When it comes to China efficiency, everyone is taking it on the chin these days. And now, as of yesterday, BMW itself has officially joined the down and out crowd. In short, BMW just reported a brutal 37% drop in annual net profit—-meaning, not only is this a clear signal that demand in the world’s biggest auto market is tanking, but between tariffs, local EV competition, and supply chain disasters, BMW is getting absolutely steamrolled.

(Source: Giphy) 

The once-dominant luxury automaker is now stuck in a high-margin death spiral, facing customers who aren’t buying, governments that are taxing them into irrelevance, and suppliers who can’t even get the damn brakes right. Translation: The numbers are ugly—and BMW knows it.

The carnage is as follows: Net profit fell 36.9% to €7.68B ($8.32B), while revenue plummeted 8.4% to €142.4B. Additionally, profit before tax crumbled 35.8% to €10.97B. Meanwhile, automotive EBIT margin slid to 6.1% from 8.1%—because apparently, making money on cars is harder than expected. Oh, and BMW is now projecting an automotive margin between 5-7% for 2025, which is basically their way of saying they have no clue how bad this will get. 

(Source: CNBC) 

The problem here is that BMW has been milking Chinese demand for years, but that faucet is drying up fast. Why? Well for one, Chinese consumers are backing away from premium cars, while local Chinese EV makers (BYD, Nio, Xpeng) are legit signing BMW’s death warrant. And of course, tariffs are making imports even less attractive. 

In fact, BMW is getting hit from all directions when it comes to trade restrictions. For instance, the EU’s anti-subsidy tariffs on Chinese EVs is already going to cost BMW hundreds of millions in 2025—so when you add in Trump's 20% tariff on Chinese imports PLUS China’s 10% large-engine retaliation, BMW’s supply chain is getting it’s own dose of slim-fast. 

(Source: Investing.com) 

Now to his credit, BMW CEO Oliver Zipse is trying to act like tariffs aren’t a big deal, but his comments suggest otherwise: “Everything is connected… The world will see very quickly that this might not be the smartest way to improve your competitiveness.” Translation: Tariffs are screwing us, so now we go to Plan B. Spoiler: There isn’t one. 

In the end, the stock dipped 2% on the news, but honestly, that’s the least of BMW’s problems. Chinese EV makers aren’t slowing down. They’re cheaper, faster, and backed by government support. And tariffs aren’t going away anytime soon. 

(Source: Giphy) 

Sure, BMW built its empire on premium branding and global demand, but right now, both are slipping away. If they don’t find a way to navigate the mess, it’ll get a lot worse. Greaaat. For now though, keep your eyes on auto stocks as the political issues unfold and stay safe and stay frosty, friends! Until next time… 

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Stocks.News does not hold positions in companies mentioned in the article.