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Introduction & Market Context
Bayerische Motoren Werke (BMW (ETR:BMWG)) unveiled its strategic vision for the future during its May 2025 investor presentation, highlighting the upcoming Neue Klasse platform as a cornerstone of its growth strategy. The presentation comes as BMW navigates challenging market conditions, having recently reported a slight decrease in 2024 revenue to €142.4 billion and a 4% drop in vehicle deliveries to 2.45 million units.
Despite these headwinds, which contributed to a 2.38% stock decline following its recent earnings announcement, BMW maintains a forward-looking stance centered on electrification, digitalization, and sustainability. The company’s stock currently trades at €74.96, representing a P/E ratio of 4.8x, which suggests potential value for investors despite near-term challenges.
Strategic Initiatives
At the heart of BMW’s presentation was the introduction of the "Neue Klasse" (New Class) platform, scheduled for launch in 2025. The company positions this as a transformative initiative that extends beyond individual vehicles to represent an entirely new generation of mobility solutions.
"The Neue Klasse is more than just a single vehicle. It marks the beginning of a completely new generation," CEO Oliver Zipse emphasized in the recent earnings call.
The platform focuses on two core pillars: electric and digital capabilities, with BMW claiming it will take the efficiency of battery electric vehicles (BEVs) to a new dimension, matching the range and margins of internal combustion engines.
As shown in the following presentation slide outlining the Neue Klasse vision:
The company’s electrification strategy has already shown some positive results, with BEV sales increasing by 13.5% in 2024, now accounting for 17.4% of BMW’s total sales. By 2030, the company expects BEVs to represent more than 50% of its global sales and to be available across all current market segments.
BMW’s extensive electric vehicle lineup demonstrates its commitment to this transition:
Technological Advancements
A significant portion of the presentation focused on BMW’s battery technology advancements, particularly the upcoming sixth generation of battery cells. This new generation promises substantial improvements across multiple metrics:
- 30% increase in range
- 20% improvement in overall vehicle efficiency
- 30% faster charging speed
- 40-50% cost reduction at the battery pack level
- At least 50% reduction in CO2 emissions across the supply chain compared to the previous generation
These advancements are visualized in the following slide:
To support this battery strategy, BMW is expanding its global production footprint with five new assembly plants for its GEN6 high-voltage batteries in Debrecen, Shenyang (two locations), Spartanburg, and San Luis Potosi. This expansion aligns with the company’s "Local for Local" production principle, which aims to reduce CO2 emissions by minimizing transportation distances.
The company is also leveraging in-house expertise through its Battery Cell Competence Centre and Cell Manufacturing Competence Centre to support the industrialization and ramp-up of partner cell factories.
Competitive Positioning
BMW continues to differentiate itself through a multi-brand strategy catering to different premium market segments. The presentation highlighted the unique positioning of each brand:
Unlike some competitors who have committed exclusively to electric vehicles, BMW maintains a technologically flexible approach. The company continues to develop highly efficient internal combustion engines, plug-in hybrids, battery electric vehicles, and hydrogen fuel cell technology.
This flexibility extends to BMW’s production network, with all major locations capable of manufacturing different drivetrain types and model variants. The company operates more than 30 production sites across four continents, providing resilience against regional market fluctuations and political uncertainties.
Financial Performance & Outlook
While the presentation focused primarily on future initiatives, BMW’s recent financial performance provides important context. The company reported earnings before tax of €11 billion for 2024, with an EBT margin of 7.7%. The automotive segment EBIT stood at €7.89 billion, representing a margin of 6.3% – below the company’s long-term target of 8-10%.
For 2025, BMW has provided guidance of a slight increase in vehicle deliveries with an automotive EBIT margin of 5-7%. The company targets a return on capital employed of 9-13% and aims to achieve a free cash flow exceeding €5 billion.
Despite current challenges, BMW maintains a strong financial position with a dividend yield of 7.27% and a 33-year track record of consecutive dividend payments. The company’s balance sheet strength remains a key pillar of its long-term strategy, as emphasized in this vision slide:
Forward-Looking Statements
BMW’s presentation portrays a company at an inflection point, with significant investments in future technologies aimed at positioning it favorably in the evolving automotive landscape. The Neue Klasse platform represents the most ambitious element of this strategy, with BMW betting that its technological advancements will deliver competitive advantages in the increasingly crowded electric vehicle market.
However, the company faces several challenges, including ongoing supply chain disruptions, economic uncertainties affecting consumer demand for premium vehicles, and intensifying competition in the electric vehicle segment. The Chinese market, traditionally a strong growth driver for BMW, continues to present challenges that could impact the company’s performance in the near term.
As BMW navigates these headwinds while implementing its ambitious strategic initiatives, investors will be closely watching whether the promised technological advancements translate into improved financial performance and market position in the coming years.
Full presentation:
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