BMW Shares Stuck in Oversold Territory as China Dominance and Guidance Cuts Test Bernstein's Conviction

BMW stock slumps 27% below 200-day average as Chinese EV rivals gain share. Oversold RSI at 23.9 hints at reversal if Neue Klasse delivers.

The bull case for BMW rests on a gamble that a new generation of electric vehicles can reverse a slide that has left the stock trading 27 percent below its 200-day moving average. Shares closed Thursday at €60.96, a hair above the 52-week low of €58.80 set in mid-June, and have shed more than a third of their value since the start of the year.

The technical picture is bleak but not hopeless. The Relative Strength Index has dropped to 23.9 – deep in oversold territory – suggesting selling pressure may be running its course. Yet the distance to the 200-day average of €83.40 underscores just how far sentiment has soured.

China is the root cause. A global team from Bernstein Research examined the regional dynamics of electric mobility and found that Chinese manufacturers now control critical raw materials and dominate the entire battery value chain. Domestic players are flooding the market with advanced technology and aggressive pricing, squeezing established premium brands. BMW, along with Audi and Mercedes-Benz, has been steadily losing market share in China since 2020.

The Munich-based group responded in June by slashing its full-year guidance for revenue, operating margin and free cash flow. The new forecast sees a slight decline in automotive deliveries, an EBIT margin of between 1 and 3 percent, and a significant drop in pre-tax profit. Management cited weakness in China and the impact of the Middle East conflict as the main culprits. On the positive side, free cash flow from the car business is expected to exceed €2.5 billion, and the share buyback programme and dividend payout ratio of 30 to 40 percent remain untouched.

Bernstein had previously slashed its price target from €108 to €85 two days before the stock closed near its low, adjusting its estimates for 2026 and beyond. Despite that cut, the house kept its "Outperform" rating – a stance that now implies nearly 40 percent upside from current levels. The same report that flagged China's dominance also highlighted resilience in supply chains as a key area of focus given geopolitical risks.

The competitive threat is visible in European registration data. In May, BYD’s new EU registrations surged 158.8 percent to around 26,000 units. Chery jumped 239.6 percent, and Leapmotor rose an eye-popping 447.3 percent. BMW’s own brand managed roughly 55,000 EU registrations in May with stable year-on-year numbers, while MINI advanced 25.8 percent. Overall, the EU market grew 4.0 percent in the first five months, with battery-electric vehicles capturing a 20.0 percent share, up from 15.3 percent a year earlier.

The hope for a turnaround rests on the “Neue Klasse” architecture, a new electric-vehicle platform that BMW is gradually rolling out across its lineup. Bernstein believes a successful launch could strengthen the company’s competitive position and help close the gap to the €85 target. Whether that conviction is justified will depend on how quickly BMW can stem the margin erosion in its most important market. The next quarterly results will provide the first real test of whether the revised guidance holds.