BMW AG increased its forecast for vehicle deliveries for the year on the back of a deep order bank and increasing demand for fully electric cars.
(Bloomberg) — BMW AG increased its forecast for vehicle deliveries for the year on the back of a deep order bank and increasing demand for fully electric cars.
The luxury-car maker now expects “solid” sales this year, up from a “slight” increase, it said Thursday. The new 5-Series sedan and its electric sibling, the i5, will help boost volumes during the second half of the year. The shares fell 1.4% in early Frankfurt trading.
The level of buyer interest in EVs means BMW is “investing more than originally planned in the global ramp-up of e-mobility,” Chief Financial Officer Walter Mertl said in a statement. In the last quarter, development spending jumped by 19% to €1.84 billion ($2 billion) as the company focused on the electrification of its fleet.
Sales of battery-powered cars doubled during the first half to nearly 153,000 to make up 13% of group deliveries.
While demand for its luxury cars remains strong, BMW warned Tuesday that increased costs for parts are reducing its cash flow while also citing logistics issues as a constraint. At the same time, it also slightly lifted its full-year earnings forecast as it expects availability of its luxury vehicles to improve in the second half of this year.
Several carmakers now face new logistics constraints after a shortage of semiconductors eased, allowing them to produce more vehicles. Volkswagen AG lowered its delivery outlook last week as shortages of trains and truck drivers left finished vehicles stranded at factories. Porsche AG had to restrict sales of its electric Taycan after grappling with sourcing certain components.
BMW group earnings before interest and tax increased 28% to €4.34 billion compared to the second quarter of last year, beating average analyst estimates of a €4.23 billion result. Automotive returns rose to 9.2%.
(Updates with share move in second paragraph. In an earlier version, the company corrected its earnings in the last paragraph)
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