Q1 2026 Bayerische Motoren Werke AG Earnings Call

May 6, 2026

Speaker #1: Dear colleagues, ladies and gentlemen, good morning and welcome to the telephone conference of the BMW Group for the first quarter. Today we have here Oliver Zipse, Chairman of the Board of Management, and our CFO, Walter Mertl.

Operator: Colleagues, ladies and gentlemen, good morning and welcome to the Telephone Conference of the BMW Group for Q1. Today we have here Oliver Zipse, Chairman of the Board of Management, and our CFO, Walter Mertl. First, Walter will take you through our financial results. Oliver will then give you a general business update for the BMW Group. After a short break, we will then have time for our Q&A session. Walter, please go ahead.

Speaker #1: First, Walter will take you through our financial results. Oliver will then give you a general business update for the BMW Group. After a short break, we will then have time for our Q&A session.

Speaker #1: Walter, please go ahead.

Speaker #2: Ladies and gentlemen, good morning. The year 2026 started off with sound financial results for the BMW Group, in line with our expectations. In the first quarter, Group revenues totaled €31 billion.

Walter Mertl: Ladies and gentlemen, good morning. The year 2026 started off with sound financial results for the BMW Group in line with our expectations. In Q1, group revenues totaled EUR 31 billion. Group earnings before tax amounted to EUR 2.35 billion, approximately 25% lower than in Q1 2025. With this result, we generated a group EBT margin of 7.6% on the level of the 2025 as well as 2024 full year. The operating profit in the automotive segment was EUR 1.345 billion. The EBIT margin in the automotive segment stood at 5% in the middle of our full year guidance corridor of 4% to 6%. As you know, we consistently focus on our reported figures.

Speaker #2: Group earnings before tax amounted to €2.35 billion, approximately 25% lower than in Q1 2025. With this result, we generated a Group EBIT margin of 7.6%.

Speaker #2: On the level of 2025 as well as the full year 2024, the operating profit in the Automotive segment was €1.345 billion. The EBIT margin in the Automotive segment stood at 5%, in the middle of our full-year guidance corridor of 4 to 6%.

Speaker #2: As you know, we consistently focus on our reported figures. Accordingly, the 5% represents our reported EBIT margin without any adjustments. The Q1 extra tariff burden of 1.25 percentage points is accounted for in this margin.

Walter Mertl: Accordingly, the 5% represents our reported EBIT margin without any adjustments. The Q1 extra tariff burden of 1.25 percentage points is accounted for in this margin. In addition, the EBIT margin includes the depreciation from the BBA purchase price allocation of 1.2 percentage points. Let me now provide more details on the automotive segment's performance across key metrics. In Q1, the BMW Group delivered around 566,000 BMW, Mini, and Rolls-Royce vehicles to customers. This represents a slight decrease of 3.5% compared to the same period last year, driven by the sales decline of all electric vehicles in the US and China. The BMW brand saw a decline of 4.6% year-on-year. This was driven by shifts in regional and powertrain sales.

Speaker #2: In addition, the EBIT margin includes the depreciation from the BVA purchase price allocation of 1.2 percentage points. Let me now provide more details on the Automotive segment's performance across key metrics.

Speaker #2: In the first quarter, the BMW Group delivered around 566,000 BMW, MINI, and Rolls-Royce vehicles to customers. This represents a slight decrease of three and a half percent compared to the same period last year.

Speaker #2: Driven by the sales decline of all-electric vehicles in the US and China, the BMW brand saw a decline of 4.6% year-on-year. This was driven by shifts in regional and powertrain sales.

Speaker #2: The MINI brand continued its growth following the successful renewal of its model portfolio, achieving a solid sales increase of 6%. Let's take a closer look at our sales performance across regions.

Walter Mertl: The Mini brand continued its growth following the successful renewal of its model portfolio, achieving a solid sales increase of 6%. Let's take a closer look at our sales performance across regions. Starting this year, we have slightly adjusted our regional sales reporting to reflect our sales organization structure rather than geographical continents. In our largest sales region, Europe, deliveries increased slightly by 3%. We saw growth across all powertrains, combustion engine vehicles, all-electric vehicles, and plug-in hybrids. The BMW brand's order intake in Europe showed strong growth across the entire product portfolio in Q1, with an order bank reaching well into H2. In our sales region, Asia Pacific, Eastern Europe, Middle East, and Africa, deliveries declined by around 6,700 units or 8.3% year on year.

Speaker #2: Starting this year, we have slightly adjusted our regional sales reporting to reflect our sales organization structure rather than geographical continents. In our largest sales region, Europe, deliveries increased slightly by 3%.

Speaker #2: We saw growth across all powertrains: combustion engine vehicles, all-electric vehicles, and plug-in hybrids. The BMW brand's order intake in Europe showed strong growth across the entire product portfolio in Q1, with an order bank reaching well into the second half of the year.

Speaker #2: In our sales region Asia Pacific, Eastern Europe, Middle East, and Africa, deliveries declined by around 6,700 units, or 8.3%, year on year. This development was influenced by multiple factors, predominantly the macroeconomic environment and the diverse competitive landscape throughout the region.

Walter Mertl: This development was influenced by multiple factors, predominantly the macroeconomic environment and the diverse competitive landscape throughout the region, while the conflict in the Middle East had a limited regional sales impact in Q1. In the Americas region, retail sales decreased by 4% year on year, primarily due to the US. Here, sales of all electric vehicles dropped significantly following the discontinuation of IRA support in Q4 of last year. Our product portfolio enabled us to largely offset this decline and fulfill customer demand with our attractive combustion engine vehicles. When comparing US sales to previous year, we must also remember that Q1 2025, meaning last year, was positively influenced by strong customer demand, driven by expectations of custom duty increases starting in April 2025.

Walter Mertl: This development was influenced by multiple factors, predominantly the macroeconomic environment and the diverse competitive landscape throughout the region, while the conflict in the Middle East had a limited regional sales impact in Q1. In the Americas region, retail sales decreased by 4% year-on-year, primarily due to the US. Here, sales of all electric vehicles dropped significantly following the discontinuation of IRA support in Q4 of last year. Our product portfolio enabled us to largely offset this decline and fulfill customer demand with our attractive combustion engine vehicles. When comparing US sales to previous year, we must also remember that Q1 2025, meaning last year, was positively influenced by strong customer demand, driven by expectations of custom duty increases starting in April 2025.

Speaker #2: While the conflict in the Middle East had a limited regional sales impact in Q1, in the Americas region, retail sales decreased by 4% year-on-year, primarily due to the US.

Speaker #2: Here, sales of all electric vehicles dropped significantly following the discontinuation of Aero Support and the fourth quarter of last year. Our product portfolio enabled us to largely offset this decline and fulfill customer demand with our attractive combustion engine vehicles.

Speaker #2: When comparing US sales to the previous year, we must also remember that Q1 2025—meaning last year—was positively influenced by strong customer demand, driven by expectations of customs duty increases starting in April 2025.

Speaker #2: Overall, we performed better than the total U.S. market, which declined by quarter. In China, the overall market declined sharply by over 17% in Q1.

Walter Mertl: Overall, we performed better than the total US market, which declined by 6.6% in Q1. In China, the overall market declined sharply by over 17% in Q1, driven by reductions of government subsidies and changes of regulations. By comparison, BMW Group sales decreased by 10% and therefore outperformed the overall market in Q1. Switching gears to BEV retail sales. In the first three months, the BMW Group delivered over 87,000 all-electric vehicles to customers worldwide. Sales of electrified vehicles, including both BEVs and plug-in hybrids, amounted to approximately 133,000 vehicles. This represents a BEV share of total sales of 15.5% and an electrified vehicle share of 23.4%.

Speaker #2: Driven by reductions of government subsidies and changes of regulations. By comparison, BMW Group sales decreased by 10%, and therefore outperformed the overall market in Q1.

Speaker #2: Switching gears to BEV retail sales. In the first three months, the BMW Group delivered over 87,000 all-electric vehicles to customers worldwide. Sales of electrified vehicles, including both BEVs and plug-in hybrids, amounted to approximately 133,000 vehicles.

Speaker #2: This represents a BEV share of total sales of 15.5% and an electrified vehicle share of 23.4%. In Europe, BEV sales continued to grow and order intake increased by more than 60% year on year, especially due to strong demand for our all-new iX3 and the iX1.

Walter Mertl: In Europe, BEV sales continued to grow and order intake increased by more than 60% year on year, especially due to strong demand for our all-new iX3 and the iX1. In China and the US, the removal of incentives and the reduction of subsidies for electrified vehicles had a noticeable impact on BEV sales year on year, reflecting the country-specific market dynamics. Automotive segment revenues declined moderately by 7% to EUR 27.2 billion in Q1. Adjusted for currency translation, mainly from the US dollar and the Chinese renminbi, the decrease was 2.9%. It was driven by lower sales volumes and intense global competition. Let's now take a closer look at the year-on-year changes in the operational results on the following slide.

Walter Mertl: In Europe, BEV sales continued to grow and order intake increased by more than 60% year-on-year, especially due to strong demand for our all-new iX3 and the iX1. In China and the US, the removal of incentives and the reduction of subsidies for electrified vehicles had a noticeable impact on BEV sales year-on-year, reflecting the country-specific market dynamics. Automotive segment revenues declined moderately by 7% to EUR 27.2 billion in Q1. Adjusted for currency translation, mainly from the US dollar and the Chinese renminbi, the decrease was 2.9%. It was driven by lower sales volumes and intense global competition. Let's now take a closer look at the year-on-year changes in the operational results on the following slide.

Speaker #2: In China and the US, the removal of incentives and the reduction of subsidies for electrified vehicles had a noticeable impact on BEV sales year on year, reflecting the country-specific market dynamics.

Speaker #2: Automotive segment revenues declined moderately by 7% to €27.2 billion in the first quarter. Adjusted for currency translation, mainly from the US dollar and the Chinese renminbi, the decrease was 2.9%.

Speaker #2: It was driven by lower sales volumes and intense global competition. Let's now take a closer look at the year-on-year changes in the operational result on the following slide.

Speaker #2: In the first three months, changes in currency and raw material positions accounted for a negative impact of around €400 million. As anticipated, the adverse FX development from the second half of 2025 continued into the first quarter of 2026.

Walter Mertl: In the first three months, changes in currency and raw material positions accounted for a negative impact of around EUR -400 million. As anticipated, the adverse FX development from H2 2025 continued into Q1 2026. The net effect of volume, model mix, and pricing resulted in a negative impact of around EUR -700 million compared to Q1 2025. In addition to the impact from lower sales volumes, this decline was driven by intense competitive pressure across all major markets. Ladies and gentlemen, we are continuing cost reductions across the company to tackle the overall headwinds. In Q1 2026, we have further reduced both R&D and capital expenditure, thanks to early investments in the Neue Klasse.

Walter Mertl: In the first three months, changes in currency and raw material positions accounted for a negative impact of around -EUR 400 million. As anticipated, the adverse FX development from H2 2025 continued into Q1 2026. The net effect of volume, model mix, and pricing resulted in a negative impact of around EUR -700 million compared to Q1 2025. In addition to the impact from lower sales volumes, this decline was driven by intense competitive pressure across all major markets. Ladies and gentlemen, we are continuing cost reductions across the company to tackle the overall headwinds. In Q1 2026, we have further reduced both R&D and capital expenditure, thanks to early investments in the Neue Klasse.

Speaker #2: The net effect of volume, model mix, and pricing resulted in a negative impact of around €700 million compared to Q1 2025. In addition to the impact from lower sales volumes, this decline was driven by intense competitive pressure across all major markets.

Speaker #2: Ladies and gentlemen, we are continuing cost reductions across the company to tackle the overall headwinds. In the first quarter of 2026, we have further reduced both R&D and capital expenditure.

Speaker #2: Thanks to early investments in the Neue Klasse. As of March, Group R&D expenditure totaled around €1.8 billion, a significant decrease of around 12% compared to the previous year.

Walter Mertl: As of March, group R&D expenditure totaled around EUR 1.8 billion, a significant decrease of around 12% compared to the previous year. The R&D ratio, according to the German Commercial Code, came in at 5.7%. Despite this significant reduction, research and development expenses in the P&L under IFRS increased by EUR 100 million due to two factors included: an increase of EUR 200 million in depreciation resulting from capitalized development costs in prior years, and a lower R&D capitalization ratio compared to Q1 2025, which decreased by 4.3 percentage points to 31.4%.

Speaker #2: The R&D ratio according to the German Commercial Code came in at 5.7%. Despite this significant reduction, research and development expenses in the P&L under IFRS increased by €100 million due to two factors included.

Speaker #2: An increase of €200 million in depreciation resulting from capitalized development costs in prior years, and a lower R&D capitalization ratio compared to Q1 2025, which decreased by 4.3 percentage points to 31.4%.

Speaker #2: Our ongoing commitment to reducing operating costs is further visible by the development of selling and administrative expenses, which decreased by around €100 million year on year.

Walter Mertl: Our ongoing commitment to reducing operating costs is further visible by the development of selling and administrative expenses, which decreased by around EUR 100 million year on year. Other cost changes provided a tailwind of around EUR 400 million compared to Q1 2025. This includes various factors, most notably manufacturing costs and warranty expenses, as well as a year-on-year tariff burden. Overall, Automotive EBIT amounted to EUR 1.3 billion in Q1. The decline of approximately EUR 700 million compared to Q1 2025 was driven by headwinds from FX, tariffs, and depreciation. Coming to free cash flow in the Automotive segment, which amounted to around EUR 800 million in Q1 2026. The net change in working capital reduced free cash flow by around EUR 500 million as expected.

Speaker #2: Other cost changes provided a tailwind of around €400 million compared to the first quarter of 2025. This includes various factors, most notably manufacturing costs and warranty expenses, as well as a year-on-year tariff burden.

Speaker #2: Overall, automotive EBIT amounted to €1.3 billion in the first quarter, a decline of approximately €700 million compared to Q1 2025, which was driven by headwinds from FX, tariffs, and depreciation.

Speaker #2: Coming to free cash flow in the automotive segment, which amounted to around €800 million in the first quarter of 2026. When net change in working capital reduced free cash flow by around €500 million, as expected, this mainly reflects the typical Q1 inventory buildup, with production exceeding sales volume.

