Donald Trump wins a second presidential term, and BMW’s CEO Oliver Zipse came out with some quick remarks – amid what is likely panic among European automakers – that BMW will be fine because of its “very, very large footprint in the US.” Meanwhile, BMW’s profit margins hit a four-year low.
European automakers are now assessing the Trump victory and what that may mean for their businesses, as shares plummet today due to fears over escalating trade disputes. It’s no secret Trump’s stance on electric vehicles – despite bringing Elon Musk into the fold – and foreign goods, and his second term will likely see an unraveling of Biden’s investments in green energy, a rolling back on EV mandates and other policies aimed at cutting CO2 emissions alongside stricter tariffs on foreign-made vehicles, and a total abandonment of US involvement in the Paris Climate Accords. Of course, the news this morning hit hard for some automakers in Europe, adding to a mountain of problems amid low sales in key markets, both at home in Europe and in China.
But Zipse says BMW can likely breathe a sigh of relief since the company has even “more of an advantage” despite what will be higher tariffs due to having a huge footprint in the US, Reuters reported.
The remarks came this morning central Europe time after Trump proclaimed he had taken the win, with Zipse presenting BMW’s third-quarter results. “In this respect, we shouldn’t be too nervous about what might happen,” Zipse said.
BMW has the group’s largest factory in Spartanburg, South Carolina, in addition to 30 locations around the country in 12 states, the report said.
BMW’s third-quarter profit fell 61% to 1.7 billion euros ($1.82 billion) due to lagging sales in China, the US, and Europe, Reuters reported. Bloomberg also reported that “BMW AG’s main measure of profitability fell to the lowest in more than four years in the third quarter,” the fallout from the massive recall of 1.5 million vehicles due to a faulty braking system supplied by Contential and weak demand in the Chinese market. Still, despite these hardships, BMW has said that it increased its sales of fully electric vehicles by +19,1% in the first nine months of this year, with a total of 294,054 BEVs delivered. BMW added that sales of BEVs rose by +22.6% to 266,151 vehicles, with the Mini brand seeing its fully-electric vehicle sales grow by +54.3% in the third quarter.
We’ll likely hear some response from other automakers on Trump’s win soon. “We’re expecting that it will be difficult for car makers and exporters this morning,” Nicolas Forest, chief investment officer at Candriam, told Reuters. “Trump could implement tariffs through executive orders, so for German carmakers or French luxury groups, everything Europe exports, it’s a risk.”
Top comment by Aigars Mahinovs
USA is already 4-5 years behind the rest of the developed world in BEV adoption. For many reasons, like:
very distributed population, making the range more important than in other markets
consumer preference for larger and less aerodynamic cars, requiring high batter capacity to overcome
historically very low car prices that make added cost of (large) batteries much more noticable
Elon making sure that all NA Tesla cars (until 2019) were basically incapable of charging on any non-Tesla fast chargers, which made it impossible for any third party charging networks to develop over the past decade (which is why USA has ~ ten times fewer charging stations than EU)
the first Trump term putting hard brakes on all renewable projects and Republicans in Obama or Biden terms slowing down all they could causing experienced car makers to put higher priority on BEV deliveries to other markets, like EU and China
Now USA will fall back another 4-5 years while the rest of the world moves on. By 2030 I really wonder where there will be more BEV adoption and better charging infrastructure - in rural USA or in Nigeria or Argentina. Optimistically thinking, of course. A big war would make it all null and void.
The election news is extremely fresh, but Trump has suggested a 10% or more tariffs on goods imported into the US, while giving him the option to set higher tariffs on certain countries that have put tariffs on US imports. He has suggested imposing as high as 200% tariffs on some imported cars, and wants to keep cars from Mexico out of the country. China’s BYD, for one, has paused its plan to build a factory in Mexico, which would be a key production site for access into the US, until after the election. BMW plans to start building its next-gen BEVs dubbed the “Neue Klasse” in Mexico in 2027.
Trump of course has China in his crosshairs and plans to phase out Chinese imports during his second term, while also prohibiting Chinese companies from owning US real estate and infrastructure in the energy and tech sectors.
Photo: BMW
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