BMW earnings: Automaker boosts outlook, invests more in EV as sales grow
BMW now expects 15% of sales in 2023 to be EVs
Following decent results from its German rivals Mercedes and Porsche, BMW is upping the ante with a strong forecast of its own — and seeing more growth in its electric vehicle business.
On Thursday Munich-based BMW reported that it is now planning for “solid growth in deliveries” for 2023, when it previously saw “slight growth,” with automotive segment EBIT margin now in the 9-10.5% range, versus 8-10% previously. Concurrent to that, BMW sees BEV (battery electric vehicle) sales accounting for 15% of total deliveries, up from the 12.6% seen in the first half of the year.
BMW’s electrified sales were powered by EVs like the i4 sedan, iX SUV, i7 full-size luxury sedan, and Mini Cooper SE. BMW says its new i5 electric sedan will help boost EV sales in the second half of the year. In order to keep pace with demand and boost its EV efforts, the automaker has been increasing its capital expenditures.
“[We are] investing more than originally planned in the global ramp-up of e-mobility," BMW CFO Walter Mertl said Thursday. During the second quarter, BMW said R&D spending jumped by 300 million euros to 1.84 billion euros ($2 billion). BMW has a long-range goal of delivering 2 million BEVs globally by the end of 2025, and by 2030 expects half of its sales to be BEVs.
Overall, global deliveries pushed higher as well, despite economic jitters in many of the territories where BMW operates.
“Despite a somewhat subdued global economy, the BMW Group delivered more than 1.2 million vehicles to customers - an increase of 4.7% compared to the previous year,” BMW chairman and CEO Oliver Zipse said in a statement. “BMW remains number one in the global premium segment, with over 20% of the market.”
For the first half of the year, BMW saw revenues hit 74 million euros, a jump of 12.4%. Group EBT (earnings before taxes) totaled 9.35 billion euros, down compared to a year ago, though that was due to one-time effects of a consolidation within the group. BMW had previously released guidance on some parts of business on Tuesday.
BMW rival Mercedes saw its Q2 EBIT jump by 8%, and revenue by 5%, as its top-end vehicles and rising EV sales help power growth. Meanwhile, Porsche reported global sales rose by 14% in the first half of the year, and operating profit rose by 10.7%, with deliveries also up 14.7%.
Whether the German luxury brands like BMW, Mercedes, and Porsche can continue their strong performance in light of higher investments in EVs and higher prices for its luxury consumers is a story the automotive industry and investors will be watching through the back half of the year.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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