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(Sharecast News) - BMW reported resilient 2025 earnings on Thursday despite rising tariffs and weakening demand in China, but warned that trade tensions and intense competition are likely to weigh on profits again this year.
The German carmaker said earnings before tax fell 6.7% to 10.2bn in 2025, while revenue declined 6.3% to 133.5bn.
Net profit slipped about 3% to 7.45bn, although the company maintained a stable group EBT margin of 7.7%.
BMW said disciplined cost management helped offset mounting external pressures, including tariffs and currency headwinds, with expenses reduced by around 2.5bn during the year.
Chief executive Oliver Zipse said the company's long-standing strategy of maintaining a wide range of drivetrain technologies - including combustion engines, plug-in hybrids and battery-electric vehicles - had allowed the group to remain resilient in a challenging market environment.
Vehicle deliveries rose slightly to 2.46 million units in 2025, an increase of 0.5% from the prior year, as gains in Europe and the Americas helped offset a sharp decline in China.
Sales in China fell 12.5% amid intensifying competition from local manufacturers, while deliveries in Europe grew 7.3% and rose about 5% in the United States.
Electrified vehicles continued to drive growth within the portfolio.
BMW delivered more than 640,000 electrified vehicles globally in 2025, including 442,056 fully electric cars, meaning battery-electric models accounted for about 18% of total sales and roughly one quarter of vehicles sold were electrified, the company said.
Profitability in BMW's core automotive division weakened as tariffs and competitive pressures took their toll.
The automotive EBIT margin fell to 5.3% from 6.3% a year earlier, with the company estimating that tariffs alone reduced margins by roughly 1.5 percentage points, according to company figures and reporting by Euronews.
Despite the pressure, BMW said it continued to invest heavily in its next generation of electric vehicles through its Neue Klasse platform, which debuted with the electric iX3 and is expected to underpin more than 40 new or updated models by 2027, including future versions of the 3 Series and X5, Bloomberg reported.
The company said demand for the iX3 has been strong, with one in three European pre-orders for a fully electric BMW model linked to the vehicle.
Looking ahead, BMW forecast a cautious outlook for 2026 as geopolitical and trade risks persist.
The company said it expected global deliveries to remain broadly flat and anticipated a moderate decline in group pre-tax earnings, while the automotive EBIT margin was projected to fall within a range of 4% to 6%.
Tariffs alone were expected to reduce margins by around 1.25 percentage points this year.
"Our world remains unstable, and numerous risks will persist in the current financial year," Zipse said, adding that BMW intended to continue executing its strategy rather than change course despite the challenging environment.
At 1125 CET (1025 GMT), shares in BMW were down 1.06% in Frankfurt at 79.96.
Reporting by Josh White for Sharecast.com.