Q1 2026 Bayerische Motoren Werke AG Earnings Call - Journalist Q&A

May 6, 2026

[Company Representative] (BMW): 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, and 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.

[Company Representative] (BMW): 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 nine, and 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: 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, and now we are very happy to answer your questions.

Speaker #3: 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.

Speaker #3: 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 nine.

Speaker #3: And 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.

[Company Representative] (BMW): 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?

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

Speaker #3: 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.

Speaker #3: 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?

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): Second question, the Near East, two things. You pointed out that it has an effect on sales. Can you put a figure to it? Then the second aspect, what does the war in Iran mean for spare parts deliveries? Is there a risk? Okay.

[Company Representative] (BMW): Then the second aspect, what does the war in Iran mean for spare parts deliveries? Is there a risk? Okay. Thank you very much, Mrs. Amann. First, Mr. Zipse, and then Walter Mertl. Oliver, you have the floor. Good morning, Mrs. Amann. 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, and it doesn't come unexpectedly because, you know, the Turnberry deal 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%. The American side implemented this for the past 8 months, not the European Union.

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

[Company Representative] (BMW): Thank you very much, Mrs. Amann. First, Mr. Zipse, and then Walter Mertl. Oliver, you have the floor. Good morning, Mrs. Amann. 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, and it doesn't come unexpectedly because, you know, the Turnberry deal 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%. The American side implemented this for the past eighth 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 has implemented this for the past eight months, not the European Union.

Speaker #3: Now, they pointed out that it might take some time because it's a process in parliament, but it takes quite some time. Now, for us, this is not surprising.

[Company Representative] (BMW): They pointed out that it might take some time because it's a 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. Amann, good morning. Your questions. Impact on the volume. Well, it's limited, as I said in my presentation.

Speaker #3: 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. Ahman, good morning. Now, your questions. Impact on the volume. Well, it's limited.

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

[Company Representative] (BMW): 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 you hardly can see an effect in Q1. Thank you very much, Walter Mertl. Next question, please. Next question comes from Christoph Bröhmeyer 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 Mertl.

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.

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.

Speaker #3: My question is relatively simple. Now, if I do the math, then 1.25 percentage points, this is €300 million 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.

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.

[Company Representative] (BMW): 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: But always in quarter points, it's around 300 million. This is sales in the automotive industry. That's correct. Okay. Thank you. Next question, please. Yes.

Speaker #3: The next question comes from Felix Stöppler from Handelsblatt. Please switch on your mic. Good morning, ladies and gentlemen. Yes, Mr. Zipse, also from me.

[Company Representative] (BMW): The next question comes from Felix Stippler from Handelsblatt. Please switch on your mic.

[Company Representative] (BMW): 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 two comprehensive remarks.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: Mr. Stöppler, Mr. Zipse, you have the floor. Good morning, Mr. Stöppler. Thank you for your question. I would like to make two comprehensive remarks.

Speaker #3: Our business model does not come overnight. We have to see it in its entirety. BMW has a specific setup. The demands of the worldwide, stable, individual mobility market are fulfilled.

[Company Representative] (BMW): 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.

Speaker #3: It's stable. It has even grown since the pandemic. It's now stable. But as such, it's very dynamic and changes. But all in all, it's very stable.

Speaker #3: It's one of the most stable industries worldwide. So if there is demand for vehicles, what can we do if the individual components are also very dynamic?

Speaker #3: 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.

Speaker #3: At any point in time. We don't know exactly what the sales will be in a year X in the future. And it's easy to understand because to order to in order to do this, you have to have a lot of capabilities.

[Company Representative] (BMW): We don't know exactly what the sales will be in a year X in the future, and 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 four 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. 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. At the same time, the purchases in Europe increased.

Speaker #3: And we are capable. 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 raised to 15% last summer in the United States, we had the X5 increased by 10,000 units.

Speaker #3: Almost all of those ICEs 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.

[Company Representative] (BMW): We were able to react right away because we did have an increase in 1 powertrain, 1 vehicle, 1 market. 3rd 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 US 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 US. We have highly efficient ICEs, which is good. It has an effect, a perfect effect, and in the short run, you cannot install something like this.

[Company Representative] (BMW): We were able to react right away because we did have an increase in one powertrain, one vehicle, one market. 3rd 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 US 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 US. We have highly efficient ICEs, which is good. It has an effect, a perfect effect, and in the short run, you cannot install something like this.

