Q4 2025 Bayerische Motoren Werke AG Earnings Call

Speaker #1: We unleash a new dimension of driving pleasure. The heart of joy integrates drivetrain and dynamics, thrilling fans of the ultimate driving machine. But whether you are pushing boundaries or navigating daily routes, you will experience driving pleasure like never before.

Yeah.

[music].

Speaker #1: And with cutting-edge assistance systems, driver and vehicle become one. This is BMW Symbiotic Drive. With the all-new BMW Panoramic iDrive, we change the game again.

Speaker #1: No more looking down at the screen. This innovation offers immersion and safety. Hands on the wheel and eyes on the road, on the next level.

Speaker #1: And all integrated by our all-new super brain architecture. Four powerful computers process data 20 times faster than before. Our system allows us to separate hardware from software.

2025 was in many ways a remarkable year for the BMW group and the Buffalo, one that set our course for the future.

Speaker #1: Flow developed positively in Q4, and reached €3.2 billion at year-end. This was in line with our expectations of above €2.5 billion for the year.

First we achieved a solid financial results with group earnings of more than 10 billion euros.

Speaker #1: With AI, we redefine possibilities, making each new BMW a pioneering, software-defined masterpiece. This is one of the keys to staying ahead in the innovation race.

Multi mountain will provide more detail in just a moment.

Speaker #1: Our financial strength is further underscored by our automotive net financial assets at year-end. This came in at over €44 billion. Let's now turn to our Financial Services segment.

Second we grew in 2025, selling more vehicles than the previous year and expanding our leadership of the global premium segment.

Speaker #1: Ladies and gentlemen, by the end of 2027, we will have rolled out 40 cars with Neue Klasse DNA. That's incredible speed. We are very busy.

And third.

Speaker #1: As a key component of our BMW ecosystem, the segment consistently contributes to group profitability. In 2025, new business developed positively throughout the year, with nearly 1.73 million new financing and leasing contracts concluded.

Our technology open strategy continued to demonstrate its strength.

Speaker #1: And we will stay that way. And now, I'm very proud to reveal the first of many—the dawn of the new BMW era: the all-new BMW iX3.

Demand for cars with combustion engines remains stable.

Sales of our all electric and electrified vehicles.

Continue to grow.

And fourth once again through our own efforts, we significantly outperformed the eight use C O two fleet targets for 2025.

Speaker #1: This represents growth of almost 2% year on year. The increase is due in particular to the positive business development in Europe, as well as the changed competitive environment in China in the second half of the year.

And finally.

We successfully began the rollout of our anoia cluster with the BMW I X three giving the BMW brand and the entire company crucial momentum for the future.

Speaker #1: Since the end of June, the market situation has been influenced by the significant reduction in commissions from the local Chinese banks in connection with the brokering of financial and insurance products for end customers.

And all of this shows we deliver consistently and continuously.

Speaker #1: Penetration rates for lease and loan offerings increased by 4 percentage points to 46.6%. Overall, new business volume at Financial Services reached an all-time high, growing by 2% to €65.8 billion, despite negative currency effects.

We have set the right course in recent years and do not need to change our strategic direction.

In this way we can keep the company on track for long term success.

Standing here beside me as the new BMW I X-ray.

This vehicle marks a pivotal moment in the BMW group's recent history the series launch of our <unk> cancer.

Speaker #1: Segment earnings before tax reached €2.4 billion. The moderate decrease compared to 2024 is due to lower income from the resale of end-of-lease vehicles, as well as a tax payment related to changed assessments of operating taxes from previous years.

Production of the IX III has successfully ramped up at our new plan interprets and in Hungary.

Speaker #1: Welcome, ladies and gentlemen. Yes, the big moment has finally come. And as Joachim mentioned, with the Neue Klasse we are taking very big steps in technology.

<unk> customers have for already received their vehicles and since last week. The ay ex Sri has been in European showrooms.

Speaker #1: Residual value remained positive but lower than the previous year. The credit loss ratio of 0.28% was within our expectation. Return on equity for the full year reached 14.3%, and therefore was within the guided target corridor of 13–16%.

Demand for the <unk> three is significantly exceeding our expectations with strong orders from both private and fleet customers and.

Speaker #1: And these big steps in technology can only become meaningful hand in hand with big steps in design. In the exterior, we have typical solid BMW SUV proportions.

And we are also attracting many new customers, who have never driven a BMW you before.

Speaker #1: Ladies and gentlemen, in 2025, the BMW Group achieved group earnings before tax of €10.24 billion. Thanks to a stable year-on-year profit attributable to shareholders of BMW AG, amounting to €7.29 billion, the Board of Management and the Supervisory Board will propose to the Annual General Meeting a total dividend payment of €2.6 billion.

Our order books for the I X three are full and rich well into this year.

Speaker #1: With a lot of presence on all four wheels. The surfaces are very clean, emotional, with just a few precise lines. The front end shows a new interpretation of the BMW typical face, in which we replace chrome with light.

We are exploiting the flexibility of our production and supply network and increasing capacity in line with demand.

Noah Clauser represents a huge investment.

Only a company that enjoys long term economic success like the BMW group can invest in its future on such a massive scale.

Speaker #1: Vertically oriented kidneys match the more overall upright appearance of our SUV. This new light signature is part of the daytime running light, and it will make the new BMW iX3 very recognizable by day and by night.

This success is built on three important parameters I like to call. This the BMW group's strategic triangle.

Speaker #1: The proposed dividend represents a payout ratio of 36.6%, which is consistent year over year and in the upper half of our strategic target range of 30–40%.

First our balanced global positioning in sales and production.

Second our attractive product lineup across all brands, serving the entire premium segments and third our consistent strategic focus on technology openness.

Speaker #1: This amounts to a dividend of €4.40 per share of ordinary stock, and €4.42 per share of preferred stock. Additionally, we completed the second share buyback program in early 2025.

Speaker #1: Overall, the car has a very solid stance and strong shoulders. And in the rear, again, a new light signature that emphasizes the width of the car.

I will talk about the last two points in the second part of my remarks after Volta metal has spoken.

Speaker #1: We forestarted the third program after the AGM in May. The total from both programs amounted to a payout of €1.25 billion in 2025.

Speaker #1: In the interior, you will find that the driving experience is and will remain our focus: putting the driver at ease and in control. The key element to this is our all-new BMW Panoramic Vision.

In 2025, we delivered around 2.46 million vehicles to customers worldwide, representing sales growth of <unk>, 5% compared to the previous year.

Speaker #1: Our third share buyback program will run until April 2027. We are currently running the second tranche of this program, with a volume of €625 million for ordinary shares.

And this shows that our business model is robust and resilient.

Speaker #1: It projects in the bottom of the windscreen and builds upon our years of experience with head-up displays. This new display is visible for all passengers on board and will allow you to quickly check the information you want and need.

In Europe, we increased our sales by more than 7% delivering more than 1 million vehicles to customers in Europe for the first time since before Covid.

Speaker #1: That will be completed by August 31, 2026, at the latest. The third tranche is earmarked for after that. For the financial year 2025, the total shareholder return of close to €4 billion, comprising the proposed dividend and share buybacks, exceeds free cash flow in the automotive segment.

We also made significant gains in the United States of America with growth of 5% even in a saturated market.

Speaker #1: Together, with our three-cut central display and our iconic steering wheel, these elements are the cornerstones of our new Panoramic iDrive system—a whole new driving experience.

In our markets outside the main sales regions of Europe, the United States and China. We also posted growth despite the overall downward trend with.

Speaker #1: This further underscores our commitment to capital returns. That brings me to our outlook for the current financial year. What are our expectations for 2026?

With an increase of three 4% over the previous year.

Speaker #1: And you will find it in all of our future BMW models from now on. This new user experience already starts when you approach the car and continues as you get in.

China remains our largest single <unk> market.

Speaker #1: In Europe and the USA, we see some growth potential. In China, we have responded to the market environment by taking a number of steps to stabilize transaction prices.

However, due to the intense competitive market environment, our sales development fell short of our expectations for the year.

Speaker #1: With My Modes, you can select a perfectly curated driving experience—from screen content to ambient colors to sound and even driving characteristics. This will allow you a much higher level of personalization, making your BMW truly yours.

And thanks to the strong overall performance in three of our four sales regions. We nevertheless achieved growth worldwide.

Speaker #1: Average sales figures over the past few months indicate that sales in China could reach last year's level. Consequently, we forecast global deliveries of BMW, MINI, and Rolls-Royce vehicles to be at the previous year's level.

And this confirms the strength of our global footprint.

Our worldwide presence is a decisive competitive advantage.

Speaker #1: Due to model cycle effects, as well as shifting regulatory and market dynamics, we also expect the share of fully electric vehicles to be at the same level as the previous year.

And all BMW group brands contributed to this result.

Speaker #1: At the same time, we created much cleaner and warmer interiors that feel like a personal environment on four wheels. So, starting with the BMW iX3, we are introducing a new form language.

Electrified models across all brands as well as the models from BMW M were the main growth drivers.

Speaker #1: Turning to auto EV development, we continue to work diligently on reducing costs and will see tailwinds from reduced investments: lower manufacturing and material costs, declining R&D expenditure, as well as reduced SG&A, in the 2026 financial year.

The BMW brand once again maintained its position as the global number one in its segment.

Demand was particularly strong for core markets like the X one the <unk> III and the X five as well as our three serious and five serious models.

Speaker #1: It will lead us to a new look and feel for the entire BMW brand. Our designs will be very clean, and at the same time, very strong in character.

Speaker #1: We anticipate a negative impact of approximately 1.25 percentage points from tariffs on the auto EV margin. Compared to the 1.5% in 2025, given the significant investments made into Neue Klasse in preceding years, we will see a material increase in depreciation and amortization from both CapEx and capitalized R&D.

BMW M continued its success story and impressive style in 2025, increasing its sales for the 14th consecutive year.

Speaker #1: And, above all, more BMW than ever. Thank you very much.

With more than 213000 vehicles delivered to customers M reached a historic all time high the BMW M five and M. Five Turing and the X. Three M 50 were the main drivers of the success.

Speaker #2: Thank you, Oliver. Ladies and gentlemen, konnichiwa. Forty new BMW models in just two years—a truly unrivaled wave of product innovation. And the very high customer interest in our Neue Klasse shows: the future starts here.

Speaker #1: While we will continue to make significant reductions in R&D expenditure, the additional depreciation and a lower capitalization ratio, which is expected to be in the 30% area, will result in a significant P&L burden.

This provides compelling proof of the enduring appeal and growing demand for top level performance in the premium segment.

Speaker #2: Now let's turn to a brand where the future is already reality—a brand with a huge fan base, especially here in Japan. And of course, I'm talking about MINI.

Many achieved significant growth thanks to its new module family.

Speaker #1: Other headwinds in 2026 include FX and raw materials, the measures taken in China to stabilize transaction prices, and, finally, lower income from used car remarketing.

Sales increased by nearly 18% compared to the previous year.

The main growth driver was the most versatile model in the lineup the mini countryman accounting for over 32% of the brand's total volume.

Speaker #2: The new MINI family introduced just last year is the brand's most complete and desirable product lineup ever. It is featuring an array of distinct models: Cooper, Aceman, Countryman, and Convertible.

Speaker #1: The reductions we will achieve on the cost side will not fully offset these headwinds. We, therefore, expect an auto EV margin in the corridor of 4–6% in 2026.

Many and Electromobility are a perfect fit and our customers clearly agree.

This is underscored by an impressive achievement in 2025.

Speaker #2: All of them more MINI than ever before. With a clever use of space, wheels at the corners, unique go-kart feeling, and this combined with genuine Britishness and maximum individuality.

Speaker #1: The corresponding ROSI in the automotive segment is forecast to be between 6% and 10%. In the financial services segment, we again anticipate a return on equity of 13% to 16%.

For the first time the brand delivered more than 100000, all electric models to customers in a single year.

That is more than one in every three minutes delivered.

Speaker #2: And these core elements have made MINI the world's most exciting, premium small car brand. And in MINI's unique success story, Japan is a standout chapter.

And in this way many is making a major contribution to the electrification of the BMW group.

Speaker #1: Putting this all together, we expect group earnings before tax to be moderately lower than the strong result in 2025. The full 2026 outlook for all key performance indicators is available in the BMW Group Report.

At our ultra luxury Rolls Royce brand the number of hand built motor cars delivered to clients through made on the high level of the previous year.

Speaker #2: So, let me take you behind the story. In the 1980s, global Mini production was set to be stopped. However, the former Japanese importer successfully lobbied to continue Mini production solely for Japan.

The value and number of request for highly individualized bespoke continued to increase.

Speaker #1: In addition, we expect the free cash flow in the automotive segment at the year-end to be over €4.5 billion. Ladies and gentlemen, for 2026, we will continue to systematically implement our strategic course.

And the hub overall choice at Goodwood is currently being modernized and expanded to provide more space for both bespoke and the marks pinnacle coach built products.

Speaker #2: And the impact was striking. The Japanese MINI fan base grew exponentially, and the spillover effect was so strong that MINI soon resumed global production.

Speaker #1: Particularly with the launch of the Neue Klasse product offensive and the rollout of its technologies across the portfolio, we will leverage flexibility in our global business model to tackle the challenging and dynamic operating environment.

BMW went taut confirmed its strong market position in the premium segment in the financial year of 2025 despite.

Speaker #2: And eventually, in the late '90s, the BMW Group acquired the brand. And the rest is history. So one could say, Mini without Japan would be almost unthinkable.

Despite the global decline in the total market for Motorcycling is above 500, <unk> the brand delivered more than 200000 vehicles for the fourth year in a row.

Speaker #2: And, having worked myself for MINI many years in several functions, I would like to thank you. And MINI and we will never forget this.

Speaker #1: At the same time, we will manage our operational business with continued focus on cost discipline. This will enable us to deliver financial results in line with our guidance and generate strong returns to shareholders.

And most notably the our 1300 T S and F. 900. She has played a key role in BMW is mature market success in 2025, ladies and gentlemen, all of this shows that our multi brand premium approach enabled stability and growth.

Speaker #2: So, ladies and gentlemen, throughout its 66-year-long history, Mini has inspired countless celebrities and designers alike. One co-created edition stands out as arguably the most British and most iconic.

Speaker #1: Ladies and gentlemen, let me pick up on Oliver Zipse's comments regarding sustainability and CO2 emissions before I hand back over to him. For the BMW Group, we view sustainability holistically and as a competitive advantage.

Another major strengths of our business model is our ability to meet diverse customer preferences.

Speaker #2: The first Mini Paul Smith edition. It is an all-time classic and made waves across the globe. However, also here, one country stood above all, with more than half of the cars being delivered.

Different regional requirements and technological developments in parallel.

Speaker #1: That is why we, in our annual reporting, disclose our sustainability performance fully to our investors and customers. In line with our strategy, and our commitment to the Paris Climate Agreement, the BMW Group considers the CO2 emissions of vehicles.

Our electrified vehicles provide the clearest proof of this.

In 2025, we delivered more than 640000 electrified vehicles to customers worldwide.

Speaker #2: Of course, Japan, where Sir Paul almost enjoys rock star status. And this proves that when two true British design icons join forces, the result is the perfect match.

And that means they accounted for about 26% of our total sales with all electric vehicles, making up around 18%.

Speaker #1: Both for the new and existing fleet, over the entire lifecycle—from raw material extraction and parts production, to the manufacture of vehicles, and across the use phase, to the vehicles' end of life.

Speaker #2: And, continuing the successful cooperation, we are truly delighted to celebrate today the world premiere of the all-new MINI Cooper Paul Smith Edition. And who better to introduce it than Sir Paul Smith himself.

Europe stands out in particular with electrified vehicles, representing over 40% of sales.

Plug in hybrids, where also in strong demand in 2025.

Speaker #1: We address all stages of the value chain with ambitious targets. However, European CO2 fleet emissions regulations focus only on the use phase, and do not recognize the full reduction potential along the entire value chain.

And all of these factors make the BMW group one of the leading providers of electro mobility in the premium segment.

Thanks to our balanced mix of efficient drive technologies and growth in electrified vehicles. We once again outperformed the league C O two requirements in the European Union.

Speaker #3: Before I finish this, let me take you to where it all started. Because every detail is adored, waiting to be opened. Mini and I go way back.

Speaker #1: When it comes to reporting, emissions shown in sustainability statements do not always correlate to the actual generation of emissions of all vehicles on the roads.

Based on our preliminary internal calculations, we achieved fleet emissions of 90 grams of Cotwo per kilometer in Europe in 2025.

Speaker #3: What a journey to get here. Oh, stripes. Stripes have followed me since the beginning. Sometimes they're obvious, and sometimes they're just quiet little twists.

Speaker #1: For the 2025 financial year, the BMW Group reporting includes all vehicles sold in the year, across the lifecycle. This includes the CO2 emissions from the supply chain for vehicles produced in the reporting year, from BMW Group production, and from the assumed use phase of 200,000 km for vehicles delivered in the reporting year, based on the consumption mix of the reporting year.

And once again Blazers as well below the league a target internally through our own efforts.

Speaker #3: Color isn't just visual. It's emotional. It tells stories. Like Nottingham Green—it reminds me of home. Unless you need to go to the toilet.

We do not need to rely on pooling with other manufacturers or even averaging over several years.

This provides clear evidence that technology openness and effective climate protection are not mutually exclusive but go hand in hand.

Speaker #4: People say I'm a collector.

Speaker #3: But I prefer curious.

Speaker #4: That's a fine-looking rabbit.

Speaker #3: Just like London in the morning, every day is a new beginning.

Speaker #1: And from end-of-life disposal for vehicles produced in the reporting year. However, the use phase emissions reported in line with European frameworks in 2025 do not consider all existing BMW Group vehicles still in use.

The BMW group remains fully committed to the goals of the Paris climate agreement, while setting our own ambitious targets.

