BMW to Cut One in Five Management Roles as €2 Billion Battery Plant Goes Live

BMW has begun full-scale high-voltage battery production in Irlbach-Straßkirchen while planning to cut about 20 percent of management jobs by mid-2027.

BMW has begun series production of high-voltage batteries at its new plant in Irlbach-Straßkirchen, Bavaria, even as the carmaker embarks on a sweeping overhaul of its leadership ranks and model lineup. Battery assembly at the site has been running since March; Thursday marks the formal start of full-scale output.

The plant forms the centerpiece of a roughly €2 billion investment package for BMW's German manufacturing footprint, about €1 billion of which is earmarked for the new battery facility. In-house production of high-voltage batteries is intended to secure supply for the group's vehicle plants and deepen value creation at home.

Boardroom Slimming Meets Model Cull

Running alongside that industrial build-out is a push to shrink the corporate structure. By mid-2027, BMW plans to eliminate about 20 percent of its management positions, alongside a 20 percent reduction in the number of business units. The cuts fall heaviest on executives at the Munich headquarters.

Below the board of management sit roughly 65 senior vice presidents and some 400 additional executives, according to Bloomberg. Around 100 senior roles could disappear from that pool, with the restructuring expected to reach downstream departments as well. CEO Milan Nedeljkovic has framed the reorganization as a way to streamline the organization and improve the cost base.

The management cull builds on a voluntary-exit program agreed in July 2026 targeting roughly 8,000 job reductions in Germany, mainly in administration as well as research and development — about five percent of the group's global workforce.

Finance chief Walter Mertl is counting on so-called AI agents to shorten development cycles and speed up decision-making. BMW already runs hundreds of artificial intelligence applications, including crash simulations and the review of supplier contracts. Those tools are now set to be deployed more broadly across procurement, sales and marketing.

Margin Pressure Drives the Reset

Behind the belt-tightening lies mounting pressure on returns. With business shrinking in China and US tariffs biting, the operating margin in the automotive segment has fallen sharply. In June, BMW warned that the car division's margin could drop as low as one percent this year.

The group is also reshaping its product range in response. No successor is planned for the 2 Series Active Tourer, and BMW is discontinuing the diesel variants of the 3 Series. At yesterday's Capital Market Day, management reaffirmed its intention to lift the automotive operating margin to between three and five percent by 2028, with a return to eight to ten percent early in the next decade. Free cash flow is targeted at more than €5 billion by 2028 and above €7 billion from the early 2030s.

Competitive pressure on BMW's European home turf is intensifying at the same time. Speaking at the Bavarian battery plant, Nedeljkovic warned of the growing momentum of Asian rivals. Data from industry tracker Dataforce show Chinese manufacturers' share of the European market reached about eleven percent in May 2026, up from less than three percent three years earlier.

Analysts Split as Shares Languish

On trade policy, Nedeljkovic told the FAZ on September 22 that he favors voluntary price agreements over tariffs as a way to counter competition from cheap Chinese auto imports.

Analysts are taking differing views of the transformation. Stephen Reitman of Bernstein Research said in a note yesterday that the company aims to improve returns through a streamlined model range and stronger localization. Tim Rokossa of Deutsche Bank Research cut his price target for the stock from €90 to €78 on Tuesday while keeping a "Buy" rating, according to media reports.

Investors have stayed cautious. BMW's ordinary shares closed yesterday at €55.38, leaving them down 41 percent since the start of the year. That level sits 25 percent below the 200-day moving average of €74.09. For a sustained recovery, the Munich group must now prove that its planned streamlining can stabilize profitability quickly.