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 is 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.

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.

[Company Representative] (BMW): 3rd, we are strong in all of the brands. Walter 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 3rd 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.

[Company Representative] (BMW): And 3rd, we are strong in all of the brands. Walter 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 3rd 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 three pillars. It's long-term quality.

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, of no use if the vehicle is of no value after two years. Because you use technologies which are no longer provided.

[Company Representative] (BMW): 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.

[Company Representative] (BMW): 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. 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 one day.

Speaker #3: Or which are just not robust. 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 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): 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 3, 4, 5 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.

[Company Representative] (BMW): 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.

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 Sipse. Next question, please. The next question comes from Sebastian Asch. From FT. Please open your mic. Good morning, ladies and gentlemen.

[Company Representative] (BMW): 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 Q1? Could you please tell us or remind us what the first provision was from Q1? 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. 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. Now, why is this going to change?

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

[Company Representative] (BMW): 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. Let's start with 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. You see it in the operating cost and in the financial services, the loss and profit accounts. 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. Usually, you can challenge this because in my eyes it's disproportionate and still unfair.

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.

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.

Speaker #3: We had to top it up, unfortunately. To a medium to a high three-digit number in the millions now. Do you see it in the operating cost and in the financial services, the lost and profit accounts?

Speaker #3: 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.

Speaker #3: Now, usually, you can challenge this because, in my eyes, it's disproportionate and still unfair. However, what is it all about without the participation of the banks and the main countries in the UK?

[Company Representative] (BMW): 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. 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.

Speaker #3: It doesn't really make sense to file an opposition. So, at the end of the day, we had to top up the provisions. Thank you very much, Walter.

Speaker #3: 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.

Speaker #3: If you're not optimistic, if you are pessimistic, it's of no use to anyone. So we fulfill this obligation. Now, that's just what the philosopher philosophers said.

Speaker #3: 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.

Speaker #3: So I stay optimistic. There is increased pressure now. And I'm 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.

[Company Representative] (BMW): 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 am sure that we will have an offset deal until the end of the year. We will 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 are 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.

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.

[Company Representative] (BMW): Now our next question comes from Martin Hesse from Der Spiegel. Good morning, Mr. Zipse. Now I would like to wish you all the best. I have 1 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 for all of the topics, but of course, the other parties should be open as well. Not all of our wishes are heard.

[Company Representative] (BMW): Now our next question comes from Martin Hesse from Der Spiegel, please open your mic now. 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, 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? 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 for all of the topics, but 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.

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. Sipse, 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.

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): 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. 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 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.

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 code in Europe will be 15% that well, this is still exaggerated.

[Company Representative] (BMW): 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 BEV quote 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. 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's the production going? Are you able to fulfill this increased demand? How is the rollout, the production rollout?

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.

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.

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

Speaker #3: How is the rollout 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, which was discussed before.

[Company Representative] (BMW): 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.

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

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): 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 great deal. Yes, I understood that they issued the reminder or the call-up.

[Company Representative] (BMW): Yes, I understood that they issued the reminder or the call-up. 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.

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.

Speaker #3: Good morning. Thank you very much for taking the questions. First 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 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 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 import 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 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, when you talk about this system of import in terms of the US tariffs here, that 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.

[Company Representative] (BMW): 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.

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'll hand over to my colleague.

Speaker #3: 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.

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): 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): It's not that surprising what we see in China. They are highly innovative, I think that's clear. We still firmly believe that China will remain our biggest market also in the future. Now, 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. Now concerning Iran and BEV demand. Walter, you have the floor. Thank you very much. The BEV demand depends on the region.

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.

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.

[Company Representative] (BMW): In Europe, we said that 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. 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 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. Sipse 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 spent up to 20,000.

[Company Representative] (BMW): If you look at the overall decrease of volume in the Chinese market, then you see two-third 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 Rooze from Politico EU. Please open your mic now.

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.

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 Rooze: Yes. Hello. Good morning. Thank you for taking the time. Staying with the Chinese market, I have two questions. One of them sort of doubling down on what Stephen 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 Rooze: Secondly, regarding the status quo, I understand the market is down in China right now overall, you're less affected by that than some other players. 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. And I hand over to Walter Mertl. Good morning, Mr. Rose. You know that the Q1 overall market was decreased by 17.5% and the CPCA has an annual forecast which was corrected minus 7.6%.

