On 6 March, it was reported that BMW may not be exempt from the 25% tariffs that U.S. President Donald Trump has imposed on imports from Mexico and Canada. This week, Trump allowed a one-month reprieve on tariffs to automakers. Specifically, this reprieve applied to those who complied with the United States-Mexico-Canada Agreement (USMCA) rules of origin. However, which automakers will end up being subject to tariffs isn’t entirely clear yet. BMW’s stock (BMW.DE) has experienced fluctuations in response to the tariff uncertainty. Investors remain cautious as potential 25% tariffs could impact BMW’s North American supply chain and production costs.
Despite this, BMW’s stock has shown resilience. Furthermore, analysts are closely monitoring how trade negotiations and USMCA compliance may influence the company’s profitability. Any further clarity on tariff exemptions could drive volatility in BMW’s stock price in the coming weeks.
Earlier in February (21 Feb.), Reuters reported that BMW (BMWG.DE) did not see the need to negotiate a special deal with the United States. As a result, the company decided to proceed without seeking exemptions from import tariffs. According to its chief purchasing officer, the German carmaker’s sizeable presence in the country played a role. Additionally, good relations with the U.S. government contributed to some of the reasons.
However, a spokesperson for BMW explained that vehicles made in the United States and Mexico do not conform to the rules of the trade deal. As a result, these vehicles may be subject to the extreme duties.
A BMW spokesperson said that around 10% of the German automaker’s U.S. sales come from imports from Mexico. In a statement, BMW explained that Trump’s potential tariffs will eventually hit the consumers. As a result, these tariffs will make products much more expensive and less innovative.
South Carolina BMW plant
The biggest BMW plant in the world is in South Carolina as it produces the biggest number of cars and also is a major exporter to global markets including China, Germany, and Britain.
If U.S. President Donald Trump follows through on threats to impose tariffs of around 25% on vehicle imports, the company may have room to restructure production and make more for the local market.
Speaking to journalists at an event at the carmaker’s component factory in Landshut, Germany, Joachim Post said in regards to tariffs: “I don’t see a situation where we need our own deal.” Trump’s tariffs could come into force from 2 April 2 and could be painful for many other carmakers, such as BMW competitors Audi and Porsche.
BMW’s Post said the carmaker’s attitude towards “technological openness” and establishing production lines capable of switching between producing combustion engine, plug-in hybrid, and purely electric cars was paying off.
He added, “The U.S. has always divided relatively when it comes to drive system preferences… that will continue.”
How carmakers are dealing with higher costs
To minimise costs, Mercedes-Benz and the VW passenger car brand are shifting some production to countries in Eastern Europe. BMW decided to manufacture key parts for the upcoming ‘Neue Klasse’ EV cars in two plants in Germany and Austria which will help them keep costs down.
BMW will produce the so-called “Energy Master” in Landshut in southern Germany. This is a control unit for its new generation of batteries, which BMW produces fully. Neue Klasse’s electric motor will be manufactured at its plant in Steyr, Austria.
BMW struggles with waning EV demand
Demand for electric vehicles has declined, despite huge sales reported in 2023 and early 2024. BMW’s sales rose by double-digits in the third quarter, with more than 100,000 EVs sold over the three months up to October 2024. BMW Group, including Mini, sold 103,440 EVs in the third quarter, 10% up from Q3 2023.
In the first 9 months of 2024, buyers sold more than 294,000 EVs. BMW’s electric vehicle sales rose 19.1% in 2024 compared to 2023. In Europe, BMW delivered 121,844 EVs through the first nine months of 2024, up 35.8% compared to 2023. BMW’s iX1 and i4 were the key drivers of the growth.
2025 was not as generous. BMW had to pause its £600m investment in its UK Mini plant after electric car demand dropped. With no charging infrastructure existent and the costs of switching over from petrol and diesel alternatives increasing, consumers have become less interested in electric vehicles.
BMW’s stock (BMW.DE) has reflected investor concerns over declining EV demand, experiencing fluctuations as the company navigates shifting consumer preferences. After strong EV sales growth in 2023 and early 2024, weaker demand in 2025 has pressured BMW’s stock performance.
The company’s decision to pause its £600m investment in the UK Mini plant has further raised concerns about profitability and long-term EV strategy. Analysts are closely watching how BMW adapts to market conditions, as stock volatility may persist depending on consumer sentiment and government support for EV infrastructure.
Pausing £600m investment in Oxford Mini plant
Rishi Sunak’s government prepared the deal, including £60m in taxpayer funding, marking a shift from BMW’s previous plan to export production to cheaper Chinese factories.
They planned to situate the Mini car assembly plant on the outskirts of Oxford. The German carmaker has owned Mini since 2000.
Back in 2023, BMW announced plans to develop its Cowley plant for electric Mini production, with government funds backing the project and securing 4,000 jobs in electric vehicle production.
BMW will now review these plans to manufacture battery-powered Minis at its Cowley site due to the several uncertainties the automotive industry is currently facing.
The BMW Group reported in a statement that they were evaluating the timing for reestablishing battery-electric Mini production in Oxford.
BMW said that Plant Oxford is “at the heart of Mini production, manufacturing and exporting a range of models sought after in the UK and around the world” and that “Much of the investment is progressing, with construction well underway to make the plant future-ready.” One of the projects is a brand-new state-of-the-art logistics facility.”
The company notified the UK government that it won’t take the grant as it has decided to review the timeline while remaining “in close dialogue” with the government about their future plans. The termination of the investment has put BMW’s future at stake, with the automaker to continue paying import duties for longer than expected. Production of the electric Mini Cooper and the electric Mini Aceman crossover SUV was planned to start in 2026 at the site.
UK to go electric by 2030
The Oxford Plant, which employs 4,500 people, will continue to manufacture Minis with internal combustion engines. The plant is expected to become electric-only by 2030. The current Labour government promised to reintroduce former Conservative prime minister Boris Johnson’s proposal to ban sales of new petrol and diesel cars by 2030. Car manufacturers could face fines of up to £15,000 a car if they fail to meet strict quotas on sales of electric vehicles. This year, 28% of UK car sales must be electric – and this allocation is expected to increase every year. Last year, the target was 22%.
A Department for Transport spokesperson said: “We recognise the global challenges car manufacturers face and have listened to their concerns by consulting on reinstating the 2030 EV deadline whilst also protecting jobs – a decision supported by a majority of manufacturers who have been working towards this date, and are on track to meet their ZEV mandate targets.
“We’re investing over £2.3 billion to support industry and consumers make the switch, tapping into a multibillion-pound industry that will create high paid jobs for decades to come, make the UK a clean energy superpower and help deliver our Plan for Change.”
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