Klasse platform is the centrepiece of that transition. The iX3, the first model built on the architecture, began customer deliveries in Europe in March, and first-quarter battery-electric vehicle orders in the region jumped around 40% year on year. More than half of all X3s now being ordered are fully electric. BMW is pressing ahead: the iX3 will soon be joined by a new i3, which will start production at the Munich plant in August 2026 with first deliveries slated for autumn. The company claims a WLTP range of up to 900 kilometres for the saloon. A locally built iX3 variant for China is also scheduled to debut in summer 2026, tailored to local tastes, as the group navigates a market that remains difficult but where it has outperformed the broader industry.

Meanwhile, BMW is reshaping its capital structure. Shareholders at the annual general meeting on 13 May 2026 approved a dividend of €4.40 per common share, up from €4.30 a year earlier, with payment due on 19 May. More significantly, the company is merging its common and preference shares into a single class. Preference holders will gain voting rights from the 2026 financial year onward, and future dividend distributions will be uniform across all shares. CFO Walter Mertl noted the move could increase BMW’s weighting in key indices, where common stock is the primary reference.

For Nedeljkovi?, the immediate challenge is to keep the delicate balance between volume and profitability. The iX3’s strong take-up helps utilisation and pricing power, but tariffs and high upfront investment on the Neue Klasse are compressing margins. The luxury offensive at Villa d’Este — a direct move to defend pricing at the top end — is one piece of the puzzle. The next big test comes on 30 July, when BMW releases its quarterly report, and investors will be watching to see whether the iX3 delivery curve can rise fast enough to pull the margin story back into the 8%-to-10% target band. Until then, the stock looks trapped between EV euphoria and tariff gravity.