Speaker #4: So why don't you try something new and just see what happens?

Speaker #3: This isn't just one car. It's across the entire Cooper range.

For example by 2035, we aim to reduce our C. O two emissions by at least 60 million tons compared to 2019 levels and we intent to hold ourselves accountable to this target.

Speaker #4: And I can't wait to share it with you.

Speaker #1: But rather only those vehicles sold in the reported year. This means that the European reporting frameworks neglect the reduction potential of the existing vehicle fleet.

We're targeting our own course, something that is more important now than ever before.

Speaker #1: Here, there is significant leverage to quickly contribute to CO₂ reductions through use of e-fuels and carbon-neutral fuels such as HVO100. Immediate credits should be given starting, for example, in 2027, for the CO₂ reductions achieved using sustainable fuels.

On the one hand, we see that regulatory frameworks in individual markets can be extremely volatile and.

And on the other we are convinced that the European Union experiment of mandating electrification will not deliver the desired results to the contrary.

Speaker #3: Sir Paul, hello. Great to have you here. Very nice to be here. Oh, look at everybody—lovely.

Speaker #4: Hello.

Speaker #1: Which should not be subject to limitations, such as caps on specific RAM per km values. The European regulatory framework should reflect this holistic approach towards reducing overall emissions in the here and now, in both the new and existing vehicle fleet.

Speaker #3: Listen, Japan, you, MINI—all things are coming together. So, what does it mean to you here?

For this reason we continue to pursue our long term holistic decarbonization strategy, we are committed to providing solutions not only for new vehicles, but also for the existing fleet on the roads based on technology openness across the entire lifestyle of our vehicles.

Speaker #4: I mean, I've been coming to Japan since the 1980s. I loved Japan. I loved the Japanese people. And so, to launch the Mini here in Japan is a dream.

Speaker #4: A dream come true. And thank you. Thank you very much. And Japan has been so important to Mini, absolutely. Yeah, yeah. I have 140 shops here, I think.

Speaker #1: Because ultimately, every gram of CO2 saved counts. That is what we at the BMW Group believe, and what makes a true societal impact. I'll now hand back over to Oliver Zipse to provide additional strategic insights for 2026 and beyond.

And for this reason, we also integrate fuels such as E V O 100, and advocate for 100% credit in C O two calculations.

Speaker #3: OK. Very good. Listen, in the clip, there was your motto: "Every day is a new beginning." And it's right here in the edition, together with your stripes.

And in addition, recognizing and crediting green steel would strengthen the European steel industry and safeguard drops in Europe.

Speaker #4: That's true.

Speaker #3: So what is behind the motto and the stripes exactly?

Speaker #4: Well, what I tried to do with the car is—the car is beautiful anyway. So, we just... I'm famous for color. When you open the door, here on the floor, it says, "Hello." So it's a welcome.

Using more recycled materials in new cars reduces our climate footprint as demonstrated by Illinois cluster.

Our holistic abroad strength since European value chains, and keeps the industry competitive.

Speaker #4: And then inside, it says, 'Every day is a new beginning.' And that's because every day is a new beginning. So, you know, let's be optimistic.

And at the same time and enables effective climate protection and real C U two reductions.

Speaker #4: Let's enjoy the day. And this is full of optimism. Happiness.

Companies should be free to provide solutions geared towards customer needs. While also investing in appropriate new technologies to meet the European Union's climate goals.

Speaker #3: So, biggest market UK, second biggest market Japan for you. Is that true?

Speaker #4: That's right. Yeah, absolutely. Yeah.

Speaker #3: OK. Listen, basically, you know, this car comes across many Coopers. So it's not just one, but all Cooper are coming with the Paul Smith edition.

Yeah.

As a global player we stand for free trade and global collaboration we do not believe in protectionism, but rather in the power of innovation to compete on the global stage. However.

Speaker #3: So which one is your favorite one?

Speaker #4: That's a difficult question. Yeah. Can I have one of each, please?

However, with the industrial X Later Act the EU Commission is continuing its protectionist course, while not addressing homemade challenges like high energy prices.

Speaker #3: That's not in the budget, unfortunately.

Speaker #4: This big one. This one?

Speaker #3: Yeah, no, lovely. Beautiful. I hope you like it, everybody. It's really so special.

And one thing is clear.

Without international value chains, the ramp up of remote Electromobility and the development of powerful battery technologies are not feasible.

Speaker #4: So just to make it clear, the Sir Paul Smith edition comes across all the Cooper models.

Speaker #3: Yeah.

Speaker #1: Ladies and gentlemen, looking ahead to this year and beyond, three key factors will be decisive. First, for our 2026 targets, the product lineup is currently available, which we have built up gradually.

Speaker #4: Whether it's a convertible or the Cooper, you have the choice. Listen, ladies and gentlemen, every day is a new beginning. And actually, what better way to close our press conference?

Labels, such as made in the European Union or Union origin disadvantage European companies with the global value change if they do not recognize that each euro spent in Europe counts the same for prosperity and jobs.

Speaker #4: Because here at BMW and MINI, we are leaving you with a sense of optimism, of what is ahead. So arigato gozaimashita. Thank you very much.

Speaker #1: Over the past few years. And second, for this year and the years to come, the rollout of additional Neue Klasse models and integration of its technologies across the entire product range.

No matter if the car stays in Europe or is exported.

Speaker #4: And goodbye.

Instead, the development of expertise and production for battery cell technologies in the EU should be promoted and effectively incentivized as fast as possible.

Speaker #1: And third, the tech clusters of the Neue Klasse, which enable rapid advances and collaboration with leading tech players worldwide. Let's start with the first item. The company's current product portfolio, across our BMW, MINI, Rolls-Royce, and BMW Motorrad brands, offers a range of premium options in all key segments.

This year together with policymakers, we must find realistic solutions that allow us to achieve our climate goals and to strengthen our economy and competitiveness.

Ladies and gentlemen, 2025 was shaped by very different developments.

Speaker #1: From MINI, in the urban compact car segment, to Rolls-Royce in the ultra-luxury class. At the beginning of this year, we added another highly exclusive dimension to our brand portfolio: BMW Alpina.

Strong growth in Europe, and the United States.

Much more challenging situation in China, rising competitive pressure and additional headwinds from tariffs.

But nevertheless, the BMW group continues to deliver a stable performance because we acted early.

Speaker #1: The long-established BMW Alpina brand embodies maximum performance and exceptional driving comfort, combined with unique options for individualization. This makes it an ideal addition to our existing product range in the segment for individually highly customized vehicles.

We adjusted our internal cost structures and maintained our strategic direction.

This combination of strong operating performance today, and a clear long term perspective is a crucial success factor for our company.

And that brings me back to the vehicles standing next to me.

Speaker #1: In this way, we are tapping into a highly profitable segment with great growth potential, positioned above the BMW brand's top models and below our Rolls-Royce luxury brand.

The IX, Sri and the technology of the noy classroom testify to our innovation and performance and it underlines that we are already ahead.

Alterra mountain will explain in more detail how our strong operating performance is reflected in our financial figures.

Speaker #1: Overall, the BMW Group offers one of the industry's most comprehensive and diverse premium portfolios. A core strength of this lineup is our consistent focus on technology openness.

We will then take a look at 2026 with more new products underway.

Speaker #1: We committed early to a market-driven mix of different drive technologies. With this approach, the BMW Group continues to chart its own course, enabling us to systematically respond to the diverse requirements of markets and customers well into the future.

[music].

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Okay.

Yes.

Speaker #1: Because we chose this path early, making the necessary investments at the right time, we can now fully realize the market potential of our products.

Yes.

Yes.

Okay.

Okay.

Speaker #1: Today, we offer battery electric vehicles in all relevant segments. And by the end of the year, we will have a total of 20 BEVs across all brands.

Yeah.

Speaker #1: This will further strengthen our competitive position. And at the same time, plug-in hybrids also remain important. And this is not just a bridging technology.

Yeah.

Speaker #1: For many people in all regions of the world, they are the only way to integrate electric, locally emission-free mobility into their everyday lives. Together with our range of highly efficient combustion engines, this approach provides maximum flexibility, ensuring that regional market opportunities can be consistently exploited.

Good morning, ladies and gentlemen.

For the BMW group 2025 was marked by fully leveraging our operating model to deliver solid results in the face of the challenging environment.

The year was heavily impacted by tariffs.

Elements on currency markets, especially in the second half of the here.

Speaker #1: And this strong lineup lays the core foundation for the company's business success in 2026 and beyond. At the same time—and that brings me to my second point—we are systematically building on our current advantage with the Neue Klasse.

Violence to intense market situation in China.

In the face of these headwinds we executed consistently on our strategy and took advantage of our flexible global structures.

We balanced sales across our regions and our brands.

Speaker #1: With the release of the BMW iX3, the market launch of the Neue Klasse has just begun. And this is only the start. Additional all-electric models with the new design and innovations of the Neue Klasse will follow.

We reduced R&D and Capex. Thanks to early investments in an OE classic and we drove further cost reductions across the entire company.

With this we were able to deliver on major kv ice in our operational business.

A stable group EBIT margin of seven 7% the same as 2024 with group earnings of more than 10 billion euros.

Speaker #1: Another notable highlight will be unveiled next week, when we present the BMW i3, the first variant of the next generation of the BMW 3 Series.

Volume growth to 2.46 million group vehicles.

Speaker #1: The new i3 brings our Neue Klasse right into the heart of the BMW brand. Prepare to be amazed by what the technologies of the Neue Klasse can do in a vehicle like the 3 Series.

A continuation of our electrification story with an increase in best sure, so almost 18% and <unk> share to over 26% of total sites.

And electrified share in Europe of over 40% Acos to fleet emissions figure in the European Union of 90 Gram per kilometer.

Speaker #1: I think it is fair to say that they take sheer driving pleasure to a whole new level. And here's the sneak preview of what we will be unveiling next week.

Two nine gram below the relevant targets.

And automotive EBIT margin within our guidance corridor over 3 billion euros free cash flow and solid capital returns.

As I promised at the annual conference one year ago.

We have addressed all aspects of costs, R&D, SG&A manufacturing and material costs.

Secure consistent year over year reduction in every quarter.

This amounted to an overall ultra EBIT tailwind of approximately two and a half billion euros for the year.

With our diligent management of the business, we have been able to offset a large share of the challenges we faced.

Without the full year tariff burden of approximately one five percentage points of EBIT margin, both our group earnings as well as our auto EBIT would have been above the previous year.

Speaker #1: Ladies and gentlemen, I am looking forward to presenting this incredible car to our BMW fans worldwide next week. And after that, we will meet again at Auto China in Beijing to introduce the Chinese version of the iX3 as the next Neue Klasse model.

Let me now take you through our financial figures in detail.

For the full year group revenues totaled 133 billion euros.

Speaker #1: We developed this vehicle exclusively for China, together with our local R&D team in the market, ensuring that the product meets the specific wishes and needs of our Chinese customers.

Earnings before tax at group level amounted to over 10 billion euros as anticipated at Q3.

This represents a single digit percentage decline of six 7%.

The resulting group EBIT margin remained stable at seven 7% for the year.

Speaker #1: The result: the most Chinese car we've ever built. Initial feedback from the local media has been overwhelmingly positive, with praise in particular for its driving characteristics.

And earnings per share, even rose slightly year on year.

If we look at the breakdown of the group performance by segment.

Speaker #1: The China-specific digital features have also been very well received. And then, in 2027, BMW M will usher in a new era in the high-performance segment with the first all-electric M vehicle with racetrack capabilities, based on the Neue Klasse.

The automotive segment delivered $6 3 billion euros in earnings with an EBIT margin of five 3%.

What sort of EBIT reached 178 million euros with a margin of five 7%.

Financial services generated $2 4 billion euros in earnings before tax.

And our return on equity of 14, 3%.

Speaker #1: Alongside development of the Neue Klasse, we've also created the essential conditions for rapid ramp-up with our supplier and production network. Production of the iX3 has successfully begun at our new plant in Debrecen.

All the three operational segments bad therefore, best in their respective guidance corridor.

Other entities improved to just over 1 billion euros in EBIT.

The positive trend after nine months continued into Q4.

Speaker #1: We will start production of the new BMW i3 at our main plant here in Munich in the second half of the year. To do so, we have completely modernized the plant during ongoing operations.

And finally eliminations amounted to an EBIT of 629 million euros. This reflects the positive development in Q4 as anticipated.

Let's look at how the automotive segment performed across key metrics.

Speaker #1: And from late 2027, we will build only electric vehicles in Munich. Production of high-voltage batteries will also begin at our new plant on Illbachstraße, Kirsen, in the second half of the year.

Over the course of 2025, the BMW group sold over 2.46 million BMW mini Entrusts rice vehicles to customers worldwide.

An increase of <unk>, 5% over 2024.

Speaker #1: And this facility will supply our plants in Germany with the sixth-generation high-voltage batteries. Our plant cluster in Shenyang, China, is also ready to build the Neue Klasse in China for China.

Looking at the regions, we see our global model at play as Mr effectively across geographies.

As all of our chipset highlighted before sales in Europe, and the United States outperformed the market.

Over the course of 2025, the BMW Group sold over 2.46 million BMW, MINI, and Rolls-Royce vehicles to customers worldwide.

Speaker #1: And at our largest plant in Spartanburg, in the United States, we are systematically modernizing the production system for the technologies of the Neue Klasse.

Delivering an increased market share and overcompensating the development in China.

An increase of 0.5% over 2024.

We delivered a stable monthly run rates for BMW brand of around 50000 vehicles throughout the entire year in China.

Speaker #1: This also includes the new high-voltage battery assembly facility in nearby Woodruff. And across all plants in our production network, we are creating the necessary conditions to implement the technologies of the Neue Klasse as quickly as possible in all BMW models.

Looking at the regions, we see our global model at play, as we steer effectively across geographies.

Despite the intense market environment.

As Oliver Zipse highlighted before, sales in Europe and the United States outperformed the market.

During the course of the year, we have taken actions to consolidate dealer structures and address pricing.

Delivering an increased market share and overcompensating the development in China.

Which will underpin the stability in the market.

Excluding this Chinese market Novo group sales in 2025 grew by five 9%.

Speaker #1: By 2027 alone, we will bring more than 40 new or updated models to the market. Each of them will benefit from the technologies of the Neue Klasse, always tailored to concept requirements and independent of the drive technology.

We delivered a stable monthly run rate for the BMW brand of around 50,000 vehicles throughout the entire year in China.

Despite the intense Market environment.

Electrified vehicles are both a foundational pillar in our strategy and also a key growth driver. Thanks.

During the course of the year, we have taken actions to consolidate dealer structures and address pricing.

Thanks to our expanding portfolio of attractive products.

Which will underpin the stability in the market.

Speaker #1: The best example of this is the next generation of our BMW X5. This summer, we will officially unveil the successor to our current model. And the X5 will be the first BMW model to be offered with five different drivetrain variants.

Oliver chipset has already taken you through the figures in detail, but the highlights from a total of 642000 electrified vehicles delivered in 2025.

Excluding the Chinese market, global Group sales in 2025 grew by 5.9%.

We represent.

Electrified vehicles are both a foundational pillar in our strategy and also a key growth driver.

Now of over 26%.

Speaker #1: With highly efficient conventional drives, as a plug-in hybrid, battery electric, and from 2028 onwards, also powered by hydrogen. In this way, we are laying the foundation to successfully meet the diverse requirements and customer needs around the world.

Thanks to our expanding portfolio of attractive products.

And deliveries of all electric vehicles of 442000 units for a share of almost 18%.

Oliver Zipse has already taken you through the figures in detail, but the highlights were:

Revenues in the automotive segment came in at nearly 118 billion euros, 5.9% below 2020 for.

A total of 642,000 electrified vehicles delivered in 2025,

We are presenting solid growth of 8.2%.

Our program.

And an overall exchange share of over 26%.

Speaker #1: Both today and in the future. And shortly before that, at the Beijing show, we will be showcasing the first model update to feature technologies from the Neue Klasse, the BMW 7 Series.

Due to negative currency effects.

The reminder, results mainly from global pricing pressure.

And deliveries of all electric vehicles of 442,000 units, for a share of almost 18%.

Let's look at the year on year automotive EBIT result in detail.

<unk> from our previous year's earnings.

Revenues in the automotive segment came in at nearly €111.8 billion.

Speaker #1: The result is an almost completely new vehicle. We're taking full advantage of the new possibilities from Neue Klasse technologies and raising our luxury sedan to a whole new level in terms of both appearance and technology.

The net balance of currency and raw material positions resulted in a headwind of 600 million euros.

5.9% below 2024.

Approximately half of this decrease is due to negative currency effects.

Negative trends in FX outweighed, the slight positive effects from raw materials, particularly in the second half after here.

The remainder results mainly from global pricing pressure.

This adverse FX development is expected to carry into the first half of the current Dia mainly in Q1.

Let's look at the year-on-year automotive result in detail, coming from our previous year's earnings.

Speaker #1: And this brings me to my third point. The technology clusters of the Neue Klasse and their potential. With the technology clusters developed specifically for the Neue Klasse and our modular approach to technology, we can integrate market-specific functionalities and content into our vehicles.

The net balance of currency and raw material positions resulted in a headwind of €600 million.

Compared to 2024, the net effect of volume model make some pricing weighed on automotive EBIT by a total of $1 8 billion euros.

Negative trends in FX outweigh the slight positive effects from raw materials, but particularly in the second half of the year.

The overall mix effect was positive.

Terrific multiply by a strong share them from the mid class, including five serious growth as well as a record and performance.

Speaker #1: At the same time, we are strengthening our R&D capabilities to enable us to respond more quickly and flexibly to local customer needs and provide appropriate solutions.

This adverse effects development is expected to carry into the first half of the current year, mainly in Q1.

For the full year pricing was a significant headwind of 2 billion euros.

