Oliver Zipse, the outgoing chief executive of BMW, presented his final quarterly report on Wednesday with a starkly familiar refrain: profit had tumbled. Net income for the first three months of the year dropped 23.1 per cent to €1.67bn, while revenue contracted by 8.1 per cent to €31bn. The Munich-based automaker sold 565,780 vehicles worldwide, a decline of 3.5 per cent, and deliveries of its battery-electric models slumped by more than a fifth. The results, though worse than the consensus of analyst forecasts, were cushioned by a surge in European orders that Zipse described as unprecedented.

Viewed from Washington, the primary culprit is unambiguous. The tariffs imposed by President Donald Trump in the final stages of his first term have now fully embedded themselves in BMW’s cost structure, compressing margins on vehicles exported to the United States. Those levies did not apply in the year-ago period, making the comparison particularly painful. Analysts in London note that the trade friction shows no signs of easing, and BMW itself expects these headwinds to persist for the remainder of the fiscal year.

From Beijing’s perspective, the picture is equally troublesome. China, BMW’s largest single market, continues to suffer from sluggish consumer confidence and a price war that has eroded profitability across the automotive sector. The broader malaise is underscored by data from the China Passenger Car Association, which shows that carmakers’ average profit margin in the first quarter stood at just 3.2 per cent, barely half the 6 per cent achieved by downstream industrial firms. The EV segment, once the industry’s growth engine, has become a particular drag: BMW’s electric sales fell 20.1 per cent, and analysts warn that the profit gap between vehicle assemblers and battery suppliers—led by industry giant CATL—is widening as electrification accelerates.

Yet from within Europe, the narrative shifts. BMW reported its highest-ever order intake on the continent, suggesting that demand remains robust despite an economic backdrop that is anything but buoyant. The contrast with domestic rivals is telling: while BMW’s profits have fallen, they remain higher than those of Volkswagen and Mercedes-Benz, both of which face their own structural challenges. Zipse, who steered the group through pandemic disruptions and supply-chain crises, leaves his successor with a resilient order book and a reaffirmed full-year forecast. The new boss must now navigate a world of tariff uncertainty, China’s stubborn slowdown, and the relentless capital demands of electrification—all while trying to defend a margin that, for now, still outshines the competition.