Walter Mertl: This mainly reflects the typical Q1 inventory buildup, with production exceeding sales volume. The impact of higher inventories was partly compensated by an increase in trade payables, which rose in line with production levels. The net effect of capital expenditure and depreciation contributed about EUR 600 million to free cash flow. Depreciation exceeded capital expenditure in Q1, positively impacting free cash flow. We expected this position to flip versus previous years as we continue to reduce CapEx and see depreciation from earlier investments take effect. This trend will continue throughout 2026. The CapEx ratio for Q1 was super low percent, reflecting the typical low level seen in Q1 of the year. The change in provisions reduced free cash flow in Q1 by EUR 300 million, primarily due to the consumption of warranty provisions.

Speaker #2: The impact of higher inventories was partly compensated by an increase in trade payables, which rose in line with production levels. The net effect of capital expenditure and depreciation contributed about €600 million to free cash flow. Depreciation exceeded capital expenditure in the first quarter, positively impacting free cash flow.

Speaker #2: The expected disposition to flip versus previous years, as we continue to reduce CapEx and see depreciation from earlier investments take effect. This trend will continue throughout 2026.

Speaker #2: The CapEx ratio for Q1 was 2.0%, reflecting the typical low level seen in the first quarter of the year. The change in provisions reduced free cash flow in the first quarter by €300 million, primarily due to the consumption of warranty provisions.

Speaker #2: A change in the position other reduced free cash flow by €300 million, mainly due to regular tax payments. For the full year, the BMW Group is targeting a free cash flow in the automotive segment above €4.5 billion.

Walter Mertl: A change in the position, other, reduced free cash flow by EUR 300 million, mainly due to regular tax payments. For the full year, the BMW Group is targeting a free cash flow in the Automotive segment above EUR 4.5 billion. Ladies and gentlemen, the BMW Group remains firmly committed to its shareholder return strategy, which includes both dividend payments and share buybacks. The second tranche of our third share buyback program, with a volume of EUR 625 million, is currently underway and is scheduled for completion by the end of August at the latest. The third tranche is planned to follow thereafter. Let's now turn to our Financial Services segment. In Q1, the number of new contracts concluded with retail customers increased slightly by 4.3% year-on-year, reaching 420,000 contracts.

Speaker #2: Ladies and gentlemen, the BMW Group remains firmly committed to its shareholder return strategy, which includes both dividend payments and share buybacks. The second tranche of our third share buyback program, with a volume of €625 million, is currently underway and is scheduled for completion by the end of August at the latest.

Speaker #2: The third tranche is planned to follow thereafter. Let's now turn to our Financial Services segment. In the first quarter, the number of new contracts concluded with retail customers increased slightly by 4.3% year on year, reaching 420,000 contracts.

Speaker #2: The penetration rate for lease and loan offerings increased to 51.6% in the first quarter. This development was supported by changes in the competitive environment in China. In mid-2025, local banks significantly reduced commissions related to brokering financing and insurance products for end customers.

Walter Mertl: The penetration rate for lease and loan offerings increased to 51.6% in Q1. This development was supported by changes in the competitive environment in China. Mid-2025, local banks significantly reduced commissions related to brokering, financing, and insurance products for end customers. Adjusted for FX effects, new business volume improved by 4.1% to about EUR 16 billion. Segment earnings for Q1 amounted to EUR 381 million, a decrease of EUR 269 million compared to Q1 2025. This decline results from an addition to an already existing risk provision in the UK. At the end of March, the Financial Conduct Authority, FCA, issued its final cross-sector compensation program for customers who were sold automotive financing products under certain commission models since 2007.

Speaker #2: Adjusted for FX effects, new business volume grew by 4.1% to about €16 billion. Segment earnings for the first quarter amounted to €381 million, a decrease of €269 million compared to Q1 2025.

Speaker #2: This decline results from an addition to an already existing risk provision in the UK. At the end of March, the Financial Conduct Authority, FCA, issued its final cross-sector compensation program for customers who were sold automotive financing products under certain commission models.

Speaker #2: Since 2007, unfortunately, the published program reflects only a few of the many amendment proposals made to the initial draft by both the UK Finance and Leasing Association and the BMW Group.

Walter Mertl: Unfortunately, the published program reflects only a few of the many amendment proposals made to the initial draft by both the Finance & Leasing Association and the BMW Group. As a result, the compensation payment volume will likely exceed previous estimations. Additionally, income from the resale of end-of-lease vehicles was lower year on year as expected. The credit loss ratio across the entire credit portfolio remained low at 0.27%. In the Motorcycle segment, Q1 deliveries declined slightly by 4.2% year on year. The segment EBIT for Q1 rose to EUR 89 million, with an EBIT margin of 11.4%. Finally, one remark on the other entities result, which increased by around EUR 300 million.

Speaker #2: As a result, the compensation payment volume will likely exceed previous estimations. Additionally, income from the resale of end-of-lease vehicles was lower year on year, as expected.

Speaker #2: The credit loss ratio across the entire credit portfolio remained low, at 0.27%. In the motorcycle segment, first quarter deliveries declined slightly by 4.2% year on year.

Speaker #2: The segment EBIT for the first three months rose to €89 million, with an EBIT margin of 11.4%. Finally, one remark on the other entities' result, which increased by around €300 million.

Speaker #2: This was driven by a positive valuation effect from interest rate derivatives, resulting from the sharp rise in long-term interest rates in March. Ladies and gentlemen, let me now turn to our outlook for 2026 and briefly outline some of our current assumptions.

Walter Mertl: This was driven by positive valuation effects from interest rate derivatives, resulting from the sharp rise in long-term interest rates in March. Ladies and gentlemen, let me now turn to our outlook for 2026 and briefly outline some of our current assumptions. The situation in the Middle East currently remains highly uncertain. Our outlook assumes that the ongoing conflict is temporary. The expected tariff impact on our 2026 results can still only be estimated based on our existing assumptions. We expect import duties from the EU to the US to remain at their current levels.

Speaker #2: The situation in the Middle East currently remains highly uncertain. Our outlook assumes that the ongoing conflict is temporary. The expected tariff impact on our 2026 results can still only be estimated based on our existing assumptions.

Speaker #2: We expect import duties from the EU to the US to remain at their current levels. Following the recent positive vote in the European Parliament, we anticipate that tariffs on imports from the US to the EU will drop to 0% effective in the second half of the year.

Walter Mertl: Following the recent positive vote in the European Parliament, we anticipate that tariffs on imports from the US to the EU will drop to 0% effective in H2 of the year. Similarly, tariff reductions for imports into the US from Mexico and Canada are also expected to take effect in H2 of the year. We continue to anticipate a full year negative impact of around 1 and a quarter percentage points on the auto EBIT margin from the increased tariffs instead of 1 and a half percentage points in 2025. In China, we are making good progress with our set of measures to support market performance. The overall vehicle market in China declined more sharply than anticipated throughout Q1, already prompting several revisions of official market forecasts for the year by the CPCA.

Speaker #2: Similarly, tariff reductions for imports into the U.S. from Mexico and Canada are also expected to take effect in the second half of the year.

Speaker #2: We continue to anticipate a full-year negative impact of around 1.25 percentage points on the auto EBIT margin from the increased tariffs, instead of 1.5 percentage points in 2025.

Speaker #2: In China, we are making good progress with our set of measures to support market performance. The overall vehicle market in China declined more sharply than anticipated throughout the first quarter, already prompting several revisions of official market forecasts for the year by the CPCA.

Speaker #2: In light of this trend, our focus will remain on achieving the right balance between sales volume, transaction prices, and dealer profitability. Based on our assumptions, our full-year guidance parameters remain unchanged.

Walter Mertl: In light of this trend, our focus will remain on achieving the right balance between sales volume, transaction prices, and dealer profitability. Based on our assumptions, our full year guidance parameters remain unchanged. Group earnings before tax are expected to be moderately lower than in 2025. In the Automotive segment, we forecast global deliveries to be at last year's level. The Automotive EBIT margin is expected to be within a corridor between 4% and 6%. The EBIT margin in the Motorcycle segment should also come in at between 4% and 6%. In the Financial Services segment, we are targeting a return on equity in the range of 13% to 16% for the full year. Ladies and gentlemen, the year 2026 started off with sound financials for the BMW Group, with an Auto EBIT margin in the middle of our full year guidance corridor.

Speaker #2: Group earnings before tax are expected to be moderately lower than in 2025. In the automotive segment, we forecast global deliveries to be at last year's level.

Speaker #2: The automotive EBIT margin is expected to be within a corridor between 4% and 6%. The EBIT margin in the motorcycle segment should also come in at between 4% and 6%.

Speaker #2: In the financial services segment, we are targeting a return on equity in the range of 13% to 16% for the full year. Ladies and gentlemen, the year 2026 started off with sound financials for the BMW Group, with an auto EBIT margin in the middle of our full-year guidance corridor.

Speaker #2: Within our global business model, we continue to leverage flexibility across powertrains and regions. As we ramp up our Neue Klasse, this flexibility enables us to effectively mitigate risks as they arise.

Walter Mertl: Within our global business model, we continue to leverage flexibility across powertrains and regions as we ramp up our Neue Klasse. This flexibility enables us to effectively mitigate risks as they arise. The prudent management of R&D, CapEx, and operating costs is clearly reflected in our Q1 results, underscoring our strong commitment to financial discipline. With that, the BMW Group remains on track to meet its operational targets as we advance our strategic plan. As we roll out the Neue Klasse technologies across the entire portfolio, we at BMW Group and all of our stakeholders have plenty to look forward to. Many thanks.

Speaker #2: The prudent management of R&D, CapEx, and operating costs is clearly reflected in our Q1 results, underscoring our strong commitment to financial discipline. With that, the BMW Group remains on track to meet its operational targets as we advance our strategic plan.

Speaker #2: And as we roll out the Neue Klasse technologies across the entire portfolio, we at BMW Group and all of our stakeholders have plenty to look forward to.

Speaker #2: Many thanks. Thank you very much, Walter. Now, over to Oliver Zipse. Oliver, please go ahead.

Operator: Thank you very much, Walter. Now over to Oliver Zipse. Oliver, please go ahead.

Speaker #3: Good morning, ladies and gentlemen. Before I talk about the quarter figures, I would like to address a tragic loss that has deeply touched many BMW fans around the world.

Oliver Zipse: Good morning, ladies and gentlemen. Before I'm talking about the quarter figures, I would like to address a tragic loss that has deeply touched many BMW fans around the world. On 1 May, Race Driver, longtime BMW Works Driver, and Company Ambassador Alessandro Zanardi passed away unexpectedly. Alex, as everyone called him, was an impressive personality, an unwavering optimist, and an inspiration to many people worldwide. He demonstrated what is possible in life with dedication, willpower, and ambition. The BMW Group has lost a fascinating humanitarian representative, and BMW M Motorsport has lost an ambitious and successful Works Driver. Ladies and gentlemen, Walter Mertl has taken you through the results after the first 3 months of 2026. As we outlined in March at our annual conference, we knew that there would be several headwinds we would face throughout this year.

Speaker #3: On May 1st, race driver, long-time BMW works driver, and company ambassador Alessandro Zanardi passed away unexpectedly. Alex, as everyone called him, was an impressive personality, an unwavering optimist, and an inspiration to many people worldwide.

Speaker #3: He demonstrated what is possible in life with dedication, willpower, and ambition. The BMW Group has lost a fascinating humanitarian representative, and BMW M Motorsport has lost an ambitious and successful works driver.

Speaker #3: Ladies and gentlemen, Walter Mertl has taken you through the results after the first three months of 2026. As we outlined in March at our annual conference, we knew that there would be several headwinds we would face throughout this year.

Speaker #3: For us, it is about minimizing their impact, while consistently leveraging opportunities that arise. At the same time, we remain firmly on course with our long-term strategy—a strategy that has provided clear direction and enabled us to navigate an increasingly unpredictable global business environment over recent years.

Oliver Zipse: For us, it is about minimizing their impact while consistently leveraging opportunities that arise. At the same time, we remain firmly on course with our long-term strategy, a strategy that has provided clear direction and enabled us to navigate an increasingly unpredictable global business environment over recent years. Three characteristics in particular define the BMW way. First, our strategy of technological neutrality. Second, the BMW Group's global footprint. Third, inspiring brands and fascinating products. Since 2021, the BMW Group's long-term product and technology orientation has focused on the Neue Klasse. Building on an exceptionally strong foundation of products and successful technologies delivered to customers over many years through to today, we're now making a huge leap forward in nearly every area of technology with the Neue Klasse. This will pay off as we roll these technologies out rapidly across the whole product portfolio.

Speaker #3: Three characteristics in particular define the BMW way. First, our strategy of technological neutrality; second, the BMW Group's global footprint; and third, inspiring brands and fascinating products.

Speaker #3: Since 2021, the BMW Group's long-term product and technology orientation has focused on the Neue Klasse. Building on an exceptionally strong foundation of products and successful technologies, delivered to customers over many years through to today, we are now making a huge leap forward in nearly every area of technology with the Neue Klasse.

Speaker #3: This will pay off as we roll these technologies out rapidly across the whole product portfolio. If you remember, last year in September, here in Munich at the IAA Mobility, we presented the BMW iX3, the first vehicle of the Neue Klasse.

Oliver Zipse: If you remember last year, end of September, here in Munich at the IAA Mobility, we represented the BMW iX3, the first vehicle of the Neue Klasse. With this all-new vehicle generation, BMW is now entering into a new era. The launch of the iX3 has been extremely successful. Just a few weeks ago, in March, we handed over the first BMW iX3 vehicles to customers across Europe. Over the past weeks, the model has also reached showrooms throughout the region. Pre-orders in Europe now exceed 50,000 units, underscoring the strong interest in this vehicle. The iX3 also continues to win notable major international awards. Most recently, it won two awards as at the renowned World Car Awards.

Speaker #3: With this all-new vehicle generation, BMW is now entering into a new era. The launch of the iX3 has been extremely successful. Just a few weeks ago, in March, we handed over the first BMW iX3 vehicles to customers across Europe.

Speaker #3: Over the past weeks, the model has also reached showrooms throughout the region. Pre-orders in Europe now exceed 50,000 units, underscoring the strong interest in this vehicle.

Speaker #3: The iX3 also continues to win notable major international awards. Most recently, it won two awards at the renowned World Car Awards. An international jury of 98 automotive journalists presented the BMW iX3 with two prestigious titles: the 2026 World Car of the Year, beating out competitors across all powertrain categories, as well as the 2026 World Electric Vehicle of the Year accolade.