Speaker #1: In our key sales regions, we have already implemented numerous features in collaboration with leading local partners. For example, in the Chinese market, we are working with Alibaba Banma to establish the next generation of intuitive in-car voice control.

In line with our planning we continued to decrease operating costs in 2025 as planned we reduced R&D expenses. Following the peak in 2024 with a nearly 800 million euros reduction year on year.

Compared to 2024, the net effect of volume, model mix and pricing weighed on Automotive, its by a total of €1.8 billion.

The overall mix effect was positive.

SG&A savings represented 900 million euros continue.

For the full year, pricing was a significant headwind of €2 billion.

Speaker #1: In China, the BMW Intelligent Personal Assistant is also being expanded to include deep-sea functionality. In most markets, including Europe, we will be integrating Alexa Plus as the centerpiece of our BMW Intelligent Personal Assistant.

Continuing the trend from the first nine months.

Other cost changes amounted to a headwind of 800 million euros. This development resulted from a few areas.

On the one hand tariffs had a negative impact of approximately one five percentage points on the auto EBIT margin.

In line with our planning, we continued to decrease operating costs in 2025, as planned. We reduced R&D expenses following the peak in 2024, with a nearly €800 million reduction year on year.

Speaker #1: Thanks to the advanced large language model technology of Amazon Alexa Plus, our customers now benefit from an even smarter, more connected, and highly personalized voice assistant.

In addition, a softening market on residual values weighed on earnings.

SG&A savings represented €900 million, continuing the trend from the first 9 months.

It remained positive but lower than the previous year.

Other cost changes amounted to a headwind of €800 million. This development resulted from a few areas.

On the other hand warranty expenses were significantly lower year on year as outlined at Q3.

Speaker #1: With our driver assistance systems, we continue delivering the best possible customer experience in each region, tailored to local requirements. And to achieve this, we work closely with selected partners.

Under the one hand, tariffs had a negative impact on profit at one and a half percentage points on the other—a margin.

An additional positive impact came from a high three digit million saving and manufacturing costs and material costs.

In addition, a softening market on the residual values rate on earnings.

The remained positive.

Overall, we have reduced costs by two and a half million euros for the full year through our active steering of R&D, SG&A and manufacturing costs and material costs.

Speaker #1: And our guiding principle remains the same: we always strive for smart, symbiotic, and safe solutions. Last summer, we launched a new cooperation in China with Momenta, a leading local provider of ADAS technology.

But lower than the previous year.

On the other hand, warranty expenses were significantly lower year on year, as outlined at Q3.

For this we were able to offset all headwinds, except a portion of the approximately one and a half percentage point tariff burden.

An additional positive effect came from a high three-digit million saving in manufacturing costs and material costs.

Overall.

Speaker #1: And outside China, we are collaborating with the American company Qualcomm. Both collaborations focus on the co-development and integration of software that adapts to different road conditions, traffic scenarios, and user needs, relying on state-of-the-art AI algorithms and data-driven methods.

<unk> in a net year on year decrease of one percentage point in EBIT.

In total segment earnings in 2025 reached $6 3 billion euros.

We reduced costs by 2 and a half billion euros for the full year through our active steering of R&D sgna, and Manufacturing costs, and material costs.

The automotive EBIT margin came in at five 3%.

Excluding the $1 3 billion euros, depreciation, resulting from the PPA of BMW brilliance automotive.

Through this, we were able to offset all headwinds except a portion of the approximately 1.5 percentage point tariff burden.

Speaker #1: These examples highlight the extraordinary flexibility and scalability of our tech clusters. With the software-defined Neue Klasse, we maintain control over all systems and can deploy them simultaneously worldwide.

Resulting in a net year-on-year decrease of 1 percentage point in it.

EBIT margin reached six 4% for the year.

In total.

And that still includes the happened of approximately one five percentage points from tariffs.

Segment earnings in 2025 reached €6.3 billion.

As you know our focus is consistently on our reported figures.

The automotive EBIT margin came in at 5.3%.

Speaker #1: And we are also able to rapidly integrate local technology stacks, giving our customers access to their preferred innovations and features. Continuous over-the-air updates ensure that our vehicle software is always up to date.

Due to different approaches in the industry, however concentration of PPA and tariff burden ensures better comparability of operational performance.

Excluding the €1.3 billion depreciation resulting from the PPA of BMW Brilliance Automotive, the EBIT margin reached 6.4% for the year.

Looking at R&D and capital expenditure in detail.

And that still includes the headwind of approximately one and a half percentage points from tariffs.

We made early investments to implement our strategy, which we see as we look at R&D and Capex development in 2025.

Speaker #1: All functionalities are improved on an ongoing basis to permanently enhance the customer experience. Ladies and gentlemen, as you can see, the BMW Group remains successful and highly innovative.

As you know, our focus is consistently on our reported figures.

<unk> expenditure for research and development. According to German commercial code for the year amounted to $8 3 billion euros.

Due to different approaches in the industry, however, consideration of PBA and tariff burden ensures better comparability of operational performance.

Looking at R&D and capital expenditure in detail.

This is a decrease of nearly 800 million euros or 8% below the peak of $9 1 billion euros in 2024.

Speaker #1: Our current product range is one of the broadest and most attractive lineups in the premium segment worldwide. With the Neue Klasse and its technologies, we have secured a significant competitive advantage.

We made early investments to implement our strategy, which we see as we look at R&D and capex development in 2025.

This translates to an R&D ratio of six 2%.

Given the lower revenue the ratio only declined slightly year on year.

Speaker #1: And we will leverage these strengths to drive our economic success. However, it is also clear that our world remains unstable, and numerous risks will persist in the current financial year.

Proved expenditure for research and development, according to the German Commercial Code, for the year amounted to €8.3 billion.

Group capital expenditure totaled $7 2 billion euros, a year on year decrease of over 1.8 billion euros from the peak of $9.1 billion in 2024.

This is a decrease of nearly €800 million, or 8% below the peak of €9.1 billion in 2024.

This translates to an R&D ratio of 6.2%.

Or a 20% reduction.

Speaker #1: We meet these challenges with strategic consistency and with market- and opportunity-driven vision. Our global footprint in sales, research and development, and production provides us with the foundation to mitigate uncertainties and respond flexibly to unforeseen events.

This resulted in a ratio of five 4%.

Given the lower revenue, the ratio only declined slightly year-on-year.

Capex ratio, excluding right of use assets came in at four 9%.

As promised R&D and capital expenditure have already significantly decreased from their peak in financial year 2024.

Group capital expenditure totaled €7.2 billion, a year-on-year decrease of over €1.8 billion from the peak of €9.1 billion in 2024.

Or a 20% reduction.

Despite the rollout of models after Neu closer we will maintain this trend going forward.

Speaker #1: And we will continue to build on these strengths in 2026 and, of course, in the years to come. Thank you very much, Damen und Herren, liebe.

This resulted in a ratio of 5.4%.

This means in both absolute and relative terms, we are heading back towards our strategic Argos, which are 4% to 5% for R&D.

The CapEx ratio, excluding right-of-use assets, came in at 4.9%.

As promised, R&D and capital expenditure have already significantly decreased from their peak in financial year 2024.

And less than 5% for Capex by 2027.

Moving to free cash flow.

Despite the rollout of models of the new class series, we will maintain the strength going forward.

Total segment earnings before tax amounted to $5 9 billion euros for the year.

Working capital contributed positively with 900 million euros, mainly due to strict management of inventories.

This means, in both absolute and relative terms, we are heading back towards our strategic corridors, which are 4% to 5% for R&D.

And less than 5% for CapEx by 2027.

The net effect from capital expenditure and depreciation reduce free cash flow by $2 3 billion euros.

Moving to freakish flow.

Changes to provisions had a negative impact of $1 3 billion euros, mainly due to the utilization of warranty provisions.

Total segment earnings before tax amounted to €5.9 billion for the year.

Following the $2 7 billion Euro figure communicators at Q3 free cash flow developed positively in Q4 and reached $3 2 billion euros at year end. This was in line with our expectations of a bus two and a half billion euros for the year.

Working capital contributed positively with €900 million, mainly due to strict management of inventories.

The net effect from capital expenditure and depreciation reduced free cash flow by €2.3 billion.

Changes to provisions had a negative impact of €1.3 billion, mainly due to the utilization of warranty provisions.

Our financial strength is further underscored by our automotive net financial assets at year end. This came in at over 44 billion euros.

Following the €2.7 billion figure communicated at Q3,

Free cash flow developed positively in Q4.

Let's now turn to our financial services segment.

As a key component of our BMW ecosystem the segment consistently contributes to group profitability.

In 2025, new business developed positively throughout the year with nearly $1 seven 3 million, new financing and leasing contracts concluded.

This represents growth of almost 2% year on year.

The increase is due in particular to the positive business development in Europe, as well as the changed competitive environment in China in the second half of the year.

Since the end of June the market situation has been influenced by the significant reduction in commissions from the local Chinese banks in connection with the brokering of financial and insurance products for end customers.

Penetration rates for lease and loan offerings increased by four percentage points to 46, 6%.

Our all new business volume at financial services reached an all time high growing by 2% to $65 8 billion euros, despite negative currency effects.

Segment earnings before tax reached $2 4 billion euros.

The moderate decrease compared to 2024 is due to lower income from the resale of end of lease vehicles as well as tax payments related to changed assessments of operating Texas from previous years.

Residual value remain positive, but lower than the previous year.

The credit loss ratio of open two 8% whilst with in our expectation.

Return on equity for the full year reached 14, 3% and therefore within the guide a target corridor of 13% to 16%.

Speaker #2: Ladies and gentlemen, dear colleagues, welcome to the media Q&A session of the BMW Group Annual Conference. I would now like to introduce to you the members of the Board of Management.

Ladies and gentlemen, and 2025, a BMW group of Chiefs group earnings before tax of 10.24 billion euros.

Two is stable year on year profit attributable to shareholders of BMW achieved amounting to 729 billion euros. The board of management and the supervisory Board will propose to the annual general meeting a total dividend payment of $2 6 billion euros.

Speaker #2: I will start on my right . First . Milena Govich , production . Next we have Ilker Hoffmeyer people and real estate Then to my immediate right , Walter Mertl responsible for finance .

Speaker #2: To my left is our CEO , Oliver Zipse . Directly next to him . Joachim Post , member of the Board of Management for development Next to him is Johan Golla , responsible for customers , brands and sales And last but not least , Nikolai Martin .

The proposed dividend represents a payout ratio of 36, 6%, which is consistent year over here and then the upper half of our strategic target range of 30% to 40%.

This amounts to a dividend of four euros 40 per share of ordinary stock.

Speaker #2: Purchasing and supplier network, we will broadcast your questions live. Of course. Happy to have you turn on your video transmission. We also ask you to use the raise hand feature.

And for euros 42 per share of preferred stock.

Additionally, we completed our second share buyback program in early 2025.

Speaker #2: If you have a question, please note your video will be visible on the wall behind us until your question has been fully answered. This year, we once again have participants joining us from all over the world. We therefore do ask for your understanding.

Before starting the third program after the AGM in May.

The total from both programs amounted to a payout of 1.25 billion euros in 2025.

Our third share buyback program will run until April 2027.

Speaker #2: Should there be any minor technical delays, please note the Q&A session will be held in German. Of course, we will provide simultaneous interpretation into English.

It currently running the second tranche of this program with a volume of 625 million euros for ordinary shares that will be completed by August 31st 2026 at the latest.

Speaker #2: You are therefore welcome to ask your questions in English as well. Our board members will then answer in German, and your questions will be interpreted simultaneously, as well as the answers.

The third tranche is earmarked for after that.

For the financial year 2025, with total shareholder return of close to 4 billion euros, comprising the proposed dividend and share buybacks exceeds free cash flow in the automotive segment.

Speaker #2: Ladies and gentlemen , dear colleagues , let us begin . Now that we have covered the organizational part . Let's start the Q&A .

As further underscores our commitment to capital returns.

Speaker #2: We will move on to the first question. It comes from...

That brings me to our outlook for the current financial year.

Our expectations for 2026.

Speaker #1: Christina

Speaker #2: Christina . Aman From Reuters . We probably will hear or see her in just a second . Hello , Mr. . Aman We unfortunately cannot hear you just yet .

In Europe, and the USA, we see some growth potential.

In China, we have responded to the market environment by taking a number of steps to stabilize transaction prices.

Average sales figures over the past few months indicate that sales in China could reach last year's level. Consequently, we forecast global deliveries of BMW mini and draws rights vehicles to be at previous year's level.

Speaker #2: Maybe you're on mute. We still can't hear you, I'm afraid.

Due to model cycle effects as well as shifting regulatory and market dynamics. We also expect the share of fully electric vehicles to be at the same level as the previous year.

Speaker #1: Hören. Wir sie nicht, Frau. Aman, müssen wir.

Turning to Alto Ava development.

Speaker #2: I'm so sorry, Mr. Aman. We still can't hear you. We might have to circle back to you.

We continue to work diligently on reducing costs, and we'll see tailwind from reduced investments lower manufacturing and material costs declining R&D expenditure as well as reduced SG&A and that 2026 financial year.

Speaker #1: Wir auf den

Speaker #2: Right . So then we'll jump to the next question . That's Frank from Automobilwoche . Mr. . Walk over to you Mr. . Walk .

We anticipate a negative impact of approximately one and a quarter percentage points from tariffs on the ultra EBIT margin.

Compared to the 1.5% in 2025.

Given the significant investments made into nor a cluster in preceding years, we will see a material increase in depreciation and amortization from both capex and capitalized R&D.

Speaker #2: We can see you

While we will continue to make significant reduction in R&D expenditure.

Additionally, depreciation and a lower capitalization ratio, which is expected in the 30% area will.

Speaker #1: Later, verstehen. Wir auch diese Frage nicht.

It will result in a significant P&L burden.

Other headwinds in 2026 includes FX and raw materials.

Speaker #2: So sorry . It seems we also can't hear Mr. Volg . Now I'm looking backstage . Are we sticking with Mr. Volg , or are we moving on ?

<unk> taken in China to stabilize transaction prizes and finally lower income from used car remarketing.

Speaker #2: What do we do? Let's see. Maybe we can get some feedback. It should be working, so it seems that we're figuring it out.

The reductions we will achieve on the cost side will not fully offset these headwinds.

We therefore expect an auto EBIT margin in the corridor of 4% to 6% in 2026.

Speaker #2: Please bear with us . Also happy to entertain you . In the meantime . So , of course , we have the entire board of management here .

Corresponding rosy in the automotive segment is forecast to be between six and 10%.

Speaker #2: We're still at BMW. We are at the BMW Welt here in Munich at the annual BMW conference, and we're missing the times when everybody was here in the room.

In the financial services segment, we again anticipate the return on equity of 13% to 60%.

Putting this all together, we expect group earnings before tax to be moderately lower than the strong result in 2025.

Speaker #2: Because of course , in that way , everybody was able to just speak to us . We had a fantastic tradition . We always had the manager magazine go first .

Speaker #2: Sometimes we had the title from here in Munich , go first . But with that being said , let me once again ask , is there anything that we can do here to expedite the process ?

The full 2026 outlook for all key performance indicators is available and the BMW Group report.

In addition, we expect the free cash flow in the automotive segment at the yearend over four and a half billion euros.

Speaker #2: Maybe read out a question I've now just got feedback that it should work now , so we'll try . Once again , Frank Fog from Automobilwoche once again going to check So again , Mr. Volk , we can see you , which is one step in the right direction Right now we can hear you Fantastic .

Ladies and gentlemen for.

For 2026, we will continue to assist magically implement our strategic course.

Particularly with the launch of my classic product offensive and the rollout of its technologies across the portfolio.

Speaker #2: Your question please All right . Thank you very much . Good morning . Happy to . Now , you are the first one .

Even leverage flexibility in our global business model to tackle the challenging and dynamic operating environment.

At the same time, we will manage our operational business with continued focus on cost discipline.

Speaker #2: Great to have that experiment finally working out . Is now the number one . Yes . I'm very happy . I have three questions .

This will enable us to deliver financial results in line with our guidance and generates strong returns to shareholders.

Speaker #2: Mr. Simpson, the i3, of course, is coming up next week. But maybe you could talk to us a little bit because it is a special vehicle.

Ladies and gentlemen.

Let me pick up on Alibaba chipsets comments regarding sustainability and C. O two emissions before I hand back over to him.

Speaker #2: Maybe you can tell us a bit more about your expectation and the meaning of this particular vehicle . Second question in your speech , you were talking about the EU experiment regarding e-mobility , mandating it , and that this is probably not going to have the benefits that they would expect .

For the BMW group refused sustainability, holistically and as a competitive advantage.

That is why we in our annual reporting this close our sustainability performance fully to our investors and customers.

Speaker #2: It sounds like you're losing faith in the fact that the EU would get the results that would be beneficial for the industry.

In line with our strategy and our commitment to the Paris climate agreement.

The BMW group considers the C O two emissions of vehicles, both for our new and existing fleet over the entire life cycle.

Speaker #2: How critical is that actually ? Or to flip it , what would you expect to ease the tension a bit ? And then to kick things off , I have a little bit of a yellow press question , which you probably wouldn't love , but still , this is now , of course , your last annual conference as CEO .

From raw material extraction and parts production to the manufacture of vehicles and across the use face sort of vehicles end of life.

We address all stages of the value chain with ambitious targets.

Speaker #2: How does it feel, and looking back, are you happy with the results that you're presenting now at your grand finale? Thank you very much, Mr. Falk.

However, European C O two fleet emissions regulations focus only on the youth face.

And do not recognize the full reduction potential along the entire value chain.

Speaker #2: I think this really comprises everything that we wanted to cover today , and there's no better person to answer this , especially , of course , the third question , as our CEO , Oliver Oliver , please All right , Mr. Fogg , thank you very much for these three questions .

