BMW was among the European carmakers hit hardest by tariffs in 2025, and its latest financial results make that impact clear. In its annual report, the company revealed a 6.7% drop in group earnings before interest and tax (EBIT), alongside a 15.9% decline in its automotive EBIT margin, a key measure of operating profitability. While BMW avoided putting a precise figure on the damage, analysis from Automotive News helped fill in the gaps.
€1.4 Billion Lost to Tariffs
Working from BMW’s reported margin decline, Jefferies analyst Philippe Houchois estimated that tariffs cost the company around €1.4 billion in 2025. With BMW posting roughly €10.2 billion in profit for the year, that means more than 10% of its earnings were effectively wiped out by tariff-related costs. The two main pressure sources were US import tariffs and European Union anti-subsidy tariffs. And while there is hope that some trade barriers may ease, US tariffs aren't going away any time soon. Since 2025, US auto tariffs alone have already cost the global industry at least $35.4 billion, underlining just how expensive the current trade environment has become.
Adapting Without Slowing Down
BMW
Despite the financial hit, BMW is not backing off on its long-term strategy. Its massive Spartanburg plant in South Carolina, which produces most of its SUVs, helps shield the company from US-specific tariff risks, to an extent. To meet CO2 emission targets, BMW will continue to produce EVs, such as the recently unveiled BMW i3, while its M division is set to introduce 30 new models by 2029 – many of which are expected to incorporate hybrid technology to comply with emissions rules. BMW is also paying closer attention to shifting consumer trends. BMW has identified renewed demand for station wagons in the US, making this a viable model to add to the Spartanburg plant's offering.
Tariffs Remain A Heavy Hitter
BMW
Looking ahead, tariffs remain a major concern not just for BMW, but for the entire industry. The company expects tariff-related pressure to continue into 2026, warning of a further impact of around 1.25 percentage points on its automotive EBIT margin. Unfortunately, if current policies remain in place, automakers may soon have little choice but to pass these costs on to consumers. As a result, that would push the average new car price beyond the current $50,300.
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