Oliver Zipse: An international jury of 98 automotive journalists presented the BMW iX3 two prestigious titles: the 2026 World Car of the Year, beating out competitors across all powertrain categories, as well as 2026 World Electric Vehicle of the Year accolade. With the first Neue Klasse model, BMW has delivered a clear step forward in technology and design, one that is resonating strongly with experts, journalists, and customers alike. Now, given the very high market demand, we already pulled forward the second shift of BMW iX3 production at our Debrecen plant in February, and further rollout across the US and Asian markets is planned for the coming months. The iX3 was just the beginning. A lot has happened since our annual conference. The Neue Klasse is gradually making its mark across the entire BMW portfolio.

Speaker #3: With the first Neue Klasse model, BMW has delivered a clear step forward in technology and design—one that is resonating strongly with experts, journalists, and customers alike.

Speaker #3: Now, given the very high market demand, we already pulled forward the second shift of BMW iX3 production at our Debrecen plant in February.

Speaker #3: And further rollout across the US and Asian markets is planned for the coming months. And the iX3 was just the beginning. A lot has happened since our annual conference.

Speaker #3: The Neue Klasse is gradually making its mark across the entire BMW portfolio. In March, we unveiled the next step with a world premiere of the new BMW i3 at BMW Park here in Munich.

Oliver Zipse: In March, we unveiled the next step with the world premiere of the new BMW i3 at BMW Park here in Munich. Since 1975, the 3 Series has inspired dreams. At the core of the brand, each of the 8 generations embodies progress and innovation. With the BMW i3, we are building our future on this rich legacy. This event provided a unique opportunity to celebrate this milestone, not only with media and other key stakeholders, but especially, and perhaps most importantly, with our associates. More than 30,000 employees joined the celebrations over days, underscoring the strong bond our team feels with the brand and their pride in this incredible moment, both for the company and for their achievements in bringing this vehicle to life. As the second model of the Neue Klasse, the BMW i3 perfectly symbolizes the journey BMW has taken over the last years.

Speaker #3: Since 1975, the 3 Series has inspired dreams. At the core of the brand, each of the eight generations embodies progress and innovation. And with the BMW i3, we are building our future on this rich legacy.

Speaker #3: This event provided a unique opportunity to celebrate this milestone not only with media and other key stakeholders, but especially, and perhaps most importantly, with our associates.

Speaker #3: More than 30,000 employees joined the celebrations over several days, underscoring the strong bond our team feels with the brand and their pride in this incredible moment.

Speaker #3: Both for the company and for the achievements in bringing this vehicle to life. As the second model of the Neue Klasse, the BMW i3 perfectly symbolizes the journey BMW has taken over the last years.

Speaker #3: It is, of course, a completely new vehicle with a reimagined design and seamless integration of advanced technologies. And at the same time, the BMW i3 represents the progress of the BMW Group itself, from the systematic modernization of our production facilities through new ways of working that enable efficiency, scalability, and our long-term competitiveness.

Oliver Zipse: It is, of course, a completely new vehicle with a reimagined design and seamless integration of advanced technologies. At the same time, the BMW i3 represents the progress of the BMW Group itself. From the systematic modernization of our production facilities through new ways of working that enable efficiency, scalability, and our long-term competitiveness. The i3 will be produced at our main plant in Munich with an investment of around EUR 650 million. The facility has been completely remodeled following the principles of BMW iFACTORY: lean, green, and digital. Production of up to 1,000 vehicles a day continued uninterrupted during the shop floor adaptations over many months. Now, beginning in 2027, the plant will exclusively produce electric vehicles. The plant also continues to make great progress in realizing cost efficiencies.

Speaker #3: The i3 will be produced at our main plant in Munich. With an investment of around €650 million, the facility has been completely remodeled following the principles of BMW iFactory: lean, green, and digital.

Speaker #3: Production of up to 1,000 vehicles a day continued uninterrupted during the shop floor adaptations over many months. And now, beginning in 2027, the plant will exclusively produce electric vehicles.

Speaker #3: The plant also continues to make great progress in realizing cost efficiencies. When the i3 rolls off the line for customers, we will have reduced overall production costs at the Munich plant by an additional 10%.

Oliver Zipse: When the BMW i3 rolls off the line for customers, we will have reduced overall production costs at the Munich plant by an additional 10%. These improvements are driven by optimized production processes, targeted automation and digitalization, as well as the vehicle design improvements enabled by Neue Klasse technologies. Series production of the BMW i3 begins in August, followed by the market launch in Europe a few weeks later. Several additional Neue Klasse models will soon be manufactured in Munich, including the all-new BMW i3 Touring. The BMW i3 leverages all the technologies developed for the Neue Klasse, from driving dynamics to powertrain, from battery technology to operating concept, and of course, the digital user experience. You can choose between different drive variants because, as you know, we remain technology-open.

Speaker #3: These improvements are driven by optimized production processes, targeted automation, and vehicle design improvements enabled by Neue Klasse technologies. Series production of the BMW i3 begins in August, followed by the market launch in Europe a few weeks later.

Speaker #3: Several additional Neue Klasse models will soon be manufactured in Munich, including the all-new BMW i3 Touring. The BMW i3 leverages all the technologies developed for the Neue Klasse.

Speaker #3: From driving dynamics to powertrain, from battery technology to operative concept, and, of course, the digital user experience. And you can choose between different drive variants.

Speaker #3: Because, as you know, we remain technology-open. Each element is perfectly attuned to the characteristics of the 3 Series, creating a whole new dimension of sheer driving pleasure.

Oliver Zipse: Each element is perfectly attuned to the characteristics of the 3 Series, creating a whole new dimension of sheer driving pleasure. This is also confirmed by initial reviews and feedback from customers and journalists, which have been exclusively very positive. This was also evident just 2 weeks ago at Auto China in Beijing, the world's largest automotive trade fair. We presented not 1, not 2, but 3 new models. The BMW iX3 and the BMW i3 Long-Wheelbase for the Chinese markets, as well as the world premiere of the BMW 7 Series model update with Neue Klasse technologies and design elements. The China-specific Neue Klasse vehicles have been developed in close collaboration with our local R&D teams and local partners in China. Think global, act locally.

Speaker #3: This is also confirmed by initial reviews and feedback from customers and journalists, which have been exclusively very positive. This was also evident just two weeks ago at Auto China in Beijing, the world's largest automotive trade fair.

Speaker #3: We presented not one, not two, but three new models: the BMW iX3 and the BMW i3 long-wheelbase for the Chinese markets, as well as the world premiere of the BMW 7 Series model update, with Neue Klasse technologies and design elements.

Speaker #3: The China-specific Neue Klasse vehicles have been developed in close collaboration with our local R&D teams and local partners in China. Think global, but act locally.

Speaker #3: This enables us to leverage the know-how of leading Chinese tech players and integrate local digital ecosystems and technologies to meet the specific needs of our Chinese customers.

Oliver Zipse: This enables us to leverage the know-how of leading Chinese tech players and integrate local digital ecosystems and technologies to meet the specific needs of our Chinese customer needs. For example, in voice assistant features and automated driving solutions. This momentum generated by the Neue Klasse in China will provide a powerful impulse for our portfolio and marks the beginning of the next chapter in BMW's tailored innovation and technology leadership in this key market. In 2027, the 7 millionth BMW vehicle will roll off these lines at our Shenyang production base. This remarkable milestone underscores our long-term commitment to China, and we are constantly strengthening our local footprint to underpin this momentum. Through deeper localization across the value chain and expanded China-based decision-making, we are faster, more robust, and even more synchronized with local customer expectations and market dynamics.

Speaker #3: For example, in voice assistant features and automated driving solutions. This momentum generated by the Neue Klasse in China will provide a powerful impact for our portfolio and marks the beginning of the next chapter in BMW's tailored innovation and technology leadership in this key market.

Speaker #3: In 2027, the seven millionth BMW vehicle will roll off these lines at our Shenyang production base. This remarkable milestone underscores our long-term commitment to China, and we are constantly strengthening our local footprint to underpin this momentum.

Speaker #3: Through deeper localization across the value chain, and expanded China-based decision-making, we are faster, more robust, and even more synchronized with local customer expectations and market dynamics.

Speaker #3: The new BMW 7 Series we unveiled in Beijing will kick off the rollout of Neue Klasse technologies across all powertrains and into other product lines and segments.

Oliver Zipse: The new BMW 7 Series we unveiled in Beijing will kick off the rollout of Neue Klasse technologies across all powertrains and into other product lines and segments. Coming in the middle of its life cycle, it is the most extensive model revision in BMW's history and will take the 7 Series to a whole new level. The technology open driver drive offer covers all customer needs. The updated BMW i7 with new round battery cells features up to over 700 km of range according to the WLTP cycle, meaning an increase of 100 km from the current version. Start of production will begin in our plant at Dingolfing in July. The new 7 Series exemplifies BMW's ability to industrialize the latest technologies at speed, integrating them into series vehicles and making them available directly to our customers.

Speaker #3: Coming in the middle of its life cycle, it is the most extensive model revision in BMW's history and will take the 7 Series to a whole new level.

Speaker #3: The technology Open Drive offer—sorry, technology Open Drive offer—covers all customer needs. The updated BMW i7 with new round battery cells features up to over 700 kilometers of range according to the WLTP cycle.

Speaker #3: Meaning an increase of 100 kilometers from the current version. Start of production will begin in our plant at Dingolfing in July. The new 7 Series exemplifies BMW's ability to industrialize the latest technologies at speed, integrating them into serious vehicles and making them available directly to our customers.

Speaker #3: This summer, we will also unveil the next generation of our BMW X5. It will be the first BMW model to be offered with five different drivetrain variants.

Oliver Zipse: This summer, we will also unveil the next generation of our BMW X5. It will be the first BMW model to be offered with 5 different drivetrain variants, highly efficient conventional powertrains, plug-in hybrids, battery electric, and from 2028 on, also hydrogen. In this way, we are laying the foundation to successfully meet the diverse needs of our customers around the world, both today and in the future. Ladies and gentlemen, our products continue to enjoy strong demand globally. We are well-positioned to meet the needs of customers across different regions and markets. In Q1, we leveraged the strengths of our current portfolio in a shifting environment, supported by a brand offering across brands, segments, drivetrain technologies, and geographies. Consistent with our balanced global approach to sales, the performance in Europe helped to partially offset weaker dynamics in other markets.

Speaker #3: Highly efficient conventional powertrains, plug-in hybrids, battery electric, and, from 2028 on, also hydrogen. In this way, we are laying the foundation to successfully meet the diverse needs of our customers around the world, both today and in the future.

Speaker #3: Ladies and gentlemen, our products continue to enjoy strong demand globally. We are well positioned to meet the needs of customers across different regions and markets.

Speaker #3: In the first quarter, we leveraged the strengths of our current portfolio in a shifting environment, supported by a brand offering across brands, segments, drivetrain technologies, and geographies.

Speaker #3: And consistent with our balanced global approach to sales, the performance in Europe helped to partially offset weaker dynamics in other markets. Sales were particularly robust in Germany, where group registrations increased by more year-on-year.

Oliver Zipse: Sales were particularly robust in Germany, where Group re-registrations increased by more than 10% year on year. In China and the United States, the BMW Group performed better than the overall declining markets. Therefore, orders in our view were up by around 62%, with European sales of fully electric vehicles exceeding the previous year's very high level. For the 5th consecutive quarter, the MINI brand delivered global growth, with sales increasing by 6%. As we roll out the Neue Klasse, we can look ahead with confidence. Its technologies and design language will provide fresh momentum into our already strong BMW products, offering individual mobility solutions tailored to the needs of customers across markets worldwide. At the same time, the company is prepared to weather differing dynamics in the global markets and to seize opportunities at the same time.

Speaker #3: In China and the United States, the BMW Group performed better than the overall declining markets. Therefore, orders in our Europe were up by around 62%, with European sales of fully electric vehicles exceeding the previous year's very high level.

Speaker #3: And for the fifth consecutive quarter, the MINI brand delivered global growth, with sales increasing by 6%. As we roll out the Neue Klasse, we can look ahead.

Speaker #3: With confidence, its technologies and design language will provide fresh momentum to our already strong BMW products, offering individual mobility solutions tailored to the needs of customers across markets worldwide.

Speaker #3: At the same time, the company is prepared to weather differing dynamics in the global markets and to seize opportunities at the same time.

Speaker #3: That combination is what sets the BMW Group apart. We have stayed on course, consistently implementing our long-term strategy and are now ideally positioned to reap the rewards.

Oliver Zipse: That combination is what sets the BMW Group apart. We have stayed on course, consistently implementing our long-term strategy and are now ideally positioned to reap the rewards. This is very much part of our DNA. Time and again, the BMW Group has proven resilient from the pandemic through supply chain interruptions and semiconductor shortages and the energy crisis. Throughout, we have remained true to our technology-open approach, which has proven its strength as global automotive markets continue to transition and delivered stronger results in new technologies. As this will be my final quarter call as CEO of the BMW Group, I want to extend my sincere thanks to the media and capital market communities who have accompanied me throughout my tenure since 2000. You have brought to these exchanges. I hope you will extend the same openness and warm welcome to my successor, Milan Nedeljković.

Speaker #3: This is very much part of our DNA. Time and again, the BMW Group has proven resilient—from the pandemic, through supply chain interruptions, and semiconductor shortages, to the energy crisis.

Speaker #3: Throughout, we have remained true to our technology open approach, which has proven its strengths as global automotive markets continue to transition and deliver stronger results in new technologies.

Speaker #3: As this will be my final quarter call as CEO of the BMW Group, I want to extend my sincere thanks to the media and capital market communities who have accompanied me throughout my 10 years. Since Q2, you have brought to these exchanges.

Speaker #3: I hope you will extend the same openness and warm welcome to my successor, Milan Nedeljković. I wish you all the best and look forward to answering your questions one last time.

Oliver Zipse: I wish you all the best and look forward to answering your questions one last time. Thank you. Thank you very much, Oliver. Ladies and gentlemen, we now have a short break before we move on to the Q&A session. See you in 5 minutes.

Speaker #3: Thank you.

Speaker #2: Thank you very much, Oliver. Ladies and gentlemen, we now have a short break before we move on to the Q&A session. See you in five minutes.