When it comes to reporting emissions shown in sustainability statements do not always correlate to the actual generation of emissions of all vehicles on roads.

Speaker #2: I do hope that we have enough time to cover it, because the i3, of course, is the beating heart of BMW.

But in 2025 financial year. The BMW group reporting includes all vehicles sold in the year across their life cycle.

Speaker #2: It's not the first generation . And , you know , just wait . Will , of course , present the i3 next week after the Ix3 , we're going to be presenting it next week in great detail .

Including the C O two emissions from the supply chain for vehicles produced in the reporting year from.

Speaker #2: Of course , it is the beating heart of BMW of the NY cluster . We have , of course , rebuilt the entire Munich main plant for years .

<unk> from BMW group production.

From the assumed use face of 200000 kilometers for vehicles delivered in the reporting year based on the consumption mix of the reporting year.

Speaker #2: Now it's finished. The cars are being produced. We are very happy with the results, and we are just really happy with the double surprise.

And from end of life disposal for vehicles produced in the reporting year.

Speaker #2: Of course , the Ix3 has been in the week for a market . You can order it , you can buy it . It's going extremely well .

However, they use face emissions reported in line versus European frameworks in 2025.

Speaker #2: We have more than 50,000 people who have already ordered the car without ever having set a toe into the car, and now, of course, we're following that up with the i3.

Do not consider all existing BMW proof vehicles still in use.

Speaker #2: So just wait and see what the car can do, what the different capabilities are. And we're absolutely sure that we're going to be at...

But rather only those vehicles sold in the reported year.

This means that the European reporting frameworks neglect the reduction potential of the existing vehicle fleets.

Speaker #2: The absolute peak of the industry. Now, moving on to Brussels, I'm not sure what you mean when you talk about the EU experiment.

Here they are significant leverage to quickly contribute to SER two reductions through use of issues and carbon neutral fuels such as <unk> hundred one hundreds.

Speaker #2: I didn't say that, but I do know what you're talking about. I believe it's about what you do in 2030 and 2035.

Speaker #2: Regarding the CO2 regulations . Now , as you know , CO2 is incredibly important to us . We are currently the only German manufacturer .

Immediate credit should be given starting for example in 2027 for the C. O two reductions achieved using sustainable fuels, which should not be subject to limitations such as caps on specific from per kilometer values.

Speaker #2: Sorry , let me rephrase . The only European manufacturer , which at the moment in 2025 has achieved the goals without pooling , without averaging .

The European regulatory framework should reflect this holistic approach towards reducing overall emissions in the here and now in both our new and existing vehicle fleet.

Speaker #2: We simply hit the goals in that particular year. Instead of 92.4g, we're actually right under 90g, so we even overperformed, so we can prove it.

Speaker #2: We have done it, not just Scope 3. Also Scope 1 and 2, just the same. Each and every single year.

Cost.

Intimately every crumb of tier two saved counts.

Speaker #2: Less CO2 . That's our strategy and it works . Now what is important to us is that when reworking the goals for 2035 , we don't want to go overboard just because all of a sudden in the main buzzword technology , openness , there's now so much fine print added to that , you know , so much overregulation in there that has nothing to do with CO2 .

That is what we at the BMW group belief and what makes a true societal impact.

I'll now hand back over to Oliver chipset to provide additional strategic insights for 2026 and beyond.

Speaker #2: For the first thing is , of course , the European content , which is phrased in a way that global business models , which are important for the European and especially , of course , the German and especially for the BMW industry , is so crucial that that just completely cuts out .

Okay.

Speaker #2: And that is actually an opportunity for Europe , because in this way , no other region in the world has it . So we're really giving the game away in a way By trying to kind of cut ourselves off from the world , that's one thing .

Speaker #2: The other thing is , of course , that we have now created a new class of or they are creating a new class of vehicle , which is great , but the question is , what are they doing it for ?

Speaker #2: Why should you get a CO2 credit ? Just because the vehicle is small ? Instead of just saying the most efficient cars get a CO2 credit and not just the smallest cars , and then via the incentivization sure , we have nothing against incentives .

Yeah.

Speaker #2: I think this is a well intentioned , but wrongly executed project . And then last but not least , only looking at the tailpipe is absolutely not the right thing .

Ladies and gentlemen, looking ahead to this.

Speaker #2: Our approach is, let's look at the entire value chain—from green steel via the supply chain, and so on and so forth.

Year end beyond three key factors will be decisive first for our 2026 targets. The product lineup is currently available, which we have built up gradually over the past three years.

Speaker #2: Really cradle to grave. Let's add that to the calculation, and then it'll be a fully rounded conversation in the current conversation. I don't think it is wide-ranging enough.

Speaker #2: And all in all, we believe this is going to lead to a significantly shrinking industry. And we say it because this is very dangerous.

And second for this year and the years to come the rollout of additional noise class of models and integration of its technologies across the entire product range.

Speaker #2: And like I said , we are showing that it works . We're showing that there's a different way . The CEO question well , after 35 years , looking back , you know , at some point the time has come to step away .

And third.

The tech clusters of the noy classroom, which enabled rapid advances and collaboration with leading tech players worldwide.

Let's start with the first item the company's current product portfolio across our BMW mini Rolls Royce and BMW mature brands offers a range of premium options in all key segments.

Speaker #2: I think it is now the right point in time. And I mean, of course, you can see the entire team that we have set up in the last couple of years, that has had great success in the last few years as well.

Speaker #2: And there's , of course , going to be a huge continuity . Milan Andjelkovic , who is here , of course , as well today is going to be my successor .

From many in the urban compact car segment two roles choice in the ultra luxury class.

Speaker #2: So he is going to be a steady steward. There's not going to be any sort of disruption that you will see or feel.

At the beginning of this year, we added another highly exclusive dimension to our brand portfolio.

Speaker #2: And I think this is , again , very fitting for the BMW way . Personally speaking . It was a huge honor and a huge joy to share .

BMW Alpina.

The long established BMW Alpina brand embodies maximum performance and exceptional driving comfort combined with unique options for Individualisation. This makes it an ideal addition to our existing product range in the segment for individual highly customized.

Speaker #2: This company , to run this company in the last few years . And I'm going very happy , very satisfied . All right .

Speaker #2: Thank you very much. But that doesn't mean that we're going to wrap up the press conference, because, of course, this would have been the perfect way to go.

Speaker #2: But I can say that our CEO is going to stick with us for another while yet. Now, we'll go back to the first.

Vehicles.

In this way we are tapping into a highly profitable segment with great growth potential positioned above the BMW brands top models and below our roadshows luxury brands.

Speaker #2: Participant , Kristina Almond from Reuters . And once again , so sorry for the technical difficulties . We'll give it another try . Good morning .

Speaker #2: I hope it works . Now . Yes , it works brilliantly . Fantastic . Good morning . I have a few questions . First off , I ran what does the Iran war mean to BMW ?

Overall, the BMW group offers one of the industry, most comprehensive and diverse premium portfolios.

Speaker #2: First, of course we're talking about parts, raw materials. Are there any particular raw materials which you received via the Strait of Hormuz that could now run into a bottleneck?

Our core strengths of this lineup is our consistent focus on technology openness.

We committed early to a market driven mix of different drive technologies with this approach. The BMW group continues to chart its own course.

Speaker #2: Then , of course , also sales . The Middle East is , of course , a very strong luxury market . Traditionally speaking .

Speaker #2: So what does that mean for BMW ? Probably particularly Rolls-Royce . The second question China . Mr. . Metal , you mentioned that in the first half of the year , the initiated measures regarding price stabilization actually had a negative impact .

Enabling us to systematically respond to the diverse requirements of markets and customers well into the future.

Because we chose this path early making the necessary investments at the right time, we can now fully realized the market potential of our products.

Speaker #2: Maybe you can explain a bit more what you meant by that . What is the outlook for the full year in China ? Not just regarding sales development , but also regarding the returns and where you actually see the long term outlook for the Chinese market going forward ?

Today, we offer battery electric vehicles in all relevant segments.

And by the end of the year, we will have a total of 20 bps across all brands.

Speaker #2: Of course , the question is also is the luxury market they're going to recover at some point , or is the world they are simply so fundamentally changed to what it was a couple of years ago .

This will further strengthen our competitive position.

Speaker #2: And the third question is EU regulation. Mr. Zipse, you've made it very clear that you do not go with a pure tailpipe observation and that emissions are also supposed to be balanced by way of fuels and green steel, with green steel.

And at the same time black and hybrids also remain important.

And this is not just a bridging technology for.

For many people in all regions of the world. They are the only way to integrate electric locally emission free mobility into their everyday lives.

Speaker #2: We recently heard more and more projects being cancelled and stopped . Is there even an opportunity ? Are there actually enough of those raw materials and with E-fuels , do to the customers , do the drivers actually accept this fuel which technologically speaking wouldn't be an issue ?

Together with our a range of highly efficient combustion engine. This approach provides maximum flexibility ensuring that regional market opportunities can be consistently exploited.

Speaker #2: But is it supported ? And then local content ? That's of course , the next big topic with batteries . What do you think your opportunities are there to have major advantages and advances .

And this strong lineup at least the core foundation for the companies within our success in 2026.

Beyond.

At the same time.

Speaker #2: Right . Thank you very much , Miss Aman . I'm going to divvy these questions out . Nikolai Martin is going to talk about supply chains .

And that brings me to my second point, we are systematically building on our current advantage with the Nowy culture.

Speaker #2: Rolls Royce , and then Walter Mertl , and then we'll do the rest . So we'll start . Nikolai , we'll start with you right .

With the release of the BMW I X three the market launch of the newer class a has just begun.

Speaker #2: We are , of course , observing the situation in and around Iran very closely . At the moment , there are no supply bottlenecks because of the current situation .

And this is only the start.

Additional all electric models with the new design and the innovations of the Noah Clauser will follow.

Speaker #2: There's also only one direct supply relationship to Dubai for aluminum, but we are absolutely hedged in the long run. And we also have additional supply sources.

Another notable highlight will be unveiled next week when we present the BMW I three the first very end of the next generation of the BMW three series.

Speaker #2: So there are no impairments of production in this way . Thank you very much , Johan . Onto Rolls Royce and sales development .

Speaker #2: Middle East . Good morning Aman . First off , Middle East on the BMW side is important . But in the global context And looking at the percentage .

The new <unk> three brings our annoy closer right into the heart of the BMW brand.

Prepare to be amazed by what the technologies of the NOAA cluster can do in a vehicle like the three series.

Speaker #2: It is relatively low. And now, of course, we have only been in this particular conflict for 11 days. So we just have to wait and see.

I think it is fair to say that they take share driving pleasure to a whole new level.

Speaker #2: Also for Rolls Royce we are globally well positioned . Middle East is in fact an important market , but yeah , we just have to wait and see .

And here's a sneak preview of what we will be unveiling next week.

Jimmy.

Speaker #2: And observe what's going to happen in the next few months. We do assume that the situation is going to calm down, that if the situation calms down, the customers would be returning back to us.

[music].

Speaker #2: So this is at a very , very early stage . We can't say too much yet , but due to the fact that it Rolls Royce , just like with BMW , we have four regions .

Speaker #2: You know , America is going really well . Europe is an important market . We also assume that , globally speaking , we're still well positioned .

Speaker #2: Excellent . And with that being said , I would like to hand over to Walter Mertl , our CFO , regarding price stabilization in China .

Speaker #2: And should we have any other open questions , then , Johan , back to you . Good morning , Miss Aman . In the second half of the year , we started initiating product measures in China in parallel to stabilizing our dealership network and restructuring it as well .

Ladies and gentlemen, I am looking for.

Speaker #2: By way of these additional measures , of course , there's a slight negative impact . However , what we do find and what we do want to stress here is that the transaction prices in the market for our products have stabilized .

Two presenting this incredible car to our BMW fans worldwide next week and after that we will meet again at our <unk>, China in Beijing to introduce the Chinese version of the <unk> as the next Noah cluster model.

Speaker #2: Are stabilizing, and are actually improving slightly compared to Q3. We also see that the product offering is received well. The dealerships are going better and more smoothly.

We develop this vehicle exclusively for China, together with our local R&D team in the market ensuring that the product meets the specific wishes and needs of our Chinese customers.

Speaker #2: How do we see it? Well, it's because we're of course looking at the budget, and the run rate and sales in the first two months are exactly how we envisioned.

Speaker #2: And that's why, of course, you also asked about the overall outlook for China. If the run rate continues this way...

The result, the most Chinese car we've ever built.

Speaker #2: We have the opportunity to go back to the prior year level in China. Thank you very much, Walter. Johan, maybe back to you.

Initial feedback from the local media has been overwhelmingly positive with sprays in particular for its scribing characteristics.

Speaker #2: Maybe just a short outlook regarding the Chinese market . Sure . So , Mr. Metal , just said it . We see a stabilization regarding the BMW business since Q4 .

The China specific digital features have all been very well received.

And then in 2027.

Speaker #2: In fact . And we've actually started the new year quite solidly . Also , this large product initiative that we've kicked off around the globe , where of course also doing in China , we have a huge kickoff in April at the motor show .

<unk> M will usher in a new era in the high performance segment with the first all electric M vehicle with rates track capabilities based on the noise cluster.

Speaker #2: We're going to be showing three new models , world premieres . We're also going to be there with the Board of Management . And so we do see a very solid volume development , pricing structures , lots of decisions that we've made at the product space , product portfolio are showing effect , and we're going to be having new models coming into the market in second half of the year .

Alongside development of the NOAA cluster. We've also created the essential conditions for a rapid ramp up with our supplier and production network.

Production of the IAG three are successfully begun at our new plant in <unk>.

We will start production of the new BMW I three at our main plant here Munich in the second half of the year.

Speaker #2: So as of right now , as Mr. Metal said , we assume that there is going to be a , you know , a solid trajectory and we're aiming for prior year levels .

To do so we have completely modernized the plan during ongoing operations and from late 2027, we will built only electric vehicles in Munich.

Speaker #2: Thank you very much. And then the third question was regarding the EU regulations. Are we speaking about green steel and e-fuels as a big opportunity? Over to our CEO.

Speaker #2: Well, every single gram of CO2 that we can reduce today is just as valuable, or even more valuable, than one that we can reduce in 2035.

Production of high voltage batteries will also begin at our new plant in El box task Houston in the second half of the year.

Speaker #2: And I think we should all take a step back and look at the major CO2 emissions and where they come from. It's the fleet. We have, of course, been preparing.

And this facility will supply our plants in Germany with the sixth generation high voltage batteries.

Our planned cluster and Shin young in China is also ready to build the NOAA cluster in China for China.

Speaker #2: We've been prepared to use regenerative fuels . And I think the best example is what happens . Diesel , HVO 100 . There are more than 700 gas stations in Europe that .

And at our largest plant in Spartanburg in the United States. We are systematically modernizing the production system for the technologies of the Noy Chaucer. This also includes the new high voltage battery Assembly facility in nearby Woodruff.

Speaker #2: Sorry , 7000 , not 707,000 gas stations that can do this . So this is really quite widely covered across the board . And I think if you just get this particular fuel , you can reduce the CO2 emission footprint by 90% already .

And across all plants in our production network, we are creating the necessary conditions to implement than technologies of the noy closer as quickly as possible in all BMW models.

Speaker #2: So it's already here . It's not something , you know , intangible in the future . I think that's important . And we don't know why that can't be fed into the regulation .

Speaker #2: Now, we believe it is important to reduce CO2 across the board. And this, of course, includes electromobility at a large scale.

Between now and 2027 alone we will bring more than 40, new or updated models to the market each of them will benefit from the technologies of the noy cluster always tailored to concept requirements and independent of the drive technology.

Speaker #2: We've proven this with the new cluster, but we believe this isn't enough. However, we believe this technology is still going to be a huge step.

Speaker #2: So we want, again, to try to make the case for a wide-ranging approach, which is more important than the current regulation or even a reworked regulation.

The Best example of this is the next generation of our BMW X five.

Speaker #2: Local content ? Well , we say that the European industry is , of course , an expert industry . And if we take local content seriously , this export share of the European industry needs to be taken into account , which at the moment is not the case .

This summer we will officially unveil the successor to our current model and the X five will be the first BMW module to be offered with five different drivetrain variants with.

Speaker #2: Thank you very much, Miss Aman, for the question. I would now like to call upon the next person.

With highly efficient conventional drives as the black and our hybrid battery electric and from 2028 onwards also powered by hydrogen.

Speaker #1: So this is Christoph .

Speaker #3: That's Christoph from DBA , and we can see you . Good morning , Mr. Y.mehr . Please ask your question Thank you . Now , I'd be particularly interested about the staff numbers if I read this correctly .

In this way we are laying the foundation to successfully meet the diverse requirements and customer needs around the world.

Speaker #3: There was a slight decline last year, and that's expected to continue this year. Is there a reason for that? And is this something that's happening in Germany, or more something abroad? And maybe a somewhat blunt question.

Both today and in the future.

And shortly before that at the pacing show, we will be showcasing the first model updates to feature technologies from the Norway cluster the BMW seven series.

Speaker #3: Is there a headcount reduction plan ? There's no plans for that at the moment . Is that correct ? Thank you . Igor Hoffmeyer Thank you for that important question .

The result is an almost completely new vehicle where.

We're taking full advantage of the new possibilities from nowhere classes technologies, and raising our luxury say them to a whole new level in terms of both appearance and technology.

Speaker #3: It's not only important for you, but of course, also for our employees. Now, let me try and explain it now.

Speaker #3: HR planning is a core of our HR work , and we're always looking at our staff structures . Also for the future and make adjustments .

And this brings me to my third point.

Technology clusters of the noise closer and their potential.

With the technology cluster developed specifically for the Norway closer and our modular approach to technology, we can integrate market specific functionalities and content into our vehicles.

