BMW is targeting a return to growth in China (its largest market and where there has been a significant drop in consumer demand for BMW and also MINI), with the launch of its all-electric Neue Klasse series, beginning with the iX3 SUV. The model is set to debut in China by summer 2026.

Chief Financial Officer Walter Mertl told, “We are more than competitive with this product. With increasing availability of the Neue Klasse, we will see growth in China again.”

The move comes as BMW AG faces stiff local competition and a slowdown in Chinese luxury car demand, which led to a 15.5 percent drop in China sales during the first half of 2025.

Key features of the Neue Klasse include batteries that are 40–50% cheaper than current models, helping BMW achieve margin parity with combustion-engine vehicles by 2026. The company aims to raise its automotive EBIT margin from 5 to 7 percent in 2025 to 8 to 10 percent in the future.

BMW plans to phase out older models by the end of the decade, focusing on the Neue Klasse series to boost profitability and competitiveness, especially amid global tariff adjustments, including U.S. import duties.

Meanwhile, good news that EV batteries in the new vehicles were between 40 percent and 50 percent cheaper than those in existing models, which is a key factor in helping the group boost profitability.

With recently launched the iX3 50, BMW could achieve margins equal to combustion engine equivalents which is so-called margin parity already in 2026. Turning to import tariffs in the United States, where BMW has its biggest production plant, Mertl reiterated that the duties would drag BMW’s profit margin down by 1.25 percentage points in 2025.

The European Union plans to remove duties on imported U.S. industrial goods in return for a U.S. tariff rate of 15 percent on European cars which is down from the current 27.5 percent which automakers hope will apply retroactively from August 1.