[Company Representative] (BMW Group): Dear colleagues, ladies and gentlemen, welcome back to the second part of our group quarterly call. We will now continue in German. We took a short break, and now we are very happy to answer your questions. As always, we will give you some technical advice, and then we start with the first question. Ladies and gentlemen, we will now start with the Q&A session. If you would like to ask a question, then please raise your hand. It can be found on your screen. If you are connected by phone, then please press the star button and 9. You can ask your questions one by one. As soon as your name has been announced, it is up to you to ask a question.

Operator: Dear colleagues, ladies and gentlemen, welcome back to the second part of our group quarterly call. We will now continue in German. We took a short break, and now we are very happy to answer your questions. As always, we will give you some technical advice, and then we start with the first question. Ladies and gentlemen, we will now start with the Q&A session. If you would like to ask a question, then please raise your hand. It can be found on your screen. If you are connected by phone, then please press the star button and 9. You can ask your questions one by one. As soon as your name has been announced, it is up to you to ask a question.

Speaker #3: Dear colleagues, ladies and gentlemen, welcome back to the second part of our group quarterly call. We will now continue in German, so we took a short break.

Speaker #3: And now we are very happy to answer your questions. As always, we will give you some technical advice, and then we start with the first question.

Speaker #3: Ladies and gentlemen, we will now start with the Q&A session. If you would like to ask a question, please raise your hand. It can be found on your screen.

Speaker #3: If you are connected by phone, then please press the star button and nine. Then you can ask your questions one by one. As soon as your name has been announced, it's up to you to ask a question.

Speaker #3: In order to withdraw the question, then please lower the hand in the Zoom app and also if you're connected by phone, press the star button and nine.

Christina Amann: In order to withdraw the question, then please lower the hand in the Zoom app, and also, if you're connected by phone, press the star button and nine. The first question. Here's our first question. It comes from Christina Amann from Thomson Reuters. Please switch on your mic now. Good morning. Thank you very much. Yes, good morning to you. Mr. Zipse, first of all, I would like to thank you for taking your time, and I wish you all the best for your time after BMW. Today, I'm interested in tariffs. Trump announced to have 25% for imports of cars. Are you optimistic that this will not be implemented, and if yes, why? Second question, the Near East, two things. You pointed out that it has an effect on sales. Can you put a figure to it?

Operator: In order to withdraw the question, then please lower the hand in the Zoom app, and also, if you're connected by phone, press the star button and nine. The first question. Here's our first question. It comes from Christina Amann from Thomson Reuters. Please switch on your mic now.

Speaker #3: Now, the first question. Here's our first question. It comes from Christina Arman from Thomson Reuters. Please switch on your mic now. Good morning. Thank you very much.

Christina Amann: Good morning. Thank you very much. Yes, good morning to you. Mr. Zipse, first of all, I would like to thank you for taking your time, and I wish you all the best for your time after BMW. Today, I'm interested in tariffs. Trump announced to have 25% for imports of cars. Are you optimistic that this will not be implemented, and if yes, why? Second question, the Near East, two things. You pointed out that it has an effect on sales. Can you put a figure to it?

Speaker #3: Yes, good morning to you. Mr. Zipse, first of all, I would like to thank your you for taking your time, and I wish you all the best for your time after BMW.

Speaker #3: Today, I'm interested in tariffs. Trump announced a 25% tariff for imports of cars. Are you optimistic that this will not be implemented? And if yes, why?

Speaker #3: Second question, the Near East. Two things. You pointed out that it has an effect on sales. Can you put a figure to it? And then the second aspect, what does the war in Iran mean for spare parts deliveries?

[Company Representative] (BMW Group): The second aspect, what does the war in Iran mean for spare parts deliveries? Is there a risk? Thank you very much, Mrs. Aman. First, Mr. Zipse, and then Walter Mertl. Oliver, you have the floor. Good morning, Mrs. Aman. Thank you very much for being here today, as also in the past years. Tariffs. You know how this has to be read. It's not yet an executive order. For now, it's just a threat. It doesn't come unexpectedly because you know the Turnberry Agreement from last summer. It was agreed to say we reduce the import duties from 27.5% to 15%, and in return, the European Union will reduce the tariffs from 10% to 0%. Now, the American side implemented this for the past eight months, not the European Union.

Christina Amann: The second aspect, what does the war in Iran mean for spare parts deliveries? Is there a risk?

Speaker #3: Is there a risk? Okay. Thank you very much, Mrs. Arman. First, Mr. Zipse, and then Walter Mertl. Oliver, you have the floor. Good morning, Mrs. Arman.

Operator: Thank you very much, Mrs. Aman. First, Mr. Zipse, and then Walter Mertl. Oliver, you have the floor.

Oliver Zipse: Good morning, Mrs. Aman. Thank you very much for being here today, as also in the past years. Tariffs. You know how this has to be read. It's not yet an executive order. For now, it's just a threat. It doesn't come unexpectedly because you know the Turnberry Agreement from last summer. It was agreed to say we reduce the import duties from 27.5% to 15%, and in return, the European Union will reduce the tariffs from 10% to 0%. Now, the American side implemented this for the past eight months, not the European Union.

Speaker #3: Thank you very much. For being here today, as also in the past years. Tariffs. You know how this has to be read. It's not yet an executive order.

Speaker #3: For now, it's just a threat. And it doesn't come unexpectedly because you know the Turnberry wheel from last summer. So it was agreed to say we reduce the import duties from 27.5% to 15%.

Speaker #3: And in return, the European Union will reduce the tariffs from 10 to 0%. Now, the American side implemented this for the past eight months.

Speaker #3: Not the European Union. Now, they pointed out that it might take some time because it's a process in parliament, but it takes quite some time.

[Company Representative] (BMW Group): They pointed out that it might take some time because the process in Parliament, but it takes quite some time. For us, this is not surprising. This threat is not surprising, but I would like to point out it hasn't yet been implemented. I'd say the probability is high that the accelerated implementation and introduction of the original tariff is just a matter of days or weeks. This is not just our hope, but I think anything else would damage both sides. We are very optimistic. We still think it's just a threat in order to implement the deal. Thank you, Oliver. Walter, you have the floor. Concerning Near East. Mrs. Aman, good morning. Your questions. Impact on the volume. Well, it's limited, as I said in my presentation.

Oliver Zipse: They pointed out that it might take some time because the process in Parliament, but it takes quite some time. For us, this is not surprising. This threat is not surprising, but I would like to point out it hasn't yet been implemented. I'd say the probability is high that the accelerated implementation and introduction of the original tariff is just a matter of days or weeks. This is not just our hope, but I think anything else would damage both sides. We are very optimistic. We still think it's just a threat in order to implement the deal.

Speaker #3: Now, for us, this is not surprising. This threat is not surprising. But I would like to point out it hasn't yet been implemented. I'd say the probability is high that the accelerated implementation and introduction of the original tariff is just a matter of days or weeks.

Speaker #3: This is not just our hope, but I think anything else would damage both sides now. We are very optimistic. We still think it's just a threat in order to implement the deal.

Speaker #3: Thank you, Oliver. Walter, you have the floor. Concerning Near East. Mrs. Arman, good morning. Now, your questions. Impact on the volume. Well, it's limited, as I said in my presentation.

[Company Representative] (BMW Group): Thank you, Oliver. Walter, you have the floor.

Walter Mertl: Concerning Near East. Mrs. Aman, good morning. Your questions. Impact on the volume. Well, it's limited, as I said in my presentation. As for the rest, just as predicted in our forecast, we think it's temporary, and we will have a solution soon. It affects not just us, but the entire world economy. We assume there will soon be a solution, and this hardly can see an effect in Q1.

Speaker #3: As for the rest, just as predicted in our forecast, we think it's temporary and we will have a solution soon. It affects not just us but the entire world economy.

Walter Mertl: As for the rest, just as predicted in our forecast, we think it's temporary, and we will have a solution soon. It affects not just us, but the entire world economy. We assume there will soon be a solution, and this hardly can see an effect in Q1. Thank you very much, Walter Märtl. Next question, please. Next question comes from Christoph Brohmeyer from the DPA. Please switch on your mic. Good morning, ladies and gentlemen. I would like to wish you all the best as well. My question is relatively simple. If I do the math, then 1.25 percentage points, this is EUR 300 million in Q1. Is that correct? Is my calculation correct, or did I make a mistake? Thank you very much for this mathematical question. I have to hand over to the CFO because he's perfect in mathematics. Walter Märtl.

Speaker #3: So we assume there will soon be a solution. And you hardly can see an effect in Q1. Thank you very much, Walter Mertl. Next question, please.

Operator: Thank you very much, Walter Märtl. Next question, please. Next question comes from Christoph Brohmeyer from the DPA. Please switch on your mic.

Speaker #3: Next question comes from Christoph Broomeyer from the DPA. Please switch on your mic. Good morning, ladies and gentlemen. I would like to wish you all the best as well.

Christoph Meyer: Good morning, ladies and gentlemen. I would like to wish you all the best as well. My question is relatively simple. If I do the math, then 1.25 percentage points, this is EUR 300 million in Q1. Is that correct? Is my calculation correct, or did I make a mistake? Thank you very much for this mathematical question.

Speaker #3: My question is relatively simple. Now, if I do the math, then one point 25% percentage points, this is 300 million euros in Q1. Is that correct?

Speaker #3: Is my calculation correct? Or did I make a mistake? Thank you very much for this mathematical question. I have to hand over to the CFO.

Operator: I have to hand over to the CFO because he's perfect in mathematics. Walter Märtl.

Speaker #3: Because he's perfect in mathematics. Walter Mertl. Thank you very much. Well, your collection is calculation is correct. We only give quarter points, not specific figures, but always in quarter points.

Walter Mertl: Thank you very much. Well, your calculation is correct. We only give quarter points, not specific figures, but always in quarter points. It's around EUR 300 million. This is sales in the automotive industry. That's correct. Okay. Thank you. Next question, please. The next question comes from Felix Stippler from Handelsblatt. Please switch on your mic. Good morning, ladies and gentlemen. Mr. Zipse, also from me, all the best for the future. I have a question concerning the business model. The margins with you and with other premium manufacturers are low. Sales are more or less stable. For how long can this go on in the industry, or how do you manage the turnaround? Thank you very much, Mr. Stippler. Mr. Zipse, you have the floor. Good morning, Mr. Stippler. Thank you for your question. I would like to make 2 comprehensive remarks.

Speaker #3: It's around 300 million. This is sales in the automotive industry. That's correct. Okay. Thank you. Next question, please. Yes, the next question comes from Felix Stöppler from Handelsblatt.

Operator: Okay. Thank you. Next question, please. The next question comes from Felix Stippler from Handelsblatt. Please switch on your mic. Good morning, ladies and gentlemen.

Speaker #3: Please switch on your mic. Good morning, ladies and gentlemen. Yes, Mr. Zipse, also from me. All the best for the future. I have a question concerning the business model.

Felix Stippler: Mr. Zipse, also from me, all the best for the future. I have a question concerning the business model. The margins with you and with other premium manufacturers are low. Sales are more or less stable. For how long can this go on in the industry, or how do you manage the turnaround?

Speaker #3: The margins with you and with other premium manufacturers are low. Sales are more or less stable. For how long can this go on in the industry?

Speaker #3: Or how do you manage the turnaround? Thank you very much, Mr. Stöppler. Mr. Zipse, you have the floor. Good morning, Mr. Stöppler. Thank you for your question.

Operator: Thank you very much, Mr. Stippler. Mr. Zipse, you have the floor.

Oliver Zipse: Good morning, Mr. Stippler. Thank you for your question. I would like to make 2 comprehensive remarks.

Speaker #3: I would like to make two comprehensive remarks. Our business model is not does not come overnight. We have to see it in its entirety.

Oliver Zipse: Our business model does not come overnight. We have to see it in its entirety. BMW has a specific setup. The demands of a worldwide stable individual mobile market is fulfilled. It's stable. It has even grown since the pandemic. It's now stable, as such, it's very dynamic and changes. All in all, it's very stable. It's one of the most stable industries worldwide. If there is demand for vehicles, what can we do if the individual components are also very dynamic? Well, you know us, we have a very resilient, we even call it anti-fragile strategy. We are open to technologies. All of the powertrains are implemented everywhere at any point in time. We don't know exactly what the sales will be in a year X in the future.

Speaker #3: BMW has a specific setup. The demands of a worldwide, stable individual mobile market are fulfilled. It's stable. It has even grown since the pandemic.

Speaker #3: It's now stable. But as such, it's very dynamic and changes. But all in all, it's very stable. It's one of the most stable industries worldwide.

Speaker #3: So if there is demand for vehicles, what can we do if the individual components are also very dynamic? Well, you know us. We have a very resilient we even call it anti-fragile strategy.

Speaker #3: We are open to technologies. All of the powertrains are implemented everywhere at any point in time. We don't know exactly what the sales will be in a year X in the future.

Speaker #3: And it's easy to understand because to order to in order to do this, you have to have a lot of capabilities. And we are capable.

[Company Representative] (BMW Group): It's easy to understand because in order to do this, you have to have a lot of capabilities, and we are capable. We also benefit from it strongly. Here are 4 examples where we see an acute effect. First, the Chinese market, as you know, is decreasing slightly. We think that it will stabilize again in the course of the year, but in Europe it goes up. We have a global approach to counterbalance this. If you're not working globally, you always depend on regions. We don't. Second example, since the tariffs were risen to 15% last summer in the United States, we had the X5 increased by 10,000 units, almost all of those ICEs.

Oliver Zipse: It's easy to understand because in order to do this, you have to have a lot of capabilities, and we are capable. We also benefit from it strongly. Here are 4 examples where we see an acute effect. First, the Chinese market, as you know, is decreasing slightly. We think that it will stabilize again in the course of the year, but in Europe it goes up. We have a global approach to counterbalance this. If you're not working globally, you always depend on regions. We don't. Second example, since the tariffs were risen to 15% last summer in the United States, we had the X5 increased by 10,000 units, almost all of those ICEs.

Speaker #3: We also benefit from it strongly. Here are four examples where we see an acute effect. First, the Chinese market, as you know, is decreasing slightly.

Speaker #3: We think that it will stabilize again in the course of the year. But in Europe, it goes up. We have a global approach to counterbalance this.

Speaker #3: If you're not working globally, you're always dependent on regions. We don't. Second example, since the tariffs were risen to 15% last summer in the United States, we had the X5 increased by 10,000 units, almost all of those ICEs at the same time.