Speaker #3: We have now prepared the class, and we invested in structures and technology, but last but not least, in skills in our employees.

Speaker #3: And in recent years, we've had the biggest training initiatives for software digitalization. And of course, AI, with around €1 billion investment in recent years.

At the same time, we are strengthening our R&D capabilities to enable us to respond more quickly and flexibly to local customer needs and provide appropriate solutions.

Speaker #3: That's incredibly important—to do precisely what we're doing now with the newer class, be it the iC3 or the 3 Series. That's soon to be launched.

And our key sales regions, we have already implemented numerous features in collaboration with leading local partners for.

Speaker #3: So that's very important . No , of course , we have to take account of the external market , but with this big technological advance , we've also made advances in optimization of our processes .

For example in the Chinese market, we are working with Alibaba Bama to instead, plus the next generation of intuitive in car voice control.

Speaker #3: And we can see this at the moment . We saw this last year . And this will continue this year . We've seen that our optimization , automation and digitalization and AI initiatives are bearing fruit .

In China, the BMW intelligent personal assistant it's also being expanded to include deep sea functionality.

Speaker #3: And, of course, that has an effect on staff requirements. That was the case last year, and will be the case this year.

In most markets, including Europe, we will be integrating elixir plus as the centerpiece of our BMW intelligent personal assistance. Thanks to the advanced large language module technology of Amazon Alexa plus our customers now benefit from an EBIT smarter more connected.

Speaker #3: And it's important for me to emphasize we are using our existing HR tools and using the modules that we've been using in the company for years, and we take account of natural fluctuations as well.

Speaker #3: Very important. Perhaps one last remark: Employment is secured at BMW, and we will continue to offer apprenticeship and training positions. That's important for our future and for young talent.

<unk> and highly personalized voice assistance with.

With our driver assistance systems, we continue delivering the best possible customer experience in each region tailored to local requirements.

Speaker #3: That's incredibly important . There . So that's referring to the last question . No thank you . That was the question from Christoph from GPA .

And to achieve this we work closely with selected partners.

And our guiding principle remains the same we always strive for smart symbiotic and safe solutions.

Speaker #3: The next question is from Sebastian S. from the Financial Times. Hi, Sebastian.

Speaker #2: In the .

Last summer, we launched a new cooperation in China with momentum.

Speaker #3: Yes . Good morning everyone . I've got three questions . Now . You are forecasting a downturn for this year because of the effects of tariffs in comparison to last year .

A leading local provider of Adas technology.

And outside of China, we are collaborating with the American company Qualcomm.

Both collaborations focus on the co development and integration of software that the depths of different road conditions traffic scenarios and user needs.

Speaker #3: What's the reason for that? Because some car makers are saying that there will be greater effects there. So, can you explain why you don't think it's going to have such a great effect?

Lying on state of the art AI algorithms and data driven methods.

Speaker #3: The second question, you have a large range of drivetrains, including hydrogen drivetrains. So, will there be range extenders as an option in the near future as well?

These examples highlight the extraordinary flexibility and scalability of our tech clusters.

Yes.

With a software defined Neu cluster, we maintain control over all systems and can deploy them simultaneously worldwide.

Speaker #3: And on the question of e-mobility, you expect a market share for this year that will be more or less the same as it was in 2025.

And we are also able to rapidly integrate local technology stacks, giving our customers access to their preferred innovations and features.

Speaker #3: Can you perhaps outline why there won't be any fluctuations there this year? And can you perhaps also outline whether there will be any regional changes there?

Continues over the air updates ensure that our vehicle software is always up to date.

All functionalities are improved on an ongoing basis to permanently enhance the customer experience.

Speaker #3: So what's the score in Europe in comparison to the USA , for instance , or in comparison to China ? Thank you . We'll begin with Walter Mertl .

Yeah.

Speaker #3: Regarding the forecast and then regarding the drive mix and range extender, we'll have our development member, and then yes. So thank you, Mr. Ash.

Yeah.

Ladies and gentlemen, as you can see the BMW group remains successful and highly innovative.

Our current product range is one of the broadest and most attractive lineups in the premium segment worldwide.

Speaker #3: In our forecast, we posted what we can expect from the tariffs, and we assume that in the first half of the year we won't see any changes.

With an OE classic and its technologies, we have secured a significant competitive advantage and we will leverage these strengths to drive our economic success. However, it is also clear that our world remains unstable and numerous risks will persist in the current <unk>.

Speaker #3: That is to say, around the 1.75% that we saw in the third quarter in our P&L, we expect that to remain.

Speaker #3: But in the second half of the year , we assume that there will be new agreements . On the one hand , an agreement between the USA and Europe and that Europe will finally sign that that we will then have 0% and be that there will be positive agreements made between the USA and Mexico and Canada and further nations as well .

<unk> year.

We meet these challenges with strategic consistency and with market and opportunity driven vision.

Our global footprint and sales research and development and production provides us with a foundation to mitigate uncertainties and respond flexibly to unforeseen events.

Speaker #3: And given that we assume that the full year effect that was at 1.5% last year, in 2025, we assumed that in 2026 we will be at 1.25%.

And we will continue to build on these strengths in 2026 and of course in the years to come.

Speaker #3: Thank you. Whitemetal. Now we'll talk about the drive mix. I'd like to pass this over to our Board member for Development.

<unk> you very much.

[music].

Speaker #3: Thank you, Mr. Ash, for your question. You know that technology openness is one of the main pillars of our strategy.

Speaker #3: And that's why we fundamentally offer all drives from combustion to plug in hybrid to all electric . Now , the X5 will be provided with the fuel cell .

Speaker #3: As of 2028 . For the first time . Why ? Well , because we are convinced that that will be a further alternative .

Yeah.

Speaker #3: That will be needed for climate mitigation , climate change mitigation . We think that fuel cell technology can make a contribution there with the new cluster , we have our sixth iteration of the battery cells , and we have made a huge contribution here to range .

Yes.

Speaker #3: So we don't think that there is any cause for concern about range there. If we have a range of beyond 800 km and 400 kW charge power, we're of course keeping an eye on all of the options out there and seeing whether range extenders are something that we need to integrate into our portfolio.

[music].

Speaker #3: But at the moment , particularly with what we have with the newer class , we think we're in a very good position . Without that .

Yeah.

Speaker #3: Thank you . The last question was regarding to e-mobility and market shares this year , Yongle . Thank you . Now growth is always looking at the baseline as well .

Yeah.

Yeah.

Speaker #3: And in 2025, we had a very high baseline. And now you know that we had around 18% market share and 25% electrified.

Yeah.

[music].

Speaker #3: And this year, if we look at Europe, we're above 40% electrified vehicles when we're looking at the share of volume.

Speaker #3: So that baseline is very high . We want to achieve growth with the latter . And you're correct in saying that there will be a regional differences because of course , the latter will first be launched in Europe .

Speaker #3: And in the second half of the year in the USA, and towards the end of the year in China as well. Thus, this year we are aiming at strong growth in volumes in Europe.

Speaker #3: And then in the following years , as the newer class is rolled out , we seek to grow more there . Thank you I would now like to also read a written question , and this is a question to Milan Nedeljkovic production .

Yes.

[music].

Yeah.

Okay.

Speaker #3: What's the status with the rollout of the newsletter and X5 and 7 this year in America? Can customers expect punctual deliveries?

[music].

Yes.

Okay.

Speaker #3: Thank you for the question. In recent years, we have prepared our global production systems for the launch of the Noahcarter, but also for all models that will follow and the.

[music].

Speaker #3: In our new plant, we started production and we are starting to scale production there as well, so that we will be able to provide the X3 in accordance with market demand. At the same time, the Spartanburg plant is preparing for the new models and all of the preparations are on time.

Speaker #3: We will be able to ramp up production there on time as well, and deliver on time. And thanks to the good demand for our vehicles, the plants have a lot of orders.

Domino's Chan ebay colleague in England correlation, ladies and gentlemen, Dear colleagues. So welcome to the media Q&A session at the BMW Group Annual conference.

I would now like to introduce to you. The members of the board of management that will start on my right.

Speaker #3: Thank you, Milan Nedeljkovic. The next question is from Stefan Radomski from the Süddeutsche Zeitung.

Melendy Djokovic production.

Next time, we have ill call horsepower.

Speaker #4: Yes

People and real estate agents need then to my immediate right Latam that'll responsible for finance.

Speaker #3: Thank you . Good morning to everyone . Two questions regarding the end customer . On the one hand Mr. . You were talking about pricing pressure , which you'd already felt last year .

To my left is our CEO Oliver <unk>.

And even directly next to them, you're asking impart member of the board of management for development.

Next to him is Johann Golar responsible for customers of brands and sales.

Speaker #3: Perhaps you can be a little bit more specific about that, as to whether that is the same across the world, and whether it's the same across all of the different drive trains, or what is particularly subject to pressure.

And last but not least nikolaj margin and purchasing and supplier network.

You said it either.

We will broadcast your questions alive of course happy to have you turn on your video transmission. We also ask you to use the arrays hand feature if you have a question. Please note your video will be visible on the wall behind US until your question has been fully answered.

Speaker #3: There. Secondly, you expect decreasing residual values for used cars. Here again, the question is, will that be the same across the entire portfolio?

Speaker #3: And for all drive trains ? And to what extent ? And then based on that question , what does that mean for leasing rates ?

Yeah.

This year, we once again have participants joining us from all over the world.

Speaker #3: What do you expect in that regard? Because the electric market is pretty much driven by leasing, at least for private customers.

We therefore do ask for your understanding should there be any minor technical delays.

Okay.

Please note the Q&A session will be held in Germany of course, we will provide simultaneous interpretation into English.

Speaker #3: So, a decline in residual values would then generally mean that there would be increasing leasing rates. So, will it be cheaper to buy an electric vehicle?

You are therefore welcome to ask you a question in English as well.

Our board members well then answer in German and your questions will be interpreted simultaneously as well as the answer.

Speaker #3: And would it be more expensive to lease a clatter ? Ultimately , pricing pressure is not the same everywhere in the world . Of course , there are regional differences and in our forecast , we particularly looked at China .

Ladies and gentlemen, dear.

Colleagues, let us again now that we've covered the organizational chart, let's start the Q&A.

Move on to the first question it comes from.

Speaker #3: You know that in the last two years there have been some quite intense differences in prices. There, since the third quarter, we've been able to address the price stability, particularly with the product measures that we've taken regarding residual values for used cars declining.

Christina Amman, Kristina I'm on.

Voice from our REIT tests right.

We probably will hear or see her in just a second Hello, My time onwards.

Okay.

Yes.

We unfortunately cannot hear you just yet.

Speaker #3: Well , we need to relativize what a decline means there . I would say that they're less positive positive than they were in 2025 where they were positive , positive .

Thank you Michael.

Maybe you're on mute.

Speaker #3: And in 2023, they were more positive than in 2024. So, we see that the extra profits are going back, going down gradually.

Two questions in mind.

We still can't hear you I'm afraid.

Speaker #3: And this was all due to availability, and we're seeing a downturn there. You can see this in all of the different indexes in the USA, but they're still positive.

As a lighter who unworthy niche for Amazon's missing via screen I'm, So sorry, I Miss them and we still can't hear you we might have to circle back to you.

Speaker #3: But not as positive as in the previous year . Whether that's the same everywhere . Well , we do indeed see to an extent , a trend for all electric vehicles and for combustion vehicles that they are relatively stable .

Okay.

For life excellent brand makes them via after Nixon right. So then we'll jump to the next question that Frank of Salt from our automobile volume Mr. <unk> over to you.

Speaker #3: But there are regional differences here as well . It's not the same across the world . A different situation in Europe than in USA leasing rates , of course , are not only consisted , don't only consist of production costs , but it's also a question of competitivity competitiveness .

Yeah.

So therefore it was aimed at your mine.

First of all we can see you.

Speaker #3: And if you have very convincing products which are in high demand , then of course that will have an effect on leasing rates .

Speaker #3: And that doesn't have anything to do with residual values . Thank you . Mr. Gadomski from the Süddeutsche Zeitung and we hope that I'm happy to hear some optimistic opinions from our CFO .

Asia plus gigawatts.

Neither 15 Bureau.

Speaker #3: The next question is from Steven Wilmot, Wall Street Journal. Hi, Steven.

Jesus Ruggedness.

Speaker #1: Steven .

Speaker #3: Steven .

Smith, so sorry. It seems we also can't hear Mr. Vote, now I'm looking back stage or are we sticking with Mr. Volk or are we moving onto what do we do.

Speaker #5: Hi there . Thank you for the opportunity . First question would be great to have a bit of an update on margin . On the question of margin parity between EVs and conventional drivetrains And secondly , which is a bit related , I guess .

Boy skewed.

Right.

Let's see maybe we can get some feedback and it should be working.

Speaker #5: Do you which is your margin outlook ? Do you expect to get back to , I guess , what we would have once considered normal levels of maybe 8 to 10% any time , you know , within the medium term or can you give us any idea of longer term margin outlook , given that you've got this 4 to 6% guidance for 2026 ?

Yes.

So Doug it's Alan so it seems that we're figuring it out please bear with US also happy to entertain you in the meantime, so of course, we have the entire board of management here, where it's still at BMW. We are at the BMW event here in Munich at the annual BMW.

Conference.

And we're missing the times when everybody was here in the room because of course in that way everybody. It was able to just speak to US we had a fantastic tradition, we always.

Speaker #5: You know , in the context of , I guess , of rising EV share and this question of margin parity , and then just thirdly , it would be great to hear your thoughts .

It had the manager magazine go first sometimes we had to restart your title from here in Munich, Oh, first but with that being said, let me once again ask.

Speaker #5: Finally on the on on advanced Adas and it was recently reported that you've deprioritized or the so-called level three program in . And obviously you've got this partnerships with momenta and Qualcomm , which are more focused on Kind of point to point urban mobility .

Is there anything that we can do here to expedite the process maybe read out a question.

<unk>.

So it's again I've now just got feedback that it should work now so we'll try once again frankford from automobile.

We are once again going to check.

Therefore, it attributes ANZ short so again, Mr. Hock, we can see you, which is one step in the right direction.

Yeah right now we can hear you.

Speaker #5: It would be great to, to understand where you're at with that and the timetable for rolling that out in a more comprehensive way.

Fantastic Your question please.

Alright, Thank you very much good morning.

Speaker #5: Thank you .

Happy to now you are the first one great to have it that's experiment finally working aggregate of what is now the number one yes.

Speaker #1: Steven. Ich kann noch mal zusammenfassen.

Speaker #3: Thank you , Steven . I will just try and summarize . It was the margin parity between electric vehicles and combustion . Then long term margin outlook .

Yes, I'm very happy I have.

Three questions.

Mr tips them.

It makes people.

Speaker #3: Walter Mertl will deal with those questions. Then we came to some technical questions. Our Head of Development will talk about that, particularly level three.

<unk> three of course is coming up next week, but maybe you could talk to us a little bit.

Because it is a special vehicle, maybe you can tell us a bit more.

Speaker #3: The IDs system . We'll begin with Valter . Hello , Mr. Wilmot . Now , regarding margin parity , last time at the IAA , we were able to talk about that and is still applies regionally .

More about your expectation.

And the meaning of this particular vehicle second question in your speech you were talking about the EU experiment regarding E mobility.

Mandating it.

Speaker #3: We do see differences. If you work in lots of different countries which are set to tariffs, then margin parity will not be something necessarily that we can say.

And that is this is probably not going to.

Have the benefits that they would expect it sounds like you're losing faith.

Speaker #3: It's optimistic for the future . But in Europe it's pretty good margin parity , particularly with the newer classes , is possible . That's why over recent years , our engineers have been very happy to work together with our CFO , and we've all worked together to achieve this margin parity .

And the fact that the E U.

Okay.

We'll get the results that.

That will be beneficial for the industry, how critical is that actually or to flip it what would you expect to.

He is the tension of it.

And then.

Speaker #3: And then this return to the 8 to 10% . Now that is our strategic goal for cars . But , you know that there are lots of influences that are making it perhaps a more difficult to achieve that , be it tariffs , which have an over proportional effect or exchange rates , which aren't necessarily great at the moment , either .

Yeah.

To kick things off I have.

A little bit of a yellow press question.

Which you probably wouldn't love Whetstone.

This is now of course your last annual conference as CEO, how does it feel and looking back.

Are you happy with the results that you're presenting now at your Grand finale. Thank you very much Mr. Fog I think that's really comprises everything that we wanted to cover today and there's no better person to answer this especially of course, the third question as I C. E O Olivet types of Oliver Please.

Speaker #3: Our clear goal , our clear plan is , however obvious we're working on all of these elements . You can see from the year 2025 that we were paying particular attention to fixed overheads , but also investment , and that will continue to play a role .

Best of luck. Thank you very much for these three questions I do hope that we have enough time to cover it because the I three of course is the beating heart of BMW.

Speaker #3: And in 2026, we will pursue that so that on the performance and production costs and overhead side, we will be on the ball. And when this all comes together in the medium term, that will have an effect on achieving the 8 to 10%.

The first generation.

And you know.

Just to await will of course present, the Ivory next week after the I X three we're going to be presenting at next week in great detail of course is the beating heart of BMW the noy of classes.

We have of course.

<unk> rebuilt the entire Munich main plant for years now. It's finished the cars are being produced were very happy with the resolve than we are.

Speaker #3: Thank you, Valter. That brings us now to the third part of the question. That was the question about the Ada system and the partnerships with Momenta and Qualcomm.

Just really happy with the double surprise they of course the IX three has been in the week for a market and you can order. It you can buy it and it's going extremely well we have more than 50000 people, who have already ordered the car without ever having.

Speaker #3: I would like to ask Johan to deal with this question . Yes , the newer class . Mr. Wilmot , we will really be able to launch the next level of the ads systems .

