BMW Stock Stuck Near Lows Despite 50,000 Orders for New EV Line

BMW slashes margin forecast to 1-3%, sending shares to fresh lows; yet orders for Neue Klasse EVs surge, with 50,000+ iX3 pre-orders and 60% rise in European EV orders.

BMW shares hit fresh 52-week lows on Thursday after the automaker halved its core margin forecast, but a surge in orders for its next-generation electric models is offering a rare bright spot amid the gloom. The Munich-based group now expects an EBIT margin of just 1 to 3 percent in its automotive segment this year, down sharply from the previous 4 to 6 percent target, and slashed its free cash flow guidance to more than €2.5 billion from earlier hopes of over €4.5 billion.

The profit warning, issued on Monday, reflected a toxic mix of headwinds: intensifying competition in China, fallout from the Iran conflict, and elevated energy costs. New chief executive Milan Nedeljkovi? responded by accelerating efficiency programmes, but the scale of the downgrade caught even veteran industry watchers off guard. The stock closed the session at €59.84, just 1.77 percent above its 52-week trough of €58.80. Year-to-date, the shares have lost roughly 38 percent of their value.

China remains the structural fault line. In April, battery-electric car registrations in the country surpassed combustion-engine vehicles for the first time, with roughly 580,000 EVs versus 560,000 ICE units. Combustion-engine registrations have collapsed more than 40 percent since the start of the year. For BMW, that is a direct hit to its lucrative premium ICE franchise. JPMorgan analyst Jose Asumendi warned that European premium makers are now price-uncompetitive against local Chinese EV rivals, and BMW's deliveries in the region recently touched a six-year low.

Analysts are split on whether the punishment is deserved. Barclays' Henning Cosman kept his "underweight" rating and cut his price target to €82.50, arguing the warning signals wider sector trouble — Mercedes-Benz shares also slumped to their lowest since autumn 2020 on Thursday. Berenberg downgraded BMW to "hold" and slashed its target from €86 to €69, citing shattered expectations for margins and cash. Goldman Sachs, however, sees a buying opportunity. Analyst Christian Frenes noted that BMW's net liquidity currently exceeds its market capitalisation, calling the share price reaction overdone. Goldman maintained a "buy" but trimmed its target from €107 to €84.

Against that backdrop, the order pipeline for the Neue Klasse — BMW's next-generation electric architecture — is providing some counterweight. Supervisory board chairman Nicolas Peter confirmed strong demand for the platform, with more than 50,000 orders for the new iX3 already logged since its design debut in September. Battery-electric vehicle orders in Europe climbed more than 60 percent year-on-year in the first quarter, with the iX3 accounting for roughly one in three electric BMW purchases in the region. The plant in Debrecen, Hungary, has already moved to two-shift operation to keep up.

Europe, where BMW's overall deliveries rose 3.1 percent across all powertrains in the first quarter, remains a stabilising force. Electrified models represented 25.3 percent of regional sales, well above the global BEV mix of 15.5 percent. But the key question is whether the Neue Klasse's order success can translate into the margins that have just evaporated. The company plans more than 40 new and refreshed models by 2027, and the first real test will come with the half-year results on 30 July.

Technically, the stock looks deeply oversold: the relative strength index has fallen to 18, a level that historically has preceded short-term bounces. Whether that technical signal outweighs the fundamental wreckage depends on how quickly BMW can turn its electric momentum into sustainable profitability.