[Company Representative] (BMW Group): At the same time, the purchases in Europe increased, so we were able to react right away because we did have an increase in one powertrain, one vehicle, one market. Third example. Right now, the outcome is open concerning Iran, but we have an increase in gas prices and in Europe, more demand for e-vehicles. We have the Neue Klasse. We increase the production volume. We can react right away. The reaction in the United States is different from the one in Europe. This to us is to be open to technology. Of course, the demand is due to the tariffs, but also the political situation because power is used for other things than for e-vehicles in the United States. We have highly efficient ICEs, which is good.

Oliver Zipse: At the same time, the purchases in Europe increased, so we were able to react right away because we did have an increase in one powertrain, one vehicle, one market. Third example. Right now, the outcome is open concerning Iran, but we have an increase in gas prices and in Europe, more demand for e-vehicles. We have the Neue Klasse. We increase the production volume. We can react right away. The reaction in the United States is different from the one in Europe. This to us is to be open to technology. Of course, the demand is due to the tariffs, but also the political situation because power is used for other things than for e-vehicles in the United States. We have highly efficient ICEs, which is good.

Speaker #3: The purchases in Europe increased. So we were able to react right away because we did have an increase in one powertrain, one vehicle, one market.

Speaker #3: Third example. Now, right now, the outcome is open concerning Iran. But we have an increase in gas prices and, in Europe, more demand for e-vehicles.

Speaker #3: We have the Neue Klasse. We increased the production volume. We can react right away. So the reaction in the United States, it's different from the one in Europe.

Speaker #3: This to us is to be open to technology. And of course, the demand is due to the tariffs but also the political situation because power is used for other things than for e-vehicles in the United States.

Speaker #3: So we have highly efficient ICEs, which is good. So it has an effect, a perfect effect. And in the short run, you cannot install something like this.

[Company Representative] (BMW Group): It has an effect. A perfect effect, and in the short run, you cannot install something like this. Third, we are strong in all of the brands. Mr. Mertl talked about Mini. It has good growth. Rolls-Royce on the other side of the portfolio is also just as stable. It is not down to the profitability of individual vehicles, but we work in all of the market segments. That's the third pillar of the strategy. Mini, Rolls-Royce, and in between, we have more than 40 BMW models. This is why we can work in an anti-fragile manner. What does the future hold? What is the future of this business model? That was your question. Well, I still think that the hyper-optimistic perspective, which still persists individual technologies, is not future viable because the success depends on 3 pillars. It's long-term quality.

Oliver Zipse: It has an effect. A perfect effect, and in the short run, you cannot install something like this. Third, we are strong in all of the brands. Mr. Mertl talked about Mini. It has good growth. Rolls-Royce on the other side of the portfolio is also just as stable. It is not down to the profitability of individual vehicles, but we work in all of the market segments. That's the third pillar of the strategy. Mini, Rolls-Royce, and in between, we have more than 40 BMW models. This is why we can work in an anti-fragile manner. What does the future hold? What is the future of this business model? That was your question. Well, I still think that the hyper-optimistic perspective, which still persists individual technologies, is not future viable because the success depends on 3 pillars. It's long-term quality.

Speaker #3: Then third, we are strong in all of the brands. Mr. Mertl talked about Mini. It has good growth. Rolls-Royce, on the other side of the portfolio, is also just as stable.

Speaker #3: So it is not down to the profitability of individual vehicles, but we work in all of the market segments. That's the third pillar of the strategy.

Speaker #3: Mini, Rolls-Royce, and in between, we have more than 40 BMW models. This is why we can work in an anti-fragile manner. What does the future hold?

Speaker #3: What does the future of this business model? That was your question. Well, I still think that the hyper-optimistic perspective which still persists—individual technologies—does not, is not future viable.

Speaker #3: Because the success depends on three pillars. It's long-term quality, now it's of no use if the vehicle is of no value after two years because you use technologies which are no longer provided or which are just not robust.

[Company Representative] (BMW Group): It's of no use if the vehicle is of no value after 2 years because you use technologies which are no longer provided or which are just not robust. System integration. What does a car feel in its entirety? This is much more important than the very overheated, fast, and predominant implementation in vehicles. You see it everywhere in the world. This is not robust. How does it feel to drive a car? Drive the Neue Klasse, Symbiotic Drive. This is much more important than the individual technology. Ramp-up capabilities. We didn't have to postpone any ramp-up, not even by 1 day.

Oliver Zipse: It's of no use if the vehicle is of no value after 2 years because you use technologies which are no longer provided or which are just not robust. System integration. What does a car feel in its entirety? This is much more important than the very overheated, fast, and predominant implementation in vehicles. You see it everywhere in the world. This is not robust. How does it feel to drive a car? Drive the Neue Klasse, Symbiotic Drive. This is much more important than the individual technology. Ramp-up capabilities. We didn't have to postpone any ramp-up, not even by 1 day.

Speaker #3: Then system integration. What does a car feel in its entirety? This is much more important. Then the very overheated, fast, and predominant implementation in vehicles.

Speaker #3: You see it everywhere in the world. This is not robust. How does it feel to drive a car, drive the Neue Klasse, symbiotic drive?

Speaker #3: This is much more important than the individual technology. And then ramp-up up capabilities. We didn't have to postpone any ramp-up, not even by one day.

Speaker #3: This is much more important than to say, 'I have a show car. I have an announcement.' And then I have to delay it for three, four, five years.

[Company Representative] (BMW Group): This is much more important than to say, I have a show car, I have an announcement, and then I have to delay it for three, four, five years. The success stories are the system integration, ramp-up stability, and the open technology anti-fragile. We also have to see how innovative the vehicles are. Sometimes the media also focus on individual technologies, but this is not key to the success of the manufacturer. BMW, and this is totally independent of whether it's Mr. Zipse or Mr. Nedeljković, who is the CEO. BMW is very well set up. We believe in a strong future of BMW. Now, if we have higher profitability also due to fewer tariffs, then of course we would welcome it. Thank you very much. Thank you, Oliver Zipse. Next question, please. The next question comes from Sebastian Asch from FT. Please open your mic.

Oliver Zipse: This is much more important than to say, I have a show car, I have an announcement, and then I have to delay it for three, four, five years. The success stories are the system integration, ramp-up stability, and the open technology anti-fragile. We also have to see how innovative the vehicles are. Sometimes the media also focus on individual technologies, but this is not key to the success of the manufacturer. BMW, and this is totally independent of whether it's Mr. Zipse or Mr. Nedeljković, who is the CEO. BMW is very well set up. We believe in a strong future of BMW. Now, if we have higher profitability also due to fewer tariffs, then of course we would welcome it. Thank you very much.

Speaker #3: So the success stories are the system integration, ramp-up stability, and the open technology anti-fragile. So we also have to see how innovative the vehicles are.

Speaker #3: So sometimes the media also focus on individual technologies. But this is not key to the success of the manufacturers. BMW, and this is totally independent of whether it's Mr. Sipse or Mr. Nedelkovich, who is the CEO.

Speaker #3: BMW is very well set up. We believe in a strong future of BMW. Now, if we have higher profitability also due to fewer tariffs, then, of course, we would welcome it.

Speaker #3: Thank you very much. Thank you, Oliver Zipse. Next question, please. The next question comes from Sebastian Asch. From FT, please open your mic. Good morning, ladies and gentlemen.

Operator: Thank you, Oliver Zipse. Next question, please. The next question comes from Sebastian Asch from FT. Please open your mic.

Sebastian Asch: Good morning, ladies and gentlemen. Mr. Zipse, Mr. Mertl, thank you very much for taking your time this morning to talk to us. Mr. Mertl, my first question is, you talked about additionally providing for the FCA risk scheme. What was the amount in the first quarter? Could you please tell us or remind us what the first provision was from this quarter? Then second question, if I may, concerning the tariffs. This is to Mr. Zipse, I think. In the past months, you showed us a lot of optimism. You talked about positive expectations concerning the solution of this problem with the tariffs. Last summer, for example, I remember a possible deal with the administration, and you said that you are optimistic that this deal will be implemented swiftly. Why is this going to change?

Sebastian Ash: Good morning, ladies and gentlemen. Mr. Zipse, Mr. Mertl, thank you very much for taking your time this morning to talk to us. Mr. Mertl, my first question is, you talked about additionally providing for the FCA risk scheme. What was the amount in the first quarter? Could you please tell us or remind us what the first provision was from this quarter? Then second question, if I may, concerning the tariffs. This is to Mr. Zipse, I think. In the past months, you showed us a lot of optimism. You talked about positive expectations concerning the solution of this problem with the tariffs. Last summer, for example, I remember a possible deal with the administration, and you said that you are optimistic that this deal will be implemented swiftly. Why is this going to change?

Speaker #3: Mr. Zipse, Mr. Mertl, thank you very much for taking your time this morning to talk to us. Mr. Mertl, my first question is, you talked about additionally providing for the FCA risk scheme.

Speaker #3: What was the amount in the first quarter? And could you please tell us or remind us what the first provision was from this quarter?

Speaker #3: And then, second question, if I may, concerning the tariffs. This is to Mr. Zipse, I think. Now, in the past months, you showed us a lot of optimism.

Speaker #3: You talked about positive expectations concerning the solution of this problem with the tariffs. Last summer, for example, I remember a possible deal with the administration.

Speaker #3: And you said that you are optimistic that this deal will be implemented swiftly. Now, why is this going to change? Or let me put it differently.

Walter Mertl: Let me put it differently. How optimistic are you that this will find a solution in the next weeks or months? Thank you very much, Sebastian Asch. Let's start with Walter Märtl. Good morning. FCA, you asked about FCA and what our provisions are. Well, we had a slight to medium 3-digit amount to the 31 December 2025. We had to top it up, unfortunately, to a medium to a high 3-digit number in the millions. Now, you see it in the operating cost and in the financial services, the loss and profit accounts. Now, as I said, we tried to find a better and more correct solution for the suggestion of October. In December, we filed it. Unfortunately, it was the effect that nothing of this was really assumed. Now, usually, you can challenge this because in my eyes it's disproportionate and still unfair.

Sebastian Ash: Let me put it differently. How optimistic are you that this will find a solution in the next weeks or months?

Speaker #3: How optimistic are you that this will find a solution in the next weeks or months? Thank you very much, Sebastian. Let's start with Walter Mertl.

Operator: Thank you very much, Sebastian Asch. Let's start with Walter Märtl.

Speaker #3: Good morning. FCA, you asked about FCA and what our provisions are. Well, we had a slide to medium three-digit amount to the 31st of December 2025.

Walter Mertl: Good morning. FCA, you asked about FCA and what our provisions are. Well, we had a slight to medium 3-digit amount to the 31 December 2025. We had to top it up, unfortunately, to a medium to a high 3-digit number in the millions. Now, you see it in the operating cost and in the financial services, the loss and profit accounts. Now, as I said, we tried to find a better and more correct solution for the suggestion of October. In December, we filed it. Unfortunately, it was the effect that nothing of this was really assumed. Now, usually, you can challenge this because in my eyes it's disproportionate and still unfair.

Speaker #3: We had to top it up, unfortunately, to a medium to a high three-digit number in the millions. Now, you see it in the operating cost and in the financial services.

Speaker #3: The lost and profit accounts. Now, as I said, we tried to find a better and more correct solution for the suggestion of October. In December, we filed it.

Speaker #3: Unfortunately, it was the effect that nothing of this was really assumed. Now, usually, you can challenge this because in my eyes, it's disproportionate and still unfair.

Speaker #3: However, what is it all about without the participation of the banks and the main countries in the UK? It doesn't really make sense to file an opposition.

Oliver Zipse: What is it all about? Without the participation of the banks and the main countries in the UK, it doesn't really make sense to file an opposition. At the end of the day, we had to top up the provisions. Thank you very much, Walter. This brings us to the second part of the question, tariffs and BMW's optimism. Mr. Zipse, you have the floor. Well, Karl Popper said that optimism is an obligation for entrepreneurs. If you're not optimistic, if you are pessimistic, it's of no use to anyone. We fulfill this obligation. Now, that's just what the philosopher said. I remain optimistic because the pressure on the EU is mounting. The answer is not that easy. The answer cannot just be we're not doing anything, because that would be a very bad answer for the EU. I stay optimistic.

Walter Mertl: What is it all about? Without the participation of the banks and the main countries in the UK, it doesn't really make sense to file an opposition. At the end of the day, we had to top up the provisions.

Speaker #3: So at the end of the day, we had to top up the provisions. Thank you very much, Walter. This brings us to the second part of the question, tariffs.

Operator: Thank you very much, Walter. This brings us to the second part of the question, tariffs and BMW's optimism. Mr. Zipse, you have the floor.

Speaker #3: And BMW's optimism. Mr. Zipse, you have the floor. Well, Karl, Popper said that optimism is an obligation for entrepreneurs. If you're not optimistic, if you are pessimistic, it's of no use to anyone.

Oliver Zipse: Well, Karl Popper said that optimism is an obligation for entrepreneurs. If you're not optimistic, if you are pessimistic, it's of no use to anyone. We fulfill this obligation. Now, that's just what the philosopher said. I remain optimistic because the pressure on the EU is mounting. The answer is not that easy. The answer cannot just be we're not doing anything, because that would be a very bad answer for the EU. I stay optimistic.

Speaker #3: So, we fulfill this obligation. Now, that's just what the philosopher said. I remain optimistic because the pressure on the EU is mounting. The answer is not that easy.

Speaker #3: The answer cannot just be we're not doing anything because that would be a very bad answer for the EU. So I stay optimistic. There is increased pressure now.

[Company Representative] (BMW Group): There is increased pressure now, and I am sure that we will have a solution soon. In the past weeks, we continued talking to the administration in Washington. We said after the deal, we will continue. I'm sure that we will have an offset deal until the end of the year. We'll have an agreement, and it will foresee that for importers, which are at the same time exporters, there will be an offset. For each exported vehicle, you're allowed to import one. We get a lot of support, but only if the first part of the deal is carried out. That's the European Union. I reflect the discussion which we are having in parallel with the American administration. The export model, which is done by BMW is supported by them strongly. Next question, please.