Speaker #3: We call it smart, symbiotic, and safe. This is a unique driver experience. It intuitively involves the driver in the whole system.

A toe into the car.

Now of course, we're following that up with tier three sub just wait and see what the car can do.

What the different capabilities are and we're absolutely sure that we're gonna be it the absolute best in CML.

Speaker #3: We have the hands-off system on motorways up to 130 km/h. That's now been enabled in accordance with the provisions. And we are now, as you correctly said, focusing on Level Two and Level Two Plus Plus systems in Europe and the USA.

Mohit.

The industry now moving onto Brussels, I'm not sure. What you mean, when you talk about EU experiment I didn't say that but I do know what you're talking about I believe at about what you do in 2030 in 2035 regarding the Doj regulations.

Speaker #3: With the Qualcomm partner and in China , our partnership is with momenta and with the launch of the new cluster , we want to have an end to end function .

Now as you know them.

C O two is incredibly important to us we are currently the only German manufacturer.

Sorry, let me rephrase, the only European manufacturer, which at the moment in 2025.

Speaker #3: So that's the Level Two Plus Plus system that we want to integrate there. They're very attractive systems for customers. They're in high demand with customers.

Has achieved the goals without pooling without averaging we simply hit the goals.

Speaker #3: Why ? Well , because the sensors that they have on board with all of the safety systems and all of the regulations in the vehicle , we've been able to fulfill all of the provisions we had , the level three systems in the vehicles , but we realized that the demand for this was not currently to a stage where we could be profitable .

In that particular year instead of 92 four grams were actually.

Under 90 grams, so we even over performed.

So we can.

Prove it we have done it not a scope three also scope one and two just the fame each and every single year less C. O. Two that's our strategy and it works.

Now what is important to us is that.

Speaker #3: And we have to be profitable, profitable in our business. Of course. So that's why we no longer have a level three offer.

<unk> been reworking the goals for 2035, we don't want to go overboard.

Speaker #3: But that doesn't mean that we are going to continually disregard higher levels. And as soon as we have business models that are feasible, we will pursue them.

Just because <unk>.

All of a sudden in the main buzzword technology openness Theres now so much fine print added to that.

Speaker #3: Thank you . The next question is from Martin Hess from Spiegel magazine . Mr. Hess , please Good morning everyone . Thank you for the opportunity to ask these questions .

So much overregulation in there that it has nothing to do with it.

C O two for the first thing is of course, the European content, which is phrased in a way that global business models, which are important for the European and especially of course, the German and especially for the BMW industry is so crucial that that just completely cut out and that is actually an opportunity for Europe because.

Speaker #3: A specific question about China. And last year, you had a sales downturn that you posted. Perhaps you can split this according to BEV and other drive trains.

In this way no other region in the World has that so we're really.

Speaker #3: So, perhaps to be more specific, did you see a downturn in BEV sales then? I understood that you weren't necessarily expecting a huge sales effect from the newsletter, but rather that you expect that to kick in in coming years.

Giving the game away and away from the mill.

Besides by trying to kind of cut ourselves off from the world. That's one thing. The other thing is of course that we have now created a new class of are they are creating a new class of vehicles, which is great. But the question is what are they doing it for why should you get a tier two credits just because of the vehicle is small instead of just saying the most.

Speaker #3: Perhaps you can provide us with more more of an outlook for the coming years . Perhaps . Also , Mr. Nedeljkovic , as the designated new CEO .

Efficient cars get ACO to credit and not just the smallest cars and then via the incentivize Asian.

Speaker #3: So what are you expecting for 2027 and 2028, perhaps also for the USA and China? Do you think that there will be a ramp-up of BEV there as well, which will help? And then perhaps a question on a slightly different tack—we see that Chinese manufacturers are, it's expected that Chinese manufacturers are going to engage in a further offensive in Europe.

Sure we have nothing against incentives.

I think.

This is a well intentioned, but wrongly executed obtained.

Project, and then laugh at least only looking at the tail pipe is absolutely not the right thing our approach is let's look at the entire value chain.

From Green steel via the supply chain and so on and so forth really cradle to grave, let's add that to the calculation and then it'll be.

Speaker #3: What do you think they will achieve? Do you think they'll be able to secure new market share, and where? From who?

Colorado conversation in the current conversation I don't think it is wide ranging enough and all in all.

Speaker #3: From do you think you'll be able to defend your market shares here in Europe and elsewhere ? Thank you . Martin Hess . These questions will all go straight to our head of sales because he is responsible for that one , two , three .

We believe that's going to lead.

Significantly shrinking industry, and we say it because this is a very dangerous and like I said, we are showing that it works. We show you that there's a different way than the CEO question well.

Speaker #3: Good morning Mr. China . Bev . Sales indeed . Our Bev sales did decline a little bit last year , but we were aware of that .

After 35 years looking back.

And you know at some point the time has come to step away I think it is now the right point in time and I mean of course, you can see the entire team that we have set up in the last couple of years of.

Speaker #3: We were speaking about pricing pressure , particularly in electrified vehicles . We're not we didn't follow all of the pricing measures there . And then we did hold back in some segments .

That has had great success in the last few years as well and there is of course going to be.

Huge continuity Milano Zelkova choice here of course.

Well today is going to be my successor. So he is going to be a steady Stuart there's not going to be any sort of disruption that you will see our feel and I think this is again.

Speaker #3: But with the new cluster, which will be launched in China at the end of the year, and we're sure that that will be very well received there.

Speaker #3: And we think that that will lead to growth. That's something that we will particularly see, however, in the books next year.

Very fitting for the BMW way.

Generally speaking it was a huge honor and huge joy.

Speaker #3: I won't any specific figures for our outlook . Now , of course , but we are aiming to grow . We have invested many billions of euros in lots of new products and new models , which are either completely new or that have been significantly upgraded .

Two topics.

The chair of this company to run this company in the last few years and I'm going very happy very satisfied.

Right. Thank you very much but that doesn't mean that we're going to wrap up the press conference because of course this would've been the perfect way to go but I can say that our C. O is going to stick with us for another while yet now we'll go back to the first.

Speaker #3: That's why we seek to grow in all regions , and that's the advantage that we have . We are global and we want to grow in Europe .

Participant Christina amount from writers and once again, so sorry for the technical difficulties.

Speaker #3: We want to grow in China. We see significant potential in the USA, where we have a good position, and also in what we call rest of world.

Give it another try.

Good morning, I hope it works now, yes, it works brilliantly with fantastic.

Speaker #3: So those are the markets that are not covered by the other markets. But I'm not going to tell you any specific figures on the question of.

Good morning, I have a few questions first off Iran.

What does a V Iran War, the mean to BMW first of course, we're talking about parts raw materials.

Speaker #3: Chinese manufacturers. Let me turn this around. A few years ago, the Japanese came to Europe, but BMW continued to grow.

Are there any particular raw materials, which you received via the Strait of Hormuz, that's could now run into a bottleneck and then of course, that's the sales force.

Speaker #3: And then the Koreans came, and BMW continued to grow. And now the Chinese are coming, and I'm sure they will be able to secure market share for themselves.

The Middle East is of course, very strong luxury market traditionally speaking so what does that mean for BMW, probably particularly rolls Royce right.

Speaker #3: From whom ? Well , I think that's a question for other OEMs . We will continue to grow with our product lineup , and we will also we also have these new launches , plug ins , BEVs .

The second question, China Mathematically you mentioned there than in the first half of the year, we initiated measures regarding price stabilization actually had a negative impact maybe you can explain a bit more what you meant by that so what is the outlook for the full year in China, not just regarding sales development, but also regarding the.

Speaker #3: We think also combustion engines will not only remain stable with market share, but we think that we'll be able to grow there as well.

Speaker #3: Similar to the Japanese and Korean manufacturers , I'm sure the Chinese manufacturers will be able to conquer some market share , but we assume that it won't come from us .

Returns and where you actually see the long term outlook for the Chinese market going forward.

Speaker #3: Thank you for that . Clear question . And thank you , Martin Hesser from Spiegel .

The question is also is the luxury market they are going to recover at some point or is the world. They are simply so fundamentally changed to what it was a couple of years ago and the third question is EU regulation, Mississippi, you've made it very clear that you.

Speaker #2: Next question is from Felix Stippler, Handelsblatt. Good morning to Munich. I have a question on two specific topics. Number one, the situation in the Middle East.

You do not go with a pure tailpipe observation and that emission.

Speaker #2: Can you just take us on this journey to the board level? How do you have these discussions? Is that just a daily topic?

We are also supposed to be balanced by way of issuers and green skill with Green steel.

We recently heard more and more projects being canceled and stopped is there even an opportunity are there actually enough of those raw materials and with E fuels.

Speaker #2: Do you politics in general ? And also , how do you deal with that as the CEO ? Mr. . Simpson , as the chairman of the , also on the levels below the Board of Management , are there any specific teams that don't just deal with the conflict situations , but also , for example , monitor tariffs on a daily basis ?

Do the customers do the drivers actually accepted this fuel onboard which technologically speaking wouldnt be an issue but is it supported in a local content. That's of course, the next big topic with batteries. What do you think your opportunities are there to have major advantages and advances.

Speaker #2: And what is their result? What are their outlooks? And then the Coliseum is a metal follow-up question on the margin parity.

Speaker #2: You said it's possible until when , particularly with the i3 and the Ix3 , especially compared to the of course , the combustion engines .

Alright, thank very much with a man I'm going to D. V. These questions out nickel imagine is going to talk about that's a client changed rolls Royce Young Golar and then Walter metal and then we'll do the rest. So we'll start Nicole I will start with you.

Speaker #2: Until when can that be a reality? And how does the growing EV market in Europe support also your newer classes, especially in Europe?

Right.

We are of course observing the situation in and around Iran.

Speaker #2: Of course. First, Mr. — and then Mr. —. Metal, right? Thank you very much, Mr. —. We had a similar question before.

Closely at the moment there are no supply bottlenecks because of the current situation. There's also only one direct supply relationship to Dubai for aluminum, but we are absolutely hedged in the long run and we also have additional supply sources. So there are no impairments of production in this one thank you very much Johan entourage.

Speaker #2: Just to summarize, the situation in the Middle East is so young, so fresh, so brand new, that any and all forecasts regarding what that could potentially mean for the full year is purely speculation.

Speaker #2: And that's what we would be fueling . Now , what happens , whether it's semiconductor bottlenecks or any sort of an event or in terms of a natural disasters or any political upheavals , the first thing that happens is that we go into the supply chains , we go all the way down to the raw materials , and we're taking a very close look at every step .

As rice and sales development Middle East.

Paul.

Good morning.

First off Middle East these items on the BMW side is important but in the global context.

And looking at the percentage is relatively low target and now of course, we are not yet.

Speaker #2: And it's very important that this particular muscle that we've trained springs into effect, which is, of course, creating transparency across the entire supply chain at the moment.

Have only been in this particular contract for 11 days. So we just have to wait and see also for Rolls Royce we are globally well position middle East is in fact, an important market, but yeah. We just have to wait and see and observe what's going to happen in the next few months, we do assume.

Speaker #2: And let me just repeat that . We have no interruptions in the supply chains . The markets are also still quite stable , but an outlook in terms of when the situation would be over , what the overall impact could be on the full year .

That the situation is going to come down that if the situation calms down the customers would be returning back to us. So this is a very very early stage, we can't say too much but due to the fact that it rolls Royce just like with BMW. We have four regions America is going really well Europe is that a important market. We also assume that globally speaking, we're still well positioned.

Speaker #2: It's way too early, and it also would be pure speculation. Thank you very much. The second part of the question is on the New Class and the margin parity.

Speaker #2: Walter Mertl , please . Sure . Happy to repeat what I said previously . In some markets in Europe already in the here and now , actually , since this Saturday , we've had margin parity with the X three brother .

Excellent and with that being said I would like to hand over to Walter Mettler CFO regarding price stabilization in China and should we have any other open questions then Johan back to you.

Speaker #2: So it is reality . It's not in all markets . And of course the question is exactly what you're comparing to us . Are we comparing the I three combustion versus the x3 or the x3 versus the x3 ?

Good morning, Ms Amanda in.

In the second half of the year we.

Started.

Initiating.

Product measures in China in parallel to stabilizing our dealership network and restructuring as well.

Speaker #2: Depends. But in some markets, already today we have the margin parity. Thank you very much. That's Felix Shipler from the Handelsblatt.

By way of these additional measures of course, it there's a slight negative impact however, what we do find and what we do want to stress here is that the transaction prices in the market.

Speaker #2: Next question is from the Berlin Zeitung. Joachim Ham.

Our products have stabilized are stabilizing and are actually improving slightly compared to Q3. We also see that the product offering is received well the.

Speaker #1: Was beim Ton machen, entweder Joachim, du, oder...

Speaker #2: Let's see if the audio signal works. So sorry, Joachim. We cannot hear you at this moment.

Dealerships are going better and more smoothly were how do we see it well. It's because we are of course looking at the budget on a run rate and sales in the first two months are exactly how we envisioned and that's why of course you also asked about the overall outlook for China. If the run rate continues this way we have the opportunity to go back to prior year level in China. Okay. Thanks, very much bye.

Speaker #1: So Kannst du vielleicht . Wir können ich nicht .

Yeah, maybe back to you.

Maybe just a short outlook regarding the Chinese market.

Speaker #2: So sorry, we can't hear you, Mr. ___. We'll circle back to you and we'll head to the next question for now.

Sure. So mathematical just set it we see a stabilization regarding the BMW business since Q4 in fact, and we've actually started the new year quite solidly.

Speaker #2: Who's up next in line ? Andreas Huss

This large a product initiatives that we've kicked off around the globe. We're of course also doing in China, we have a huge kick off in April at the motor show, we're going to be showing three new models world premieres. We're also going to be there with the board of management and so we do see.

Speaker #1: Mentioned

Speaker #2: Münchner Merkur . So Mr. Hirsch , over to you .

Speaker #6: Hello . Good morning .

Speaker #2: Good morning , and thank you very much for having me . Just two follow up questions . Number one , it's about the best share in the ongoing year , because I was also a bit surprised by the fact that you don't expect any more than the 18% , despite the introduction of the new class and so on .

A.

A very solid volume development pricing structure has lots of decisions that we've made at the product space product portfolio are showing effect and we're going to hate me, having new models coming into the market in second half of the year. So as of right now as Mr. Matto said, we assume that there was going to be a solid trajectory.

Speaker #2: So maybe you can just comment on that a bit more in terms of why that is . Does that really only have to do with the delay or with the step launch across the world , or does it have to do with anything else technical situations or political framework , whatever have you ?

Doctors and we're aiming for prior year levels. Thanks.

Thanks, very much and then the third question was regarding the EU regulations are we.

Speaking about Green steel and if you would add the big opportunities come over to our CEO.

Speaker #2: And the second follow up question is on people . Unlike other large German manufacturers , you don't have any job cuts . But maybe still on temps .

Well.

Everything a grandma COPD that we can reduce today is just as valuable or even more than one that we can reduce in 2035 and I think we should all take a step back.

Speaker #2: That's, of course, something that is very much a breathable entity. When things go better or worse. So we're temporary workers.

Slide and look at the major C O two.

Emissions and where they come from it's the fleet.

Speaker #2: Are those numbers fluctuating ? Right . Thank you very much . We'll start with Johann Golla . Good morning , Mr. Haas . Now for one , of course , the development of Electromobility is very different across the world .

Hello.

And then we have of course been preparing we've been prepared to use the regenerative fuels and I think the Best example is what happens diesel H B O 100, there are more than 700 gas stations in Europe, sorry, 7700, 7000 gas stations that can do this so this is really quiet widely covered across the.

Speaker #2: In Europe and in China , it's very strong in the United States . It is relatively muted , but that is not the reason for our outlook on prior year level , because in fact , the it's really the new cluster wrap up .

And I think if you just get this particular fuel you can reduce the C O two.

Speaker #2: We have started now in Debrecen . We are particularly , of course , applying to the European region . And you're going to be seeing a significant growth in the vehicles .

Emission footprint by 90% already so it's already here, it's not something.

Speaker #2: And then in the second half of the year , you're also going to be seeing more supply trickling into the United States . And then from the United States , pardon .

You know intangible in the future I think that's important and we don't know why they can't be fed into the regulation now we believe it is important to reduce C. O two across the board and this of course includes our electro ability.

Speaker #2: And at end of the year , also from China . So it's the story of the ramp that we're starting with the Ix3 , the i3 , which of course we're going to be introducing , is also only going to hit the shops at the end of the year .

At a large scale.

We've proven this with the Nye classic, but we believe this isn't enough, but we believe this technology is still going to be a huge step. So we once again try to make the case for a wide ranging approach, which is more important than the current regulation or even a reworked regulation.

Speaker #2: And that's why the impact is going to be visible from full year 2027 . This year , you're going to see very different regional impacts and numbers across the board , but still on prior year level .

Speaker #2: And again , you just have to see that we're coming from a very , very high level , right ? So we're already at 18% , 25% of electrified vehicles .

Local content, what we say that the European industry is of course, an expert industry and if we take local content seriously. This export share of the European industry needs to be taken into account, which at the moment is not the case.

Speaker #2: We're going to maintain this in the next year. We're going to grow across all regions. Right. Thank you very much.

Thanks, very much Smith Amanda for the question I would now like to call upon the next person.

Speaker #2: Part two of the question was regarding people and temp workers . Mr. Hurst , I already said our HR structure is relatively or very flexible .

So does this Texas stuff, we are mindful that Christoph <unk> from TIAA.

Can see Ya good morning, Mr. Hu. Please ask a question.

Speaker #2: I should say . We're using all flexible instruments . Of course , you know , the working time account also temporary workers , anything you you could have , of course , temps fluctuate wildly , both in terms of utilization and market demand .

Yeah.

No absolutely.

Thank you.

No mythify I'd be particularly interested about the staff numbers.

