BMW slashed its 2026 operating‑profit outlook for the car division by about 60 percent, blaming a sharp slump in China. The cut adds to a wave of warnings from Europe’s premium makers, including Mercedes‑Benz, Volkswagen and Stellantis, as domestically produced electric models erode demand for traditional luxury brands. The downgrade pushes BMW’s full‑year profit target to roughly €2 bn, far below analysts’ expectations.

Chinese EVs now capture a growing slice of the market, pushing Porsche’s China revenue down roughly two‑thirds between 2022 and 2025. Volkswagen’s joint‑venture profit in the country fell to €958 mn, almost half of the prior year, while the profit pool that once supplied half of BMW and Mercedes‑Benz earnings has all but vanished. Mercedes‑Benz reported a similar decline, with its China margin slipping to single‑digit levels.

The EU is weighing “Made in Europe” procurement rules to shield local suppliers as Chinese manufacturers lift their Europe share to just under 10 percent, up from near zero in 2021. Stellantis has begun talks with Dongfeng to use idle capacity in France, but the sector runs at only 70 percent utilisation, making any new EV investment hard to justify.