Oliver Zipse: There is increased pressure now, and I am sure that we will have a solution soon. In the past weeks, we continued talking to the administration in Washington. We said after the deal, we will continue. I'm sure that we will have an offset deal until the end of the year. We'll have an agreement, and it will foresee that for importers, which are at the same time exporters, there will be an offset. For each exported vehicle, you're allowed to import one. We get a lot of support, but only if the first part of the deal is carried out. That's the European Union. I reflect the discussion which we are having in parallel with the American administration. The export model, which is done by BMW is supported by them strongly.

Speaker #3: And I am sure that we will have a solution soon. In the past weeks, so in the past weeks, we continued talking to the administration in Washington.

Speaker #3: We said, after the deal, we will continue I'm sure that we will have an offset deal until the end of the year. We'll have an agreement.

Speaker #3: And it will foresee that for importers, which are at the same time exporters, there will be an offset. So for each exported vehicle, you're allowed to import one.

Speaker #3: We get a lot of support, but only if the first part of the deal is carried out. That's the European Union. So I reflect the discussion, which we are having in parallel with the American administration.

Speaker #3: The export model, which is done by BMW, is supported by them strongly. Next question, please. Now, our next question comes from Martin Hesse from Der Spiegel. Please open your mic now.

Operator: Next question, please. Our next question comes from Martin Hesse from Der Spiegel. Please open your mic now.

[Company Representative] (BMW Group): Our next question comes from Martin Hesse from Der Spiegel. Please open your mic now. Good morning, Mr. Zipse. I would like to wish you all the best. I have one political question. You are leaving BMW after 7 years, and the government has been in power for 1 year. What is your opinion on the work of the German government, particularly concerning mobility and the automotive industry? It's still open what the European regulation for the automotive industry will look like in the future. Thank you very much. Mr. Zipse, you have the floor. Mr. Hesse, politics is a difficult business. We see it's very hard to reach a consensus in a democratic environment. We always have an open door for all of the topics, of course, the other parties should be open as well. Not all of our wishes are heard.

Speaker #3: Good morning, Mr. Zipse. Now, I would like to wish you all the best. I have one political question. You are leaving BMW after seven years.

Martin Hesse: Good morning, Mr. Zipse. I would like to wish you all the best. I have one political question. You are leaving BMW after 7 years, and the government has been in power for 1 year. What is your opinion on the work of the German government, particularly concerning mobility and the automotive industry? It's still open what the European regulation for the automotive industry will look like in the future.

Speaker #3: And the government has been in power for one year. What is your opinion on the work of the German government, particularly concerning mobility and the automotive industry?

Speaker #3: It's still open what the European regulation for the automotive industry will look like in the future. Thank you very much. Mr. Zipse, you have the floor.

Operator: Thank you very much. Mr. Zipse, you have the floor.

Speaker #3: Mr. Hesse, politics is a difficult business. We see it's very hard to reach a consensus in a democratic environment. We always have an open.

Oliver Zipse: Mr. Hesse, politics is a difficult business. We see it's very hard to reach a consensus in a democratic environment. We always have an open door for all of the topics, of course, the other parties should be open as well. Not all of our wishes are heard.

Speaker #3: For all of the topics, but of course, the other parties should be open as well. Not all of our wishes are heard. In particularly, concerning the revision of the CO2 regulation, it shall be implemented during the course of the year.

[Company Representative] (BMW Group): In particularly concerning the revision of the CO2 regulation, it shall be implemented during the course of the year. We cannot yet be content with this. Just to say we are open for technologies because we decreased the demand of 100% to 90%, and then in the small print it is described what the 10% shall look like, and then they introduce a new vehicle category for small vehicles. Well, it goes into the right direction, okay, but it won't be enough in order to boost or to maintain even the economic power of the European automotive industry. Now, e-mobility, well, in Europe, to credibly say that we are faster than China in China itself, well, you need to challenge this. You need to challenge whether we are still on the right track, whether we still do the right thing for the economy.

Oliver Zipse: In particularly concerning the revision of the CO2 regulation, it shall be implemented during the course of the year. We cannot yet be content with this. Just to say we are open for technologies because we decreased the demand of 100% to 90%, and then in the small print it is described what the 10% shall look like, and then they introduce a new vehicle category for small vehicles. Well, it goes into the right direction, okay, but it won't be enough in order to boost or to maintain even the economic power of the European automotive industry. Now, e-mobility, well, in Europe, to credibly say that we are faster than China in China itself, well, you need to challenge this. You need to challenge whether we are still on the right track, whether we still do the right thing for the economy.

Speaker #3: We cannot yet be content with this. Just to say, we are open for technologies because we decreased the demand of 100% to 90%. And then in the small print, it is described what the 10% shall look like.

Speaker #3: And then they introduced a new vehicle category for small vehicles. Well, it goes in the right direction, okay, but it won't be enough in order to boost or to maintain even the economic power of the European automotive industry.

Speaker #3: Now, e-mobility, well, in Europe, to credibly say that we are faster than China in China itself, well, you need to challenge this. You need to challenge whether we are still on the right track, whether we still do the right thing for the economy.

Speaker #3: We firmly believe, as you know, in a long-term business model. This is why we further promote e-mobility still. We believe when we look at 2030 to 2035, well, the best case in Europe will be 15%, but, well, this is still exaggerated.

[Company Representative] (BMW Group): We firmly believe, as you know, in a long-term business model. This is why we further promote e-mobility still. We believe when we look at 2030 to 2035, well, the best CO2 in Europe will be 15%. That, well, this is still exaggerated. Yes, we know that politics is a difficult business. We remain open for discussions, and we are happy to contribute whenever we can. Thank you very much, Martin Hesse. Next question, please. The next question comes from Frank Volk from Automobilwoche. Please open your mic now. Good morning, Mr. Zipse, Mr. Mertl. I have two questions concerning the Neue Klasse. You both underlined that you have a very high order bank and order volume. What about the production? How is the production going? Are you able to fulfill this increased demand? How is the rollout, the production rollout?

Oliver Zipse: We firmly believe, as you know, in a long-term business model. This is why we further promote e-mobility still. We believe when we look at 2030 to 2035, well, the best CO2 in Europe will be 15%. That, well, this is still exaggerated. Yes, we know that politics is a difficult business. We remain open for discussions, and we are happy to contribute whenever we can.

Speaker #3: But yes, we know that politics is a difficult business. We remain open for discussions, and we are happy to contribute whenever we can. Thank you very much, Martin Hesse.

Operator: Thank you very much, Martin Hesse. Next question, please. The next question comes from Frank Volk from Automobilwoche. Please open your mic now.

Speaker #3: Next question, please. The next question comes from Frank Volk from Automobilwoche. Please open your mic now. Good morning, Mr. Zipse, Mr. Mertl. I have two questions concerning the neue Klasse.

Frank Volk: Good morning, Mr. Zipse, Mr. Mertl. I have two questions concerning the Neue Klasse. You both underlined that you have a very high order bank and order volume. What about the production? How is the production going? Are you able to fulfill this increased demand? How is the rollout, the production rollout?

Speaker #3: You both underlined that you have a very high order bank and order volume. What about the production? How is the production going? Are you able to fulfill this increased demand?

Speaker #3: How is the production rollout? Did you increase production again? Or will you increase the production volume again? That's the first question. And then second question, on tariffs.

Oliver Zipse: Did you increase production again, or will you increase the production volume again? That's the first question. Second question on tariffs, which was discussed before. Mr. Zipse, did I understand you correctly? Did you say that you understand the US government, that you understand that the US government now has a stricter approach to the EU? Thank you very much, Mr. Volk. Mr. Zipse, you have the floor. Mr. Volk, we are very happy with the incoming orders for the iX3, and we also see it for the i3, which is not yet on the market. Still, we have orders coming in, and of course, we are able to fulfill the demand. The question is just when. The waiting times are a bit too long still, but it's a positive sign. They are not infinitely long.

Frank Volk: Did you increase production again, or will you increase the production volume again? That's the first question. Second question on tariffs, which was discussed before. Mr. Zipse, did I understand you correctly? Did you say that you understand the US government, that you understand that the US government now has a stricter approach to the EU?

Speaker #3: Which was discussed before. Mr. Zipse, did I understand you correctly? Did you say that you understand the US government, that you understand that the US government now has a stricter approach to the EU?

Speaker #3: Thank you very much, Mr. Volk. Mr. Zipse, you have the floor. Mr. Volk, we are very happy with the incoming orders for the iX3.

Operator: Thank you very much, Mr. Volk. Mr. Zipse, you have the floor.

Oliver Zipse: Mr. Volk, we are very happy with the incoming orders for the iX3, and we also see it for the i3, which is not yet on the market. Still, we have orders coming in, and of course, we are able to fulfill the demand. The question is just when. The waiting times are a bit too long still, but it's a positive sign. They are not infinitely long.

Speaker #3: And we also see it for the i3, which is not yet on the market. Still, we have orders coming in. And of course, we are able to fulfill the demand.

Speaker #3: The question is just when. So the waiting times are a bit too long still, but it's a positive sign. They are not infinitely long, but yes, we have new shifts.

[Company Representative] (BMW Group): Yes, we have new shifts, and the same will happen in Munich once the i3 is in production. Every third full electric vehicle ordered in Europe is an iX3, and those are real pre-orders with advanced payments. It's not just increased interest. The plant is doing well, and it corresponds also to our expectations. With the iX3, we are very happy that we have a very high penetration rate. It's not just owners who buy the new one, but we do conquer a lot of people from the competition. That's great. If you would like to order an iX3, you will get one, of course, Mr. Volk. Second question, do I have understanding for this call up? I'm not calling it a threat, but this call up to really implement the agreed deal.

Oliver Zipse: Yes, we have new shifts, and the same will happen in Munich once the i3 is in production. Every third full electric vehicle ordered in Europe is an iX3, and those are real pre-orders with advanced payments. It's not just increased interest. The plant is doing well, and it corresponds also to our expectations. With the iX3, we are very happy that we have a very high penetration rate. It's not just owners who buy the new one, but we do conquer a lot of people from the competition. That's great. If you would like to order an iX3, you will get one, of course, Mr. Volk. Second question, do I have understanding for this call up? I'm not calling it a threat, but this call up to really implement the agreed deal.

Speaker #3: And the same will happen in Munich once the i3 is in production. Every third full electric vehicle ordered in Europe is an iX3. And those are real pre-orders with advanced payments.

Speaker #3: It's not just increased interest. So the plant is doing well. And it corresponds also to our expectations with the iX3. We are very happy that we have a very high penetration rate.

Speaker #3: So it’s not just owners who buy the new one, but we do conquer a lot of people from the competition. That’s great. If you would like to order an iX3, you will get one, of course, Mr. Volk.

Speaker #3: Second question, do I have understanding for this call-up? I'm not calling it a threat, but this call-up to really implement the agreed deal. Yes, I understood that they issued the reminder or the call-up.

[Company Representative] (BMW Group): Yes, I understood that they issued the reminder or the call up, and I'm sure it will lead to a result. Next question, please. Next question comes from Stephen Wilmot from The Wall Street Journal. Please open your mic now.

Oliver Zipse: Yes, I understood that they issued the reminder or the call up, and I'm sure it will lead to a result.

Speaker #3: And I'm sure it will lead to a result. Next question, please. Next question comes from Steven Wilmot from The Wall Street Journal. Please open your mic now.

[Company Representative] (BMW Group): Next question, please. Next question comes from Stephen Wilmot from The Wall Street Journal. Please open your mic now.

Speaker #3: Good morning. Thank you very much for taking the questions. First one: the Chinese market is obviously changing rapidly, as we all know. Can you just summarize what changes you're seeing and the nature of the premium car buyer in China, and how those are affecting BMW?

Stephen Wilmot: Good morning. Thank you very much for taking the questions. First one, the Chinese market is obviously changing rapidly, as we all know. Can you just summarize what changes you're seeing in the nature of the premium car buyer in China and how those are affecting BMW? Secondly, just a couple of clarifications of things that you previously said. You implied that you'd seen an increase in EV demand as a result of the rising oil price. Can you just confirm that's what you were saying? There may have been some issue with the translation or something. I just wanted to make sure I understood that correctly.

Speaker #3: And secondly, just a couple of clarifications of things that you've previously said. You implied that you'd seen an increase in EV demand as a result of the rising oil price.

Speaker #3: Can you just confirm that's what you were saying? There may have been some issue with the translation or it's something I just wanted to make sure I understood that correctly.

Stephen Wilmot: Secondly, I wasn't totally sure when you talk about this system of i-import for ex-- in terms of the US tariffs here, you've been arguing for credits for your exports from Spartanburg. Are you saying that the US administration is open to that model, and that they're just waiting for the EU to fulfill its side of the deal? Is that what I understood correctly? Just if you could just clarify what's actually happening there and what you expect to happen. Thank you very much.

Speaker #3: And secondly, I wasn't totally sure what when you talk about this system of import for in terms of the US tariffs here, the you've been arguing for credits for your exports from Spartanburg.

Speaker #3: Are you saying that the US administration is open to that model? And that they're just waiting for the EU to fulfill its side of the deal?

Speaker #3: Is that what I understood? Correctly? Just if you could just clarify what's actually happening there and what you expect to happen. Thank you very much.

Speaker #3: Thank you very much, Steven. So let's start with the Chinese market and the offset logics with the US administration. This is Mr. Zipse. And then Walter Mertl on the effect of what's happening in Iran.

Oliver Zipse: Thank you very much, Stephen. Let's start with the Chinese market and the offset logics with the US administration. This is Mr. Zipse, and then Walter Mertl on the effect of what's happening in Iran. Good morning, Stephen. If you're in New York, I'd say good night and not good morning. Let me answer questions one to three, and then I hand over to my colleague. Of course, in the Chinese market, a lot is changing. A high impact has that the subsidies for pure e-mobility is withdrawn. This comes from the administration. It's not just driven by the market. It had a huge effect on the Chinese manufacturers, particularly in Q1. You need to understand this when you look at the market. BMW, China is still our biggest market, and it's a central technology driver. We showed this also at the trade show.

Operator: Thank you very much, Stephen. Let's start with the Chinese market and the offset logics with the US administration. This is Mr. Zipse, and then Walter Mertl on the effect of what's happening in Iran.

Speaker #3: Good morning, Steven. So if you're in New York, I'd say good night and not good morning. Let me answer questions one to three, and then I hand over to my colleague.