If I read this correctly there was a slight decline last year.

Speaker #2: The individual sites, it's always going to go up and down and be flexibly adjusted. That's why it would be unprofessional to give you a hard number or particular deadline, but I would still like to comment on the fact that we are going to be using this instrument for flexibility. And I believe it's also a beautiful opportunity to give the people who are temp workers in the company the chance to actually seize the opportunity to start working at BMW.

And that's expected to continue this year is there a reason for that.

And is there something that's happening in Germany.

Something broader maybe.

Somewhat blunt question is there a head count reduction plan, there's no plans for that at the moment is that correct.

Eagle Hoffmeyer.

Yes, my months here that could even go further than silver Meyer. Thank you for that important question. It's not only important for you but of course, we're also for our employees now let me try and explain it now HR planning is a core of our HR work and we're always looking at our staff structures also.

Speaker #2: We've done that for hundreds and thousands of employees across the company in the last few years, and I think it's a really nice building block for both sides of the equation.

Speaker #2: Thank you very much. We are now moving on to Tim Liu from Bloomberg. Hi, Tim.

Speaker #7: Good morning. Thanks so much for taking my question. I just wanted to take a moment to have a kind of big picture question.

For the future.

Make adjustments.

We have now prepared them knowing that as I said, we have invested in structures and technology.

Speaker #7: In recent years, you guys have gotten a lot of credit for being quite pragmatic with your EV plans. In a time when the transition has been rather bumpy, to say the least.

At least in skills.

And our employees and in recent years, we've had the biggest training initiatives, if a software digitalization and of course AI with around.

Speaker #7: And now that you're ramping up the Class-A , I'm curious if you could sort of just look out a little bit over the next 5 or 10 years and say , what's different about the demand picture now globally , that makes this the right time for this ramp versus , say , in the 25 , 20 , 15 to 2025 period .

$1 billion invest.

Investments in recent years, that's incredibly important.

To do precisely what we're doing now with the noise classic the IX three or the three series. That's soon to be launched so that's very important.

No of course, we have to take account of the external market, but.

Speaker #7: A and then B , I read an interview with Mr. recently . By 2030 , it's very plausible that the Bev share could jump up , maybe even to 50% for BMW .

With this.

Technological advance we've also made advances in optimization of our processes and we can see this at the moment. We saw this last year and this will continue this year, we've seen that our optimization automation and digitalization and AI initiatives are bearing fruit and of course that has an effect on the staff requirements that was the case last year and it was.

Speaker #7: But after that , the growth might slow down on that . So if you could just maybe explain why you see that as a potential trajectory .

Speaker #1: Thank you Tim Oliver Zipse

It will be the case this year and it's important for me to emphasize we are using our existing HR.

Speaker #2: Thank you very much. Oliver Zipse.

Tools and using their modules that we've been using in the company for years and we take account of a natural fluctuation as well very impulse and perhaps one last remark.

Speaker #1: Sorry , sorry

Speaker #8: Sorry, Tim. Let's have a look at after the 18%.

Employment is secured at BMW.

Speaker #2: Last year , of course , we had 18% . If we assume that with the new class , there's definitely going to be a push for it in Europe and then rest of the world , let's assume that we are going to triple our volume in the next 4 to 5 years , right ?

We will continue to offer our apprenticeship and training positions that's important for our future and for young talent. That's incredibly important that so that's referring to the last question.

No.

Speaker #2: I'm not even going to look at ten years. Let's look at four to five years. Then it will be around about 50% globally.

Thank you that was the question from Christophe where am I affirmed DPA. The next question.

Speaker #2: Speaking . Tripling anything in our industry is enormous because we always forget the scaling , right ? Everything is large , global , incredibly complex in our industry .

Is from Sebastian <unk> from the financial times.

Jan.

Yes, good morning, everyone.

Got three questions.

Speaker #2: So, let's assume there is a tripling. Then, in many regions of the world, you're going to hit the actual limit of infrastructure, the limit of customer demands.

Now you are forecasting.

The downturn for this year.

Because of the effects of tariffs.

In comparison to last year, what's the reason for that because some comic as I was saying that there'll be a greater effect size. So.

Speaker #2: So at this point , especially also driven by the newer class in this segment , in the next few years with a different vehicles , we definitely see significant growth .

Can you explain why you don't think it's going to have such a great effect. The second question.

Speaker #2: And then at that point , and I'm really speaking of a global average , I'm not talking about individual countries because individual countries , there's going to be individual countries that are going to end up somewhere at 100% .

You have a larger range of Drivetrains.

<unk> hydrogen drive.

Speaker #2: But if you look at China , Europe , rest of world , and then particularly if you add the United States , where at the moment this is really slowing down , then 50% global market share is very , very much in just such a short amount of time .

Trained so.

Will there be range extenders as an option in the near future as well.

And on the question of E mobility.

Speaker #2: And then we can expect and of course , you know , that we are a technology open company . Then there is going to be a moment when an equilibrium comes into play , when other drive trains will reposition themselves .

Martin you expect your market share.

For this year that will be more or less the same as it was in 2025.

Can you perhaps outline.

Why.

Speaker #2: Right ? There might be a fifth drive train situation that is not so much dependent on battery technology . You're going to be needing drive approaches that have a mixed approach , like plug in hybrids , range extenders .

There won't be any fluctuations there this year and can you, perhaps also outlined whether there'll be any regional changes there. So what's the score in Europe in comparison to the USA.

Speaker #2: Those things are going to grow more. So I think the outlook from the user said it was pragmatic. We call it customer-oriented.

For instance in comparison to China. Thank you well begin with voting matters regarding the forecast.

Speaker #2: I think from that particular perspective, to end up at around 50% is simply not unrealistic. And that's why also in 2035, and then following for the regulation, we try to really make the case for remaining technology open.

And then regarding the dry mixing range extender.

Have a.

Development.

Remember and then.

Yeah.

Thank you Mr. Ashley.

Speaker #2: And we try to really make the case for focusing on the tremendous strength of the German automotive industry as an export industry, to not underestimate it, and to not initiate anything that could jeopardize this particular position in the global market.

In our forecast we posted it with what we can expect from the terrorists and we assume that in the first half of the year, we won't see any changes that is to say.

Round V a 175% that we saw in the third quarter.

Speaker #2: market . Thank you very much . And with that , we are wrapping up our press conference . I would like to thank you all very much .

In our P&L.

I expect that to remain a bit in the second half of the year, we assume that there will be new.

Speaker #2: These were the excellent questions at the BMW Group Annual Conference 2026. Again, thank you very much for joining us. Just a quick note: our second Q&A session with Oliver Zipse and Walter Mertl will begin at 11:00 a.m.

Remains on the one hand, an agreement between the USA and Europe.

Europe will finally sign that that we will then have a zero percent and b that there will be positive agreements made between the U S, a and Mexico, and Canada and further nations as well and given that we assume that the full year effect of that.

Speaker #2: This is going to be aimed directly at the analysts and investors. Stefan Reichmann is going to be the host of that particular event.

Speaker #2: And with that, ladies and gentlemen, and your colleagues, thank you very much for your interest and for having joined us at this call.

It was a 1.5% last year in 2025, we have seen that in 2026, we'll be at one point to 82, 5%.

Speaker #2: And thank you very much for also having turned on your cameras. By and large, and once again, so sorry for the technical glitches at the beginning.

Thank you.

Now, we'll talk about the drive makes I'd like to.

Speaker #2: But of course , at the very end , everything worked seamlessly . Thank you very much . All the best from Munich and all the best from everyone here on stage .

Pass this over to our board member for developments. Thank you. Mr. For your question. He knows it and technology openness is one of the main pillars of our strategy and that's why we are fundamentally offer all drives from combustion to plug into a hybrid or all electric now the X five well.

Fluffy provided with the fuel cell as a 2028 for the first time why well because we are convinced that that will be a further alternatives that will be needed for <unk>.

Climate mitigation climate change mitigation, we think that fuel cell technology can make a contribution there with them knowing that we have.

Our six iteration of the battery cells and we have made a huge contribution to hit your range. So we don't think that there is any.

Costs were concerned about range that if we have a range of.

Far beyond 800 kilometers.

And 400 kilowatts Charger power, we're of course, keeping an eye on.

All of the options.

Out there and seeing where the range extenders are something that we need to integrate into our portfolio, but at the moment, particularly with what we have with the Nordic cluster. We think we're in a very good position without it. Thank you and the last question was regarding to E mobility and market shares this year young gala.

Thank you know growth is always looking at the baseline as well and in 2025, we had a very high baseline.

No.

Uh huh.

We had around 18% market share.

And 25% electrified.

And this year, if we look at Europe.

Above 40% electrified vehicles when we're looking at the share volume. So that baseline is very high we want to achieve growth with the Nordic cluster and you're correct in saying that there will be a regional differences because of course, the nordics ASUR will first be launched in Europe.

In the second half of the year in the USA and towards the end of the year in China as well. Thus this year we are aiming.

Uh huh.

Strong growth in <unk>.

<unk> in Europe, and then in the following years as the Northern classic is a rollout we seek to grow more of that thank you.

Yeah.

I would now like to also reach a written question and this is a question to me the antidote, which production.

What's the skull with the rollout of the noise that's in excess of five and seven this year.

America can customers expect a punctual deliveries.

Thank you for the question.

In recent years, we have.

Prepared our global production systems for the launch of the Northern classic, but also for all models that will follow.

And.

Davidson in our new plant restarted production and we are starting to scale production there as well so that we will be able to provide the X three in accordance with market demand at the same time.

The Spartanburg plant is preparing for the.

New models and all of the preparations are on time, we will be able to ramp up production there.

On time, as well and deliver on time.

Doug.

And thanks to the good demand for our vehicles.

The plants have.

Lot of Otis. Thank you Milan Zurich, which the next question is from Stefan academics from the suite at your title.

Doug.

Good morning.

Thank you good morning to everyone.

Two questions regarding the end customer.

On the one hand.

One.

Mr. Bradley you were talking about pricing.

Sure.

Which you'd already.

Felt last year, perhaps it can be a little bit more specific about that as to whether.

That is the same across the world.

And whether it's the same across all of the different drivetrains, all waters, particularly subject to pressure that set.

Lee U.

Do you expect a decreasing residual values for used cars here again, the question would that be the same across the entire portfolio.

For all of it.

Drivetrains and to what extent.

And then.

Based on that question, what does that mean for leasing rates, what do you expect in that regard.

Matthew.

Because the.

Electric market is.

Pretty much driven by leasing at least for private customers.

So a decline in residual.

Values would then generally mean that there would be increasing leasing rates. So would it be cheaper to buy an electric vehicle and there would it be more expensive to Liza <unk> cluster.

Automatic.

Pricing pressure is not the same everywhere in the world of course, there are regional differences and in our forecast, we particularly looked at China, you know that in the last two years to have.

<unk> been some quite intense.

Differences in prices there.

Since the third quarter, we've been able to address price stability, particularly with the product measures that we've taken regarding our residual values for used cars declining what we need to read. This device was a decline means that I would say that they are less positive positive than they were in the 2025, where they were.

If positive.

<unk> 23, they were more positive than in 2024, so we see that the.

Xtra.

Going back coming down.

Congratulations.

And this was all due to availability.

We're seeing a downturn that you can see this in all of the different indexes in AR.

The USA, but they're still positive, but not as positive as in the previous year.

Whether that's the same everywhere well, we do indeed see to an extent a trend for all electric vehicles and for combustion vehicles.

They are relatively stable, but there are regional differences here as well.

The same across the world a different situation in Europe than in U S leasing rates of course are not only consistent.

They consist of <unk>.

Production costs. There's also a question of Competitivity competitiveness and if you have very convincing products, which are in high demand then of course that will.

Have an effect on leasing rates and that doesn't have anything to do with the residual values. Thank you Mr. Gadomski from the Hitachi sides and.

I hope that helps.

Happy to hear some optimistic opinions from our CFO and the next question is from Steven very much.

Wall Street Journal Hi, Stephen.

Stephen Thank.

Thank you for the opportunity.

That's the first question.

Great to have a bit of an update on margin on the question of margin parity.

Hum.

Between Evs and.

Conventional drivetrains.

And secondly, which is a bit related I guess.

Which is zero margin outlook do you expect to get back to I guess, what we would have.

What is considered normal levels of maybe 8% 10%.

Anytime.

Within the medium term.

Can you give us any idea of longer term.

Margin outlook given.

This 46%.

Guidance for 2026.

In the context of I guess of rising EV.

And this question of margin currency.

And then just thirdly.

It'd be great to hear your thoughts finally on the.

All the add on advance to address them and.

It was recently reported that.

The priority.

No.

The so called level free.

Graham.

And doctors you've got these partnerships with momentum Qualcomm, which are more focused on.

Yeah.

<unk> kind of point to point urban mobility.

Great to to understand where you were with us and that the timetable for rolling the house in a more comprehensive way. Thank you.

Steve.

It's kind of matches up.

Thank you Steven just.

Ryan.

I'd say what was the margin parity between.

Vehicles and combustion then.

Long term our margin outlook of automatically will deal with those questions. Then we came to some technical questions.

Our head.

Our head of development will talk about that particularly at level three the idea as system will begin with Nevada.

Hello, I'm still very much now regarding margin parity.

Last time.

I E. We're able to talk about that and it's still applies regionally. We do see differences. If you work in lots of different countries, which are subject to tariffs than margin parity.

We will not be something necessarily that we can say optimistic for the future, but in Europe, it's pretty good margin parity, particularly with the Nordic cluster is possible. That's why over recent years, our engineers have.

<unk> been very happy to work together with our CFO and we've all worked together.

To achieve this margin parity.

This return to the 8% to 10% now that is our strategic goal.

For all of these problems, but you know that there are lots of influences that way.

They can get a perhaps a more difficult to achieve that.

It's tariffs, which have an over proportional effect.

Exchange rates, which aren't necessarily great at the moment, either our clear goal our clear plan is however.

Oh, yes, we're working on all of these elements you can see from the 2025 that we were.

Pay particular attention to fixed overheads, but also investments.

And that will continue to play a role and in 2026, we will pursue that so that on the performance and production costs and overhead side, we will.

Beyond the ball.

When this all comes together in the medium term that will have an effect on achieving the 8% to 10%. Thank you of outside of that brings us now to the third part of the question that was the question about the other system and the partnerships with momentum and Qualcomm I would like to ask Dr. Composite to deal with this question, yes, the noise cluster Mr. Wheeler much.

We will really be able to launch the next level of the a T S CIS.

So we call it smart symbiotic and say this is a unique driver experience it intuitively.

Hum.

It involves the driver and the whole system.

Have the hands off system.

Motorize up to 130.

Kilometers per hour that's.

Now been enabled in accordance with the provisions and we are now as you correctly said.

Kissing on level, two and level, two plus plus systems in Europe, and USA with the Qualcomm partners.

In China, our partnership is with momentum.

And with the launch of the Nordic cluster, we want to have an end to end function. So that's the level two plus plus.

A system that we want to integrate that theyre very attractive systems for customers, they're in high demand with customers why well because the sense is that they have on board with all of the safety systems and all of the regulations in.

In the vehicle, we've been able to fulfill all of the provisions we had the level three systems in.

And the vehicles, but we realize that the.

Demand for this was not.

Currently.

Stage, where we could be profitable and we have to be profitable, but profitable in our business of course. So that's why we no longer have a level three offer but that doesn't mean that we are going to continually.

Yeah.

Disregard higher levels and as soon as we have business models.

A feasible we will pursue them.

Thank you the next.

Question is from Martin <unk> from speak of the magazine Mr. Hassett. Please.

Good morning, everyone. Thank you for the opportunity to ask these questions.

Specific question about China, and last year and now you had a.

Sales downturn that you posted perhaps he can.

Split this according to Bev and other drive trains so.

Perhaps to be more specific did you see a downturn in bev sales.

Then I understood.

The U S.

We weren't necessarily expecting a huge sales effect from the Nordic cluster, but rather that you expect that to kick in in coming years, perhaps you can provide.

Provide us with more.

Moreover, the outlook for the coming years, perhaps also missing that are COVID-19 chassis designated GNU C. O. So what youre expecting for 2027 2020 eights, perhaps also if the USA and China, where do you think that there'll be a ramp up of Bev there as well, which will help and then perhaps a question on a slightly different tack.

Okay.

We see that Chinese manufacturers or it's expected the Chinese manufacturers are going to engage into further offensive in Europe. What do you think they will achieve do you think there'll be able to.

Secure new market share and where from who from do you think you'll be able to defend your market shares here in Europe and elsewhere.

Thank you imagine Hesse.

These questions will all go straight to our head of sales because he is responsible for that 123.

Good morning, Mr. <unk>.

China sales.

Indeed, our Bev sales did decline a little bit last year, but we were aware of that we were speaking about pricing.

Pressure, particularly in electric.

Electrified vehicles, we're not.

Oh, we didn't follow all of the pricing measures that.

And then we did hold back in some segments, but with the noise of class, a which will be launched in China at the end of the year and will show that that will be very well received and we think that that will lead to growth.

That's something that we're particularly say however.

In the books next year I won't tell.

Tell you any specific figures for our outlook now of course, but we are.

To grow we have invested.

Many billions of euros and lots of new products, and new models, which are either completely new or that have been significantly upgraded.

That's why we.

Seek to grow in all regions and that's the advantage that we have we are global.

We want to grow in Europe, we want to grow in China, we see Cigna.

Significant potential in the USA, where we have a good position and also in what we call the rest of world.

So those are the markets that are not covered by the other.

But I'm not going to tell you any specific figures on the question of.

Chinese manufacturers, let me turn this around.

A few years ago, the Japanese came to Europe.

W continue to grow in than the Koreans came and BMW you continue to grow and now the Chinese are coming and I'm sure they will be able to secure market share for themselves.

From whom.

