BMW's Two-Speed Reality: Munich Ramps Up the i3 While 8,000 Jobs Head for the Exit
Published on 08/07/2026 at 12:54 | Redaktion boerse-global.de
The Bavarian automaker is living a paradox. On one side of its headquarters, workers are preparing to build the company's most important electric vehicle ever, a model that promises to make EVs cheaper to produce than combustion cars. On the other, thousands of those same workers are being offered money to leave.
That contradiction was on full display this week as BMW launched series production of the all-electric i3 at its Munich plant — the first Neue Klasse model to roll off a German assembly line — while simultaneously executing a restructuring that will eliminate roughly 8,000 positions by the end of 2027. The voluntary severance program, which opens in October, will target Germany disproportionately: of the company's approximately 154,000 global employees, about 85,000 are based in the country, and more than half of the planned cuts will land there. BMW has already secured a works council agreement on the personnel structure program and set aside around €1 billion for workforce measures, with a three-digit million-euro provision planned for 2026.
The Cost of Transformation
The timing is no coincidence. BMW's second-quarter results, released against the backdrop of the i3 launch, laid bare the financial strain driving such aggressive cost discipline. Pre-tax profit fell 35.1 percent year-on-year to €1.697 billion, with the EBT margin compressing to 5.4 percent. For the first half as a whole, pre-tax earnings came in at €4.045 billion, down 29.4 percent, on a margin of 6.5 percent. Net profit shrank to roughly €2.9 billion, a 28.5 percent decline, while revenue slipped to €62.3 billion.
The automotive segment bore the brunt of the damage. Operating profit in the core division collapsed 60 percent in the second quarter to €629 million, dragging the segment margin down to 3.6 percent. Management had already cut its full-year guidance in June, lowering the automotive EBIT margin corridor from 4 to 6 percent down to 1 to 3 percent — a range the latest figures now sit within.
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China: The Elephant in the Showroom
The primary culprit is China, BMW's largest single market and long a reliable profit engine. Second-quarter deliveries there fell 30.2 percent to 117,815 vehicles, with the first-half deficit reaching 20.4 percent. The company is wrestling with price pressure and dealer support payments in the country, where domestic EV makers have eroded the premium segment's pricing power. That weakness ripples outward: global deliveries dropped 4.9 percent in the quarter to 590,962 units.
The pain isn't exclusive to BMW. Mercedes, Porsche, and Volkswagen are all trimming headcount as Chinese demand cools, underscoring a structural shift rather than a company-specific stumble. Still, the contrast with Europe is stark — battery-electric sales there grew 33 percent, and the iX3, the Neue Klasse's first model built in Debrecen, Hungary, has already reached 50,000 units produced, with BMW expecting around 100,000 orders.
A Cheaper Electric Future
The Munich i3 launch carries particular weight because of what it represents for EV economics. Plant manager Peter Weber confirmed that production costs for the i3 run 10 percent below those of a comparable combustion-engine model — a milestone that challenges the long-held assumption that electric vehicles are inherently pricier to build. BMW invested roughly €650 million in the Munich plant conversion, a five-year project that will see the facility produce only EVs from 2027 onward.
Demand has been strong since an early order start in mid-June, prompting BMW to ramp production faster than initially planned. The pre-series run began back in February. Batteries for the i3 come from Irlbach-StraĂźkirchen, while electric motors are sourced from Steyr, Austria. The company plans to introduce 40 new models by the end of 2027.
Market Skepticism Persists
Investors, however, remain unconvinced — or at least unimpressed. The stock closed Thursday at €58.68, down 1.28 percent on the day, extending its year-to-date decline to 37.19 percent. The shares sit just over 4 percent above the 52-week low of €56.40, hit on July 24, suggesting the slide has slowed but not reversed. In a separate session, the shares traded at €59.02, up 0.58 percent, with a year-to-date loss of 36.82 percent — roughly 4.65 percent above that same trough.
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Analysts have responded to the quarterly numbers with cautious recalibration. Bernstein Research trimmed its price target on July 31 from €85 to €82 while maintaining an "Outperform" rating. JPMorgan's Jose M. Asumendi kept an "Overweight" stance with a €82 target but flagged fourth-quarter restructuring charges, weakening pricing power in China, and product mix shifts as key risks. The market's muted reaction to the i3 launch reflects a deeper concern: Chinese competition remains the central uncertainty for the Neue Klasse, regardless of manufacturing breakthroughs.
A Pivotal Autumn
The coming months will test whether BMW can thread the needle. The company has already realized €2.5 billion in cost savings for 2025, and the job cuts are meant to reinforce that trajectory. The Munich plant will begin delivering the i3 to customers this fall, with the M Concept Neue Klasse and Vision BMW ALPINA set for their North American debut at the Monterey Car Week in mid-August. A leadership change also looms: Dorothea von Boxberg takes over as head of human resources on September 1.
On the home market, BMW's July registrations rose 0.5 percent to 24,644 vehicles, with first-half figures up 5.4 percent year-on-year. The company trails Mercedes, which posted 26,624 registrations and an 8.0 percent gain, but leads Audi's 17,432. Those domestic numbers, however, do little to offset the scale of the China problem — or the question of whether a leaner BMW can hold its ground against a wave of aggressive, cost-competitive Chinese rivals. The i3 proves BMW can build EVs more efficiently. Whether it can do so profitably at scale, in a market that no longer rewards the old playbook, is the bet the next two years will settle.
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