Oliver Zipse: Good morning, Stephen. If you're in New York, I'd say good night and not good morning. Let me answer questions one to three, and then I hand over to my colleague. Of course, in the Chinese market, a lot is changing. A high impact has that the subsidies for pure e-mobility is withdrawn. This comes from the administration. It's not just driven by the market. It had a huge effect on the Chinese manufacturers, particularly in Q1. You need to understand this when you look at the market. BMW, China is still our biggest market, and it's a central technology driver. We showed this also at the trade show.

Speaker #3: Of course, in the Chinese market, a lot is changing. A high impact has the subsidies for pure e-mobility is withdrawn. This comes from the administration.

Speaker #3: It's not just driven by the market. It had a huge effect on the Chinese manufacturers, particularly in the first quarter. You need to understand this when you look at the market.

Speaker #3: Then BMW, China is still our biggest market. And it's a central technology driver. We showed this also at the trade show. We don't have to go into detail.

[Company Representative] (BMW Group): We don't have to go into detail. We showed that we have a very close cooperation, and we have the empowerment of the production sites. In 2026, we had 625,000 vehicles. It's the largest individual market. In Q1, you always have to look at it in relative terms. I think that's highly important. We have the Neue Klasse. It's similar to Europe, and it's very popular, the Neue Klasse, and we think that it will be welcomed there as well with open arms. The market normalizes because in a normal market, which is so big, Chinese manufacturers, both on the delivery side and also on the market side, are dominant. It's just like in Europe and the United States. They adjust, and they become the dominant players.

Oliver Zipse: We don't have to go into detail. We showed that we have a very close cooperation, and we have the empowerment of the production sites. In 2026, we had 625,000 vehicles. It's the largest individual market. In Q1, you always have to look at it in relative terms. I think that's highly important. We have the Neue Klasse. It's similar to Europe, and it's very popular, the Neue Klasse, and we think that it will be welcomed there as well with open arms. The market normalizes because in a normal market, which is so big, Chinese manufacturers, both on the delivery side and also on the market side, are dominant. It's just like in Europe and the United States. They adjust, and they become the dominant players.

Speaker #3: Now we showed that we have a very close cooperation, and we have the empowerment of the production sites, and of course, in 2026, we had 625,000 vehicles.

Speaker #3: It's the largest individual market. And in Q1, we so you always have to look at it in relative terms. I think that's highly important.

Speaker #3: We have the Neue Klasse. It's similar to Europe, and it's very popular, the Neue Klasse. And we think that it will be welcomed there as well.

Speaker #3: With open arms. Of course, the market normalizes, because in a normal market, which is so big, Chinese manufacturers—both on the delivery side and also on the market side—are dominant.

Speaker #3: It's just like in Europe and the United States. They adjust. And they become the dominant players. So it's not that surprising what we see in China.

[Company Representative] (BMW Group): It's not that surprising what we see in China. They are highly innovative, I think that's clear, but we still firmly believe that China will remain our biggest market also in the future. I can just confirm what I said before. I think that for the United States, a good business model is to have export-oriented companies to focus on them, to promote their activities, and not just local for local. Where we have the business model, we are heard. In order to answer your questions, yes, I do believe that in the past weeks and months, this will be heard and will also be implemented. Thank you very much, Oliver. Concerning Iran. Best demand. Walter, you have the floor. Thank you very much. The best demand depends on the region.

Oliver Zipse: It's not that surprising what we see in China. They are highly innovative, I think that's clear, but we still firmly believe that China will remain our biggest market also in the future. I can just confirm what I said before. I think that for the United States, a good business model is to have export-oriented companies to focus on them, to promote their activities, and not just local for local. Where we have the business model, we are heard. In order to answer your questions, yes, I do believe that in the past weeks and months, this will be heard and will also be implemented. Thank you very much, Oliver. Concerning Iran. Best demand.

Speaker #3: They are highly innovative—I think that's clear. But we still firmly believe that China will remain our biggest market, also in the future. Now, I can just confirm what I said before.

Speaker #3: I think that, for the United States, a good business model is to have export-oriented companies, to focus on them, to promote their activities, and not just local for local.

Speaker #3: So, where we have the business model, we are heard. So, in order to answer your questions: yes, I do believe that in the past weeks and months, this will be heard and will also be implemented.

Speaker #3: Thank you very much, Oliver. Now, concerning Iran, and best demand. Walter, you have the floor. Thank you very much. The best demand depends on the region.

Operator: Walter, you have the floor. Thank you very much.

Walter Mertl: The best demand depends on the region. In Europe, we have more than 60% increase than Q1 2025. Whether this is due to IRA or because of our fantastic iX3, we can discuss this, of course. Both will have an effect probably. In other regions, in China, in the United States, because there is this withdrawal of subsidies, the demand is no longer that strong in the entire market and in China. Also here, as Mr. Zipse said, as before, look at the price segments where we feel the withdrawal of subsidies with vehicles up to $120,000.

Speaker #3: And in Europe, we said that more than 60% increase we have more than 60% increase than Q1 2025. Whether this is due to Iran or because of our fantastic iX3, we can discuss this, of course.

Walter Mertl: In Europe, we have more than 60% increase than Q1 2025. Whether this is due to IRA or because of our fantastic iX3, we can discuss this, of course. Both will have an effect probably. In other regions, in China, in the United States, because there is this withdrawal of subsidies, the demand is no longer that strong in the entire market and in China. Also here, as Mr. Zipse said, as before, look at the price segments where we feel the withdrawal of subsidies with vehicles up to $120,000.

Speaker #3: Both will have an effect probably. In other regions, in China, in the United States, we just mentioned it before. In the United States, because there is this withdrawal of subsidies, the demand is no longer that strong in the entire market.

Speaker #3: And in China, and also here as Mr. Zipse said, as before, look at the price segments where we feel the withdrawal of subsidies. With vehicles up to 120,000.

Speaker #3: And if you look at the overall decrease of volume in the Chinese market, then you see two-thirds are from the price segment up to 20,000.

[Company Representative] (BMW Group): If you look at the overall decrease of volume in the Chinese market, you see two-thirds are from the price band up to $20,000, and the rest from the price band up to $40,000. You see that we have a different impact at BMW than with others. Okay. Thank you very much. Next question, please. Next question comes from Lennart Pfahler from Politico Europe. Please open your mic now.

Walter Mertl: If you look at the overall decrease of volume in the Chinese market, you see two-thirds are from the price band up to $20,000, and the rest from the price band up to $40,000. You see that we have a different impact at BMW than with others.

Speaker #3: And the rest from the price spent up to 40,000. So you see that we have a difference impact at BMW than with others. Okay.

Operator: Okay. Thank you very much. Next question, please. Next question comes from Lennart Pfahler from Politico Europe. Please open your mic now.

Speaker #3: Thank you very much. Next question, please. Next question comes from Leonard Ruse from Politico EU. Please open your mic now. Yes. Hello. Good morning.

Lennart Pfahler: Yes. Hello. Good morning. Thank you for taking the time. Staying with the Chinese market, I have two questions. One of them doubling down on what Stephen Wilmot asked. I understand that you expect the Chinese market to stabilize in the rest of the year, and I also understand that you aim to remain a significant player in the market. I would be interested in how exactly you're planning on doing that. I'm wondering, will this be a pricing strategy? Will you work on technologies that will convince the Chinese market? I'm looking to better understand the avenue through which you become or remain a dominant player in China.

Speaker #3: Thank you for taking the time. Staying with the Chinese market, I have two questions. One of them sort of doubling down on what Steven asked.

Speaker #3: I understand that you expect the Chinese market to stabilize in the rest of the year. And I also understand that you aim to remain a significant player in the market.

Speaker #3: But I would be interested in how exactly you're planning on doing that. So I'm wondering, will this be a pricing strategy? Will you work on technologies that will convince the Chinese market?

Speaker #3: So I'm looking to better understand the avenue through which you become or remain a dominant player in China. And then secondly, regarding the status quo, I understand the market is down in China right now overall.

Lennart Pfahler: Secondly, regarding the status quo, I understand the market is down in China right now overall, and you're less affected by that than some other players. Although I would be also interested to get a better understanding of what is your sense of why that is the case right now. Again, is this a pricing problem, or is it possibly also a technology gap? Specifically, could this be automatic driving technologies where perhaps other players are more advanced and which becomes a increasingly important technology for Chinese customers? Thank you.

Speaker #3: And you're less affected by that than some other players. Although I would be also interested to get a better understanding of what is your sense of why that is the case right now.

Speaker #3: Again, is this a pricing problem or is it possibly also a technology gap specifically? Could this be automatic driving automatic driving technologies where perhaps other players are more advanced and which becomes an increasingly important technology for Chinese customers?

Speaker #3: Thank you. Good. Thank you. I hand over to Walter Mertl. Good morning, Mr. The Q1 overall market was decreased by 17.5%, and the CPCA has an annual forecast which was corrected to minus 7.6%.

Walter Mertl: Good. Thank you. I hand over to Walter Märtl. Good morning, Mr. Rooze. You know that the Q1 overall market was decreased by 17.5%, and the CPCA has an annual forecast which was corrected, -7.6% is the forecast now. End of this week or next week, it might even be down to 8. Now, there's 1 factor why we are still important, namely our openness to technology, our vehicles. We are known as BMW, so the purchase force, we shouldn't forget this. This stands for a value in itself. We have very good cars. Otherwise, we would see a massive decline in the volume as well. This is not given. You know that we've done a lot of things for 1 and a half years.

Operator: Good. Thank you. I hand over to Walter Märtl.

Walter Mertl: Good morning, Mr. Rooze. You know that the Q1 overall market was decreased by 17.5%, and the CPCA has an annual forecast which was corrected, -7.6% is the forecast now. End of this week or next week, it might even be down to 8. Now, there's 1 factor why we are still important, namely our openness to technology, our vehicles. We are known as BMW, so the purchase force, we shouldn't forget this. This stands for a value in itself. We have very good cars. Otherwise, we would see a massive decline in the volume as well. This is not given. You know that we've done a lot of things for 1 and a half years.

Speaker #3: Is the forecast now end of this week or next week? It might even be down to 8. Now, there's one factor why we are still important: namely, our openness to technology, our vehicles, we are known as Baumer.

Speaker #3: So the purchase force, we shouldn't forget this. This stands for a value in itself. We have very good cars. Otherwise, we would see a massive decline in the volume as well.

Speaker #3: This is not given. You know that we've done a lot of things for one and a half years. We did wide-sized the dealers. We closed dealers.

[Company Representative] (BMW Group): We did wide size the dealers, we closed dealers, we also opened up dealers in other sites. We boosted the dealer performance by training. This is one large element. We also carried out product measures in the past months. As a result, we also declined list prices. We lowered them, and those dealers are independent. The transaction prices are done by the dealers, not on our list prices. Now, in combination with the product measures, the result was that the list prices were lowered. The transaction prices increased slightly in the first quarter. This is positive. The vehicles are still appealing. Now, concerning the forecast in China, well, with the Neue Klasse and the Momentum Stack, so we will be on eye level with the Chinese offering parties many clients, and we showed it in China at the trade fair.

Walter Mertl: We did wide size the dealers, we closed dealers, we also opened up dealers in other sites. We boosted the dealer performance by training. This is one large element. We also carried out product measures in the past months. As a result, we also declined list prices. We lowered them, and those dealers are independent. The transaction prices are done by the dealers, not on our list prices. Now, in combination with the product measures, the result was that the list prices were lowered. The transaction prices increased slightly in the first quarter. This is positive. The vehicles are still appealing. Now, concerning the forecast in China, well, with the Neue Klasse and the Momentum Stack, so we will be on eye level with the Chinese offering parties many clients, and we showed it in China at the trade fair.

Speaker #3: We also opened up dealers in other sites, then we boosted the dealer performance by trainings. This is one large element. We also carried out product measures in the past months as a result.

Speaker #3: We also declined list prices. We lowered them. And those dealers are independent. The transaction prices are done by the dealers, not on our list prices.

Speaker #3: Now, in combination with the product measures, the result was that the list prices were lowered. The transaction prices increased slightly in the first quarter.

Speaker #3: This is positive. The vehicles are still appealing. Now, concerning the forecast in China, well, with the Neue Klasse, and the momentous stack, so we will be on eye level with the Chinese offering parties.

Speaker #3: Many clients, and we showed it in China at the trade fair. We also showed the positive demand for the i7, the iX3, and i3. Everyone wants to have this car.

[Company Representative] (BMW Group): We also showed the positive demand of the i7, the iX3, i3. Everyone wants to have this car. We can expect in Q4 to offer the cars. Pricing is okay. Thank you very much, Walter Märtl. Next question, please. Well, the next question comes from Stefan Rodomski from Süddeutsche Zeitung. Please unmute your mic. You have to press the star button and then 6. Good morning, ladies and gentlemen. Mr. Zipse, as a farewell, I have a fundamental question for you. Now, we heard in the past several times, there are rumors really that Chinese manufacturers might enter the factories in Europe or Germany with their Chinese cars and then produce their cars here. Now, it's very hard to comment on what others are doing, but it's just a fundamental question.

Walter Mertl: We also showed the positive demand of the i7, the iX3, i3. Everyone wants to have this car. We can expect in Q4 to offer the cars. Pricing is okay.

Speaker #3: And we can't expect in Q4, and we can expect in Q4 to offer the cars. So, pricing is okay. Thank you very much, Walter Mertl.

Operator: Thank you very much, Walter Märtl. Next question, please. Well, the next question comes from Stefan Rodomski from Süddeutsche Zeitung. Please unmute your mic. You have to press the star button and then 6.

Speaker #3: Next question, please. Well, the next question comes from Stefan Radomski from Süddeutsche Zeitung. Please unmute your mic. You have to press the star button and then 6.

Speaker #3: Good morning, ladies and gentlemen. Mr. Zipse, as a farewell. I have a fundamental question for you. Now we heard in the past several times there are rumors, really, that Chinese manufacturers might enter the factories in Europe or Germany with their Chinese cars and then produce their cars here.

Stefan Radomsky: Good morning, ladies and gentlemen. Mr. Zipse, as a farewell, I have a fundamental question for you. Now, we heard in the past several times, there are rumors really that Chinese manufacturers might enter the factories in Europe or Germany with their Chinese cars and then produce their cars here. Now, it's very hard to comment on what others are doing, but it's just a fundamental question.

Speaker #3: Now, it's very hard to comment on what others are doing, but it's just a fundamental question. Is that a risk, do you think? Might this open up a door which you will be unable to shut?