I think that's a question for other Oems, we will continue to grow with our product lineup.

I would also we also have these new launches plug ins that we think also combustion engines.

Well not only remain stable with market share, but we think there will be able to grow there as well similar to the Japanese and Korean manufacturers I'm sure. The Chinese manufacturers will be able to conquer some market share, but we assume that it won't come from us. Thank you for that clear question and thank you Martinez from speakers.

Next question is from Felix strip club hundreds blood.

Good morning.

Good morning to Munich.

I have a question on two specific topics number one these situations released can you just take us on this journey onto the board level. How do you how are these discussions.

Is that just a daily Tau Baker geopolitics in general and also how do you deal with that as the CEO Mr tips as the chairman of the board.

Also on the levels below the board of management are there any specific teams that don't just deal with it the conflict situations, but also for example, monetary tariffs on a daily basis and what if there is a what are their outlooks and then annoy classic Mister metal a follow up question on the margin parity you said it's possible.

Until when particularly with the three D I X three.

Specialty compared to that of course, the combustion engines until when it cannot be a reality and how.

The next few months.

They're noncash Cipla does the growing EV market in Europe, So port Arthur, Illinois, Clatter, especially in Europe of course.

And then Mr. Metal alright, Thank you very much Mr. Chip, let we had a similar question before just to summarize the situation in the Middle East is so young so fresh.

Brand, new that any and all forecast regarding what that could potentially mean for the full year. It is a full speculation and that's what we would be fueling now what happens whether it's semiconductor bottleneck or.

Any sort of an event in terms of a natural disasters or any political upheavals. The first thing that happens as we go into the supply chains, we got all the way down to the raw materials and we're taking a very close look at every step and it's very important that this particular muscle that we've trained.

But the supply chain.

Springs into effect, which is of course, creating transparency across the entire supply chain and at the moment and let me just repeat that we have no interruptions in supply in the markets are also still quite stable, but it now looks like in terms of when the situation would be over what the overall impact could be on the full year, it's way too early and it also would be pure speculation.

Yes.

Thank you very much the second part of the question is on the <unk> class and the margin part parity but automatically.

Yeah sure happy to repeat what I said previously in some markets in Europe.

Already in the here and now actually since this Saturday, we've had margin parity with the X three brother.

It is reality is that in all market. Then of course the question is exactly what you're comparing to.

Are we comparing the I three combustion versus the X three or the ex cigarettes with the IAG three.

But in some markets already today, we have the margin parity. Thank you very much that's a fairly similar from Handelsblatt.

Next question is from the burden side, Tony Hawk in Ham.

Item was just a bit of a spectrum and davita.

You often do order.

Let's see if the audio signal works.

The conditional Nissan so sorry, you're asking we cannot hear you at this moment.

Yeah.

So.

Cancel for license Air conditioners.

Yeah. So sorry, we can't hear you Mr. Han.

Their friends on our well circle back to you some mix and will head to the next question for now.

Who is up next in line.

Andreas Hess.

I mentioned, the macro Lynch Nomura Columbia Vista, Thomas pass over to you.

Hello, Good morning, good morning, and thank you very much.

For having me just two follow up questions.

One it's about the deaths are in the ongoing here because it was also a bit surprised.

Yes.

By the facts.

That you don't expect any more than 18%. Despite the introduction of the <unk> class and so on so maybe you can just comment on that a bit more in terms of why that is that does that really only has to do with the delay or with a V.

Step launch.

Across the world or does it have to do with anything else technical situations of political framework.

Whatever have you.

And a second follow up question is on people.

Unlike other large German manufacturers, you don't have any job cuts, but maybe still on tense.

That's of course, something that is very much a breathable entity when things go better or worse. So regarding temporary workers are those numbers fluctuating alright, thanks, very much we'll start with Johan Golar.

Good morning, Mr. <unk>.

Now for one and of course, the development of electric mobility is very different across the world and.

In Europe and in China, It's very strong in the United States.

It is relatively muted, but that is not the reason for our outlook on prior year level because in fact, the it's really the northern class a ramp up we have started now in Debrecen, we are particularly of course applying to the European region, and youre going to be seeing a significant growth in our E vehicles and then in the second half of the year, you're always going to be seeing more supply.

Trickling into the United States, and then from the United States pardon and at the end of the year order from China. So sorry of the rapid we're starting with the <unk> three the <unk> three which of course, we're gonna be introducing is also only going to hit the shops at the end of the year and that's why the impact.

He is going to be visible from the full year 2027, this year youre going to see very different regional impact and numbers across the board, but still on prior year level and again you just have to see that we're coming from a very very high level right. So we're already at 18%.

25% of electrified vehicles, we're going to maintain this in the next year, we're going to grow across all regions.

Thank you very much part two of the question was regarding people and temp workers.

As I already said, our HR structure is relatively are very flexible I shouldn't say, we're using our flexible instrument of course, you know the working time account also temporary workers anything you could have of course <unk>.

Fluctuated wildly both in terms of utilization market demand and the individual side, it's always going to go up and down and flexibly adjust that that's why it would be unprofessional too.

Give you a hard number for a particular a deadline, but I would still like to comment on the fact that we are going to be using this instrument for flexibility and I believe it's also a beautiful opportunity too.

Give the people who are temp workers in the company. So that they can actually sees the opportunity to start working at BMW, we've done that for hundreds and thousands of employees across the company in the last few years and I think it's a really nice building block for both sides of the equation.

Thank you very much we are now moving on to Tim law from Bloomberg Hi, Tim.

Good morning. Thanks, so much for taking my question I just wanted to take a moment to have a kind of a big picture question. In recent years, you guys have gotten a lot of credit for being quite pragmatic with your EV plan isn't a time when the transition has been rather bumpy to say the least.

And now that you're ramping up the knowing a class I am curious if you could sort of just look out a little bit over the next five or 10 years and say what's different about the demand picture now globally that makes this the right time for this ramp versus say in the 25 and 2015 to 2020 by period, a and then B I Rana.

Interview with mist, etc, recently, where he talked about.

By 2030.

Very plausible that the ban share could jump up maybe even to 50% for BMW, but after that that growth might slow down on that so if you could just maybe.

Explain why you see that as a potential trajectory.

Thank you Tim Olivette gypsum.

Thanks, very much Ali with Ipsen.

Yes.

Yes.

Sorry, sorry.

So.

Let's have a look at our.

Yeah.

Uptick.

Yeah.

Yeah, Adam Watson last year of course, we had it.

If we assume you didn't hang Bush scheme.

They are definitely going to be a part of this person in Europe, and then rest of world, let's assume that we're going to triple our volume in the next four to five years right I'm not even going to look at 10 years lets look at four to five years and then it will be around about 50%.

Globally speaking tripling anything in our industry is.

Enormous because we always forget the scaling.

Everything is a large global incredibly complex in our industry. So let's assume there is a tripling than in many regions of the world you're going to hit the actual limits of infrastructure the limit of customer demands. So.

At this point, especially also driven by the Nordea classes.

And beyond.

In this segment in the next few years with the different vehicles, we definitely see significant growth and then at that point and I'm really speaking of a global average I'm not talking about individual countries because of individual countries. That's going to be individual countries that are going to end up somewhere at 100%, but if you look at China Europe rest of World and then, particularly if you add the United States, where at the moment.

This is really slowing down and then 50% global market share is very very much in a short amount of time and then we can expect and of course, you know that we are a technology open company. Then there is going to be a win win an equilibrium comes into play when other drive trains.

Trains.

We'll reposition themselves right there might be a fifth drive train situation that is not so much dependent on battery technology youre going to be needing drive approaches that have a mixed approach like plug in hybrids range extenders, those things are going to grow more so I think the outlook from us. It was that it was pragmatic we call it customer.

Oriented I think from that particular perspective to end up at around 50% is simply not unrealistic and that also in 2035 and then following for the regulation, we try to really make the case for remaining technology opened and we try to really make the case for focusing on the tremendous strength of the German automotive industry as an expert and industry to not.

I made it in to not initiate anything that could jeopardize this particular position in the global market.

Thank you very much and with that we are wrapping up our press conference I would like to think.

You all very much.

These are worthy excellent question at the BMW Group Annual Conference 2026.

Thank you very much for joining us just a quick note.

Our second Q&A session with all of its upset and allow you to model. It will begin at 11 a M. This is going to be aimed directly at the analysts and investors hundreds Stefan Stefan arrangement is going to be the host of that particular event and with that ladies and gentlemen, and dear colleagues. Thank you very much for your interest and for having joined US at this call.

And thank you very much for all having turned on your cameras firelight and once again, so sorry for the technical glitches at the beginning but of course at the very end everything worked seamless samples. Thank very much all the best for Munich, and all the best from everyone. Here onstage. Thanks, very much and see you next time.

Thank you very much, Oliver. Uh, and now, moving to Jose's third question, I would like to pass it on to Balta, and I think it goes pretty well hand in hand with Patrick's question on guidance 2026. So, Jose is asking how the lower and the upper end of the margin corridor in the Auto, uh, Auto segment, could be driven. Balta, over to you.

Yeah. Well, our cortisol is a cortisol, right?

So that's the reason why it's 4 to 6. And of course, as we are in the beginning of this year, everything could happen, as we remember in '25, '12.

Over the course of the following 8 to 9 months, also, a lot of things have changed, um, on the cost side, on the pricing side, across the geopolitics and, and the regions. So, luckily, we are a global player. And hence, in '25, we have been able to shift margins also, between China, with the success especially in Europe and the US.

And you can only do that as a global player, and we're happy to do that. Other than that, of course, it's about pricing. It's about costs, uh, targets—how we achieve them. And I think in '25 you saw that we executed,

Very good in my eyes, and of course, it's about, um, the tariffs—whether our assumptions are right or not. On the other side, there's always risk and there's always a chance.

And we try to organize them from a portfolio aspect. And, um, we manage that one in the same year this year, as we did it last year. And usually, you see that driving costs down is always a good thing, because that is in our own hands. All the rest we have to organize flexibly with the markets on the pricing side. But so far, I think 4 to 6 is a very good, um, prediction and guidance.

Thank you very much, Balta, for this answer. We will now move on to the next caller. We should be seeing Tim Rocosa from Deutsche Bank, and we see him right here already on screen. Good morning, Tim. The stage is yours—please go ahead with your questions.

Tim, we are not hearing you, and I'm wondering whether there's a technical issue on our side or whether it is on yours.

Yeah, sorry. I was not unmuted by the host yet. Now I’m here—can’t believe how happy I am about that. It was unusual.

Thank you very much. Uh, so thank you, Stefan. Oliver, and Walter. I have two and a half questions, please. The first one goes to you, Oliver. Um,

Oliver Zipse: are restrained from developing themselves. One portion is, yes, they go from 100% to 90% CO2, but how to achieve that in the small print, it actually works against technology openness. The second element, that was not in the legislation before, they tried to put European content in such a way that export models and the German car industry, which is very much export-oriented, is neglected. All the European content which comes out of export is simply not taken into account, which is a very dangerous thing, I think, because this creates a lot of job and a lot of value. To only favor smaller cars which are 4.20 meters in length. You can do that.

Oliver Zipse: are restrained from developing themselves. One portion is, yes, they go from 100% to 90% CO2, but how to achieve that in the small print, it actually works against technology openness. The second element, that was not in the legislation before, they tried to put European content in such a way that export models and the German car industry, which is very much export-oriented, is neglected. All the European content which comes out of export is simply not taken into account, which is a very dangerous thing, I think, because this creates a lot of job and a lot of value. To only favor smaller cars which are 4.20 meters in length. You can do that.

Oliver Zipse: We don't mind giving incentives. How it's written, it creates two classes of cars and that of course reduces the competitiveness of the whole industry, you know. The small print behind it is still very much technology unopen, too much focus on electric only, and not enough focus on real CO2 reduction. I end with a question, what happens to a regulation where the markets will, in the electric arena with also our products, grows to 50% market share, and then it stalls? If that regulation is implemented and that is happening in the market, you will shrink this industry. I think this is a dangerous path to go to. With that, I stop. I was supposed to be short. Thank you.

Oliver Zipse: We don't mind giving incentives. How it's written, it creates two classes of cars and that of course reduces the competitiveness of the whole industry, you know. The small print behind it is still very much technology unopen, too much focus on electric only, and not enough focus on real CO2 reduction. I end with a question, what happens to a regulation where the markets will, in the electric arena with also our products, grows to 50% market share, and then it stalls? If that regulation is implemented and that is happening in the market, you will shrink this industry. I think this is a dangerous path to go to. With that, I stop. I was supposed to be short. Thank you.

[Company Representative] (BMW): Thank you very much, Oliver, but I think the message came across. A second question over to you, Walter, was with regards to the guidance 2026, our provision on the Chinese market, its development, whether it might be too optimistic. Please, over to you.

[Company Representative] (BMW): Thank you very much, Oliver, but I think the message came across. A second question over to you, Walter, was with regards to the guidance 2026, our provision on the Chinese market, its development, whether it might be too optimistic. Please, over to you.

Walter Mertl: Too optimistic. We rather like risks to incorporate them as Germans, don't we? No, we do not. We have to see chances and risks. With respect to China, if you really compare the last six months and you see month after month or you eventually rather quarter by quarter, you will see that the dealer network and all these measures we have taken in place are starting to get more grasp and starting to be more effective and stabilizing the dealer network. That's the first of all, because in the Chinese environment on all dealers, not just BMW, the whole industry, there's still a lot of irritation, let's say, with all these new rules also come in place, right? That price has to be finally over costs, which I really appreciate from SAMR, the new rules which they also double check.

Walter Mertl: Too optimistic. We rather like risks to incorporate them as Germans, don't we? No, we do not. We have to see chances and risks. With respect to China, if you really compare the last six months and you see month after month or you eventually rather quarter by quarter, you will see that the dealer network and all these measures we have taken in place are starting to get more grasp and starting to be more effective and stabilizing the dealer network. That's the first of all, because in the Chinese environment on all dealers, not just BMW, the whole industry, there's still a lot of irritation, let's say, with all these new rules also come in place, right? That price has to be finally over costs, which I really appreciate from SAMR, the new rules which they also double check.

Walter Mertl: I'm really highly appreciating those. That's already a positive sign with respect to the transaction price. We see that in December, in January, in February, and they are stabilizing and even rising. They are becoming better, positive for us. Second, we also did a lot of product measures. In November, we started the first launch, in February, the second one, and the next one will come. We are enhancing product attractivity and increasing transaction prices for those products, and it works. The third one, which is, well, take it optimistic or realistic, whatever. If you see the run rate of our sales in China, if it moves on like that, we can achieve previous year. Of course, if everything is crashing, then we have a different scenario, but our run rate is stable. Don't mix up the Chinese New Year.

Walter Mertl: I'm really highly appreciating those. That's already a positive sign with respect to the transaction price. We see that in December, in January, in February, and they are stabilizing and even rising. They are becoming better, positive for us. Second, we also did a lot of product measures. In November, we started the first launch, in February, the second one, and the next one will come. We are enhancing product attractivity and increasing transaction prices for those products, and it works. The third one, which is, well, take it optimistic or realistic, whatever. If you see the run rate of our sales in China, if it moves on like that, we can achieve previous year. Of course, if everything is crashing, then we have a different scenario, but our run rate is stable. Don't mix up the Chinese New Year.

Walter Mertl: There's always a difference between January and February. That has always to be a year-to-date February number. Otherwise, you would fail yourself. Taking all this into consideration, we see the chance, and we wrote in our guidance that we can achieve previous year. We didn't say that we want to achieve the previous year. Of course, we also aim for profitable growth. That's, and stabilization, always the thing. Given all the facts and given what we did in the network, we can achieve previous year. Even if you compare the numbers year-to-date February, once you saw them already from CAAM, you see that we are still on a very good track compared with all other competitors, whether they are Chinese or traditional ones. From that perspective, I still think what we wrote is absolutely spot on and correct.

Walter Mertl: There's always a difference between January and February. That has always to be a year-to-date February number. Otherwise, you would fail yourself. Taking all this into consideration, we see the chance, and we wrote in our guidance that we can achieve previous year. We didn't say that we want to achieve the previous year. Of course, we also aim for profitable growth. That's, and stabilization, always the thing. Given all the facts and given what we did in the network, we can achieve previous year. Even if you compare the numbers year-to-date February, once you saw them already from CAAM, you see that we are still on a very good track compared with all other competitors, whether they are Chinese or traditional ones. From that perspective, I still think what we wrote is absolutely spot on and correct.

Walter Mertl: With respect to the tariffs, why I am baking them in already. Well, I think we have to mention that one, what our assumption is, plus a quarter of an EBIT margin. Yeah, that is also a lot of money. We will also find some assumptions and some measures in order to compensate should we fail in our assumption. You saw that last year. 12 months ago, we've been the only ones mentioning that we bake in 1% extra cost for tariffs, and ultimately, they have become 1.5. We found measures to try to compensate this 0.5 percentage point. Now we speak about a difference of 0.25%, and we still have 9.5 months to go.

Walter Mertl: With respect to the tariffs, why I am baking them in already. Well, I think we have to mention that one, what our assumption is, plus a quarter of an EBIT margin. Yeah, that is also a lot of money. We will also find some assumptions and some measures in order to compensate should we fail in our assumption. You saw that last year. 12 months ago, we've been the only ones mentioning that we bake in 1% extra cost for tariffs, and ultimately, they have become 1.5. We found measures to try to compensate this 0.5 percentage point. Now we speak about a difference of 0.25%, and we still have 9.5 months to go.

Walter Mertl: On the other side, we really hope that tariffs will be lowered across the world, because free trade would be best for everyone. That is also a communication from us to everyone. Hope that helps.

Walter Mertl: On the other side, we really hope that tariffs will be lowered across the world, because free trade would be best for everyone. That is also a communication from us to everyone. Hope that helps.