[Company Representative] (BMW): Good. Thank you. I hand over to 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. There's 1 factor why we are still important, namely our openness to technology, our vehicles. We are known as BAUMA, 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 1.5 years. We did wide size the dealers. We closed dealers.

[Company Representative] (BMW): Good. Thank you. I hand over to 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 eight. There's 1 factor why we are still important, namely our openness to technology, our vehicles. We are known as BAUMA, 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 1.5 years. We did wide size the dealers. We closed dealers.

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 Bauma.

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 widen the dealers. We closed dealers.

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

[Company Representative] (BMW): We also opened up dealers in other size. 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. In combination with the product measures, the result was that the list prices were lowered. The transaction prices increased slightly in Q1. This is positive. The vehicles are still appealing. Now concerning the forecast in China, well, with the Neue Klasse and the momentum is there, we will be on eye level with the Chinese offering parties many clients, and we showed it in China at the trade fair. We also showed the positive demand of the i7, the iX3, i3.

Speaker #3: So 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.

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 of the i7, the iX3, i3. Everyone wants to have this car.

[Company Representative] (BMW): Everyone wants to have this car. We can expect in Q4 to offer the cars, pricing is okay. Thank you very much. Walter Mertl. Next question, please. Well, the next question comes from Stefan Kornelius from Süddeutsche Zeitung. Please unmute your mic. Good morning, ladies and gentlemen. Mr. Zipse, as a farewell, I have a fundamental question for you. 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. It's very hard to comment on what others are doing, 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?

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.

Speaker #3: Mertl, 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. Sipse, 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.

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?

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

[Company Representative] (BMW): Do you think that's positive because the plans 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. Kornelius, good morning. Thank you very much for your question. It's not that easy to understand what happens in the industry. 2025, BMW sold Oh, 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. In the eyes of BMW, we don't have to reduce capacity at all. Look at Regensburg, 2025, it's the strongest plant, and we have full capacity utilization.

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.

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 Mini are run on one belt.

[Company Representative] (BMW): Leipzig is the only plant in Germany where BMW and Mini are run on 1 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 Series, 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 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. This question is not relevant for us.

[Company Representative] (BMW): Leipzig is the only plant in Germany where BMW and Mini are run on 1 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 seven series, 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 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. This question is not relevant for us.

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

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. Depresin. 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): 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 Revell from Bloomberg News. Please open your mic now.

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.

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, 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 the first quarter, and that things would maybe accelerate later in the year.

Timothy Revell: Thank you. I just wanted to ask real quick, given the full landscape of things with the tariffs and with China and disruption in the Middle East. In March, we had the impression that maybe you thought that 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 is generally 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 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.

[Company Representative] (BMW): Good. Thank you. Walter Mertl, 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, and 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.

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.

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 already announced this. And the discussion of the tariffs was already explained.

Speaker #3: And for the second half, the good momentum is that we roll out the Neue Klasse more and more. And this is why we're optimistic.

Speaker #3: Thank you very much. Next question, please. Next question comes from your Achim Herr from Börsen Zeitung. Please open your mic now. Please press star and then 6.

Speaker #3: 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?

[Company Representative] (BMW): 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? 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 Herr. Walter Mertl, you have the floor. Mr. Herr, 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. Herr, good morning. The volume share of the Middle East is less than 1.5%.

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.

[Company Representative] (BMW): You know that BMW is always prepared for mitigations. 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 am 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 Immler from Mediengruppe Bayern, Passauer Neue Presse. Mrs. Immler, please open your mic. Good morning. Thank you for handing me the floor. Mr. Zipse, first of all the best for you.

Speaker #3: 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.

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

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

[Company Representative] (BMW): 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. Immler, good morning. It's about the overall setup. We have a new product, we have more efficiency and more productivity in the plant, as with every new product. We install the newest technologies in our plant, 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. Inklehr, good morning. It's about the overall setup. We have a new product. And we have more efficiency and more productivity in the plants.

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, better 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.

Speaker #3: 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.

[Company Representative] (BMW): 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, and 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, which made it 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 the name of the analysts, journalists, and shareholders, we say thank you for 20 quarterly calls and 7 annual conferences.