Oliver Zipse: Is that a risk, do you think? Might this open up a door which you will be unable to shut? Do you think that's positive because the plants can be maintained? Because if the Chinese don't come in, then they would have to be reduced in size. Thank you. Oliver Zipse, you have the floor. Mr. Rodomski, good morning. Thank you very much for your question. It's not that easy to understand what happens in the industry. 2025, BMW built more than 1 million cars in Germany, as much as never before, and 25% of the entire car production comes from BMW. Not the large manufacturers produce most, but BMW. It's actually a small manufacturer, but BMW is there at the forefront. Now, in the eyes of BMW, we don't have to reduce capacity at all.

Stefan Radomsky: Is that a risk, do you think? Might this open up a door which you will be unable to shut? Do you think that's positive because the plants can be maintained? Because if the Chinese don't come in, then they would have to be reduced in size.

Speaker #3: Or do you think that's positive because the plants can be maintained because if the Chinese don't come in, then they would have to be reduced in size?

Speaker #3: Thank you. Oliver Zipse, you have the floor. Mr. Radomski, good morning. Thank you very much for your question. It's not that easy to understand what happens in the industry.

Operator: Thank you. Oliver Zipse, you have the floor.

Oliver Zipse: Mr. Rodomski, good morning. Thank you very much for your question. It's not that easy to understand what happens in the industry. 2025, BMW built more than 1 million cars in Germany, as much as never before, and 25% of the entire car production comes from BMW. Not the large manufacturers produce most, but BMW. It's actually a small manufacturer, but BMW is there at the forefront. Now, in the eyes of BMW, we don't have to reduce capacity at all.

Speaker #3: 2025, BMW sold or built more than 1 million cars in Germany, as much as never before. And 25% of the entire car production comes from BMW.

Speaker #3: So, not the large manufacturers produce most, but BMW. It's actually a small manufacturer, but BMW is there at the forefront. Now, in the eyes of BMW, we don't have to reduce capacity at all.

Speaker #3: Look at Regensburg, 2025. It's the strongest plant. And we have full capacity utilization, Leipzig is the only plant in Germany where BMW and many are run on one belt.

[Company Representative] (BMW Group): Look at Regensburg, 2025, it's the strongest plant. We have full capacity utilization. Leipzig is the only plant in Germany where BMW and Mini are run on one belt. In Munich, we have the preparations for BMW i3. We invested into that. The plant in Munich will be like the one in Debrecen. We will have several shifts there as well, and this will start off in August. Dingolfing will have the rollout of the new 7, and from Neue Klasse, it will produce the ICE model. Maybe you heard that the Neue Klasse is not just an e-car, but there is an ICE on its own platform. This will be produced in Dingolfing. Spartanburg has an all-time high of 430,000 units. Debrecen will produce for the high demand of the iX3.

Oliver Zipse: Look at Regensburg, 2025, it's the strongest plant. We have full capacity utilization. Leipzig is the only plant in Germany where BMW and Mini are run on one belt. In Munich, we have the preparations for BMW i3. We invested into that. The plant in Munich will be like the one in Debrecen. We will have several shifts there as well, and this will start off in August. Dingolfing will have the rollout of the new 7, and from Neue Klasse, it will produce the ICE model. Maybe you heard that the Neue Klasse is not just an e-car, but there is an ICE on its own platform. This will be produced in Dingolfing. Spartanburg has an all-time high of 430,000 units. Debrecen will produce for the high demand of the iX3.

Speaker #3: And then in Munich, we have the preparations for BMW i3. We invested into that. So the plant in Munich will be like the one in Debrecen.

Speaker #3: So we will have several shifts there as well. And this will start off in August. Dingolfing will have a rollout of the new 7.

Speaker #3: And from Neue Klasse, it will produce the ICE model. Maybe you heard that the Neue Klasse is not just an e-car, but there is an ICE on its own.

Speaker #3: Platform. This will then be produced in Dingolfing. Spartanburg has an all-time high of 430,000 units. Debrecen will produce for the high demand of the iX3.

Speaker #3: So this question is not relevant for us. The production doesn't just mean that cars are assembled by some people. No, it's about system integration of highly complex products.

[Company Representative] (BMW Group): This question is not relevant for us. The production doesn't just mean that cars are assembled by some people. No, it's about system integration of highly complex products. It's much more than just an assembly plant. Of course, this is indispensable for the success of our company. Thank you very much. This brings us to the last three questions. First question, please. Yes, the next question comes from Timothy Lowe from Bloomberg News. Please open your mic now.

Oliver Zipse: This question is not relevant for us. The production doesn't just mean that cars are assembled by some people. No, it's about system integration of highly complex products. It's much more than just an assembly plant. Of course, this is indispensable for the success of our company.

Speaker #3: It's much more than just an assembly plant. And, of course, this is indispensable for the success of our company. Thank you very much. This brings us to the last three questions.

Operator: Thank you very much. This brings us to the last three questions. First question, please. Yes, the next question comes from Timothy Lowe from Bloomberg News. Please open your mic now.

Speaker #3: First question, please. Yes. The next question. Comes from Timothy Low from Bloomberg News. Please open your mic now. Thank you. I just wanted to ask real quick, given the full landscape of things with the tariffs and with China and the disruption in the Middle East, in March, we had the impression that maybe you thought that the first half of this year was going to be a trough, maybe even first quarter, and that things would maybe accelerate later in the year.

Timothy Lowe: Thank you. I just wanted to ask real quick, given the full landscape of things with the tariffs and with China and the disruption in the Middle East. In March, we had the impression that maybe you thought that the H1 of this year was gonna be a trough, maybe even Q1, and that things would maybe accelerate later in the year. I'm just curious, do you still believe that now, given what you've alluded to in the, you know, report as like the auto industry has been sort of like expectations ratcheted down. Do you still believe that, you know, early in the year is the trough and it will get better for BMW later in the year?

Speaker #3: I'm just curious, do you still believe that now, given what you've alluded to in the report as the auto industry is generally has been sort of like expectations ratcheted down?

Speaker #3: Do you still believe that early in the year is the trough and it will get better for BMW later in the year? Good. Thank you, Walter Mertl.

Walter Mertl: Good. Thank you. Walter Märtl, you have the floor. Thank you. Yes, we think that. We work on it every day. In Q1, we showed good performance, just as announced in March and in Q3. We said that we have a high burden from the tariffs and also because of the currencies. We reported it as such. In Q2, the currencies will still be an extra burden, as we saw in Q1. We already announced this, the discussion of the tariffs was already explained. For H2, the good momentum is that we roll out the Neue Klasse more and more, and this is why we're optimistic. Thank you very much. Next question, please. Next question comes from Joachim Herr from Börsen-Zeitung. Good morning.

Operator: Good. Thank you. Walter Märtl, you have the floor.

Speaker #3: You have the floor. Thank you. Yes, we think that. We work on it every day in Q1. We showed good performance just as announced.

Walter Mertl: Thank you. Yes, we think that. We work on it every day. In Q1, we showed good performance, just as announced in March and in Q3. We said that we have a high burden from the tariffs and also because of the currencies. We reported it as such. In Q2, the currencies will still be an extra burden, as we saw in Q1. We already announced this, the discussion of the tariffs was already explained. For H2, the good momentum is that we roll out the Neue Klasse more and more, and this is why we're optimistic.

Speaker #3: In March and in Q3, we said that we have a high burden from the tariffs and also because of the currencies. We reported it as such in the second quarter.

Speaker #3: The currencies will still be an extra burden as we saw in Q1. We And the discussion of the tariffs was already explained. And for the second half, the good momentum is that we roll out the Neue Klasse more and more.

Speaker #3: And this is why we're optimistic. Thank you very much. Next question, please. Next question comes from Joachim Hehr from Börsen-Zeitung. Please open your mic now.

Operator: Thank you very much. Next question, please. Next question comes from Joachim Herr from Börsen-Zeitung.

Speaker #3: Please press star and then 6. Good morning. I have a follow-up question concerning the Near East, probably to Mr. Mertl. Now, how much of your overall sales can be found in that region comes from that region?

Joachim Herr: Good morning. I have a follow-up question concerning the Near East, probably to Mr. Märtl. How much of your overall sales can be found in that region, comes from that region? You are highly optimistic that the conflict will be solved soon. I guess or that's the question, can you picture a scenario if this won't happen, that you then have to take corresponding measures? Second question, it seems that because of the high gas prices, the demand for e-vehicles increases, particularly in Europe. Do you think that this trend is going to continue even if the prices are lowered, even if the conflict is resolved? Do you think this will continue? Thank you very much, Joachim.

Joachim Herr: I have a follow-up question concerning the Near East, probably to Mr. Märtl. How much of your overall sales can be found in that region, comes from that region? You are highly optimistic that the conflict will be solved soon. I guess or that's the question, can you picture a scenario if this won't happen, that you then have to take corresponding measures? Second question, it seems that because of the high gas prices, the demand for e-vehicles increases, particularly in Europe. Do you think that this trend is going to continue even if the prices are lowered, even if the conflict is resolved? Do you think this will continue? Thank you very much, Joachim. Walter Märtl, you have the floor. Mr. Heer, good morning. The volume share of the Middle East is less than 1.5%. You are asking about scenarios.

Speaker #3: And you are highly optimistic that the conflict will be solved soon. But I guess, or that's the question, can you picture a scenario if this won't happen?

Speaker #3: That you then have to take corresponding measures? Second question: It seems that, because of the high gas prices, the demand for e-vehicles increases, particularly in Europe.

Speaker #3: Do you think that this trend is going to continue even if the prices are lowered even if the conflict is resolved? Do you think this will continue?

Speaker #3: Thank you very much, Joachim Walter Mertl. You have the floor. Mr. Hehr, good morning. The volume share of the Middle East is less than 1.5%.

Operator: Walter Märtl, you have the floor.

Walter Mertl: Mr. Heer, good morning. The volume share of the Middle East is less than 1.5%. You are asking about scenarios.

Speaker #3: You are asking about scenarios you know that BMW is always prepared for mitigations and, of course, we're doing this now as well. And the best demand within the EU, as I said, whether this is due to gas prices, whether this is due to something else, or because of the wonderful product i3 and iX3, we can discuss this, of course, as we already told your colleague of course, all of the factors will play a role.

Walter Mertl: You know that BMW is always prepared for mitigations, and of course, we are doing this now as well. The best demand within the EU, as I said, whether this is due to gas prices, whether this is due to something else or because of the wonderful product i3 and iX3, we can discuss this, of course, as we already told your colleague. Of course, all of the factors will play a role. I focus on our very good product, and I'm sure this is why the demand increased by more than 60% for BEV in the past year. Okay. Last question. Yes. Last question comes from Regina Ehm-Klier from Medienpresse Bayern, Passauer Neue Presse. Mrs. Ehm-Klier, please open your mic. Good morning. Thank you for handing me the floor. Mr. Zipse, first of all the best for you.

Speaker #3: I focus on our very good product, and I'm sure this is why the demand increased by more than 60% for BEV in the past year.

Speaker #3: Okay, last question. Yes, last question comes from Regina Inclear from Medienpresse Bayern, Passauer Neue Presse. Mrs. Inclear, please open your mic. Good morning. Thank you.

Operator: Okay. Last question. Yes. Last question comes from Regina Ehm-Klier from Medienpresse Bayern, Passauer Neue Presse. Mrs. Ehm-Klier, please open your mic.

Regina Ehm-Klier: Good morning. Thank you for handing me the floor. Mr. Zipse, first of all the best for you. I have one question concerning the costs which Mr. Mertl mentioned, costs in Munich, 10%. How can this be implemented? Does that mean that this will only be solved through HR costs or costs for staff?

Speaker #3: For handing me the floor. Mr. Zipse, first of all, all the best for you. I have one question concerning the costs which Mr. Mertl mentioned.

Regina Ehm-Klier: I have one question concerning the costs which Mr. Mertl mentioned, costs in Munich, 10%. How can this be implemented? Does that mean that this will only be solved through HR costs or costs for staff? Thank you very much. Mr. Mertl, you have the floor. Mrs. Ehm-Klier, good morning. It's about the overall setup. We have a new product, and we have more efficiency and more productivity in the plant, as with every new product. We install the newest technologies in our plant, and this is why we have better technologies, better working processes, and this allows us to reduce the costs. We are just more efficient. Thank you very much, Mr. Mertl. This brings us to the end of the call. I have some personal remarks.

Speaker #3: Costs in Munich, 10%. How can this be implemented? Does that mean that this will only be solved through HR costs or costs for staff?

Speaker #3: Thank you very much, Mr. Mertl. You have the floor. Mrs. Inclear, good morning. It's about the overall setup. We have a new product and we have more efficiency and more productivity in the plants.

Operator: Thank you very much. Mr. Mertl, you have the floor.

Walter Mertl: Mrs. Ehm-Klier, good morning. It's about the overall setup. We have a new product, and we have more efficiency and more productivity in the plant, as with every new product. We install the newest technologies in our plant, and this is why we have better technologies, better working processes, and this allows us to reduce the costs. We are just more efficient.

Speaker #3: As with every new product, so do we install the newest technologies in our plant, and this is why we have better technologies that are working processes, and this allows us to reduce the costs.

Speaker #3: We are just more efficient. Thank you very much. Mr. Mertl, this brings us to the end of the call. I have some personal remarks.

Operator: Thank you very much, Mr. Mertl. This brings us to the end of the call. I have some personal remarks.

Speaker #3: Oliver, we all know that this was your last call after 35 years at BMW and more than 10 years on the Board of Management.

[Company Representative] (BMW Group): Oliver, we all know that this was your last call after 35 years at BMW and more than 10 years at the board of management. You assumed the responsibility in a very dynamic, volatile time. It was very hard to make plans. With the Neue Klasse, you initiated one of the most important projects in the company history. Technology neutrality, you showed us, is the right path. On 30 May, you will be there for the shareholders at the annual conference. In name of the analysts, journalists, and shareholders, we say thank you for 20 quarterly calls and 7 annual conferences and annual assemblies. Thank you very much. Thank you for everything. Thank you very much from Munich. We will speak soon.

Speaker #3: You assumed the responsibility in a very dynamic, volatile time, and it was very hard to make plans. With the Neue Klasse you initiated, one of the most important projects in the company’s history.

Speaker #3: And technology neutrality you showed us is the right path. On the 30th of May, you will be there for the shareholders at the annual conference and in name of the analysts, journalists, and shareholders, we say thank you for 20 quarterly calls and 7 annual conferences.