BMW is reportedly “postponing” EV production in May, according to a memo sent to U.S. dealers. This decision casts a shadow over the immediate future of BMW’s electric vehicle offerings in the United States. While specific models affected remain undisclosed, the move is widely believed to be a direct response to impending import tariffs that threaten to inflate prices and potentially dampen demand. This strategic pause reflects BMW’s cautious approach as they navigate the complexities of international trade policies and their impact on the burgeoning EV market.
In 2024, BMW experienced considerable success with its EV sales, particularly with models like the BMW i4, which nearly cracked the top ten best-selling EVs in the U.S., delivering over 23,000 units. These sales accounted for almost half of BMW’s total EV sales in the country. However, the introduction of substantial import tariffs poses a significant challenge to maintaining this momentum. The postponement of EV production suggests that BMW is recalibrating its strategy to mitigate the financial impact of these tariffs.
Currently, BMW does not manufacture any electric vehicles within the United States. All BMW EVs sold in the U.S. market are imported from Europe. This includes the BMW i4, BMW i5, BMW i7, and the BMW iX. Despite the iX being an SUV, which are often produced at BMW’s Spartanburg plant in the U.S., the iX is manufactured in Dingolfing, Germany, alongside the i5 and i7. The i4, BMW’s top-selling EV, is produced in Munich.
The report also indicates that BMW intends to maintain current pricing levels through June, with the exception of the 2 Series coupe and M2, which are imported from Mexico. This suggests that BMW is absorbing the initial impact of the tariffs to some extent. However, the long-term strategy involves shifting production to countries like Mexico and the U.S., where they plan to manufacture Neue Klasse EVs. The first of these new-generation EVs is expected to debut later this year.
| Model | Current Production Location | Impact of Tariffs |
|---|---|---|
| BMW i4 | Munich, Germany | Price increase likely after June |
| BMW i5 | Dingolfing, Germany | Price increase likely after June |
| BMW i7 | Dingolfing, Germany | Price increase likely after June |
| BMW iX | Dingolfing, Germany | Price increase likely after June |
BMW’s long-term strategy to mitigate the impact of import tariffs involves a significant shift in its production footprint. The company plans to commence manufacturing Neue Klasse EVs in both Mexico and the United States. Production in Spartanburg, U.S., is slated to begin by the end of 2026. This strategic move aims to reduce reliance on European imports and potentially lower the cost of EVs sold in the U.S. market. However, even with local production, BMW will need to address the challenges of sourcing components, as tariffs on imported parts could still impact the final price of vehicles.
To minimize the impact of tariffs, BMW may explore options such as increasing localized parts production. This would involve establishing partnerships with U.S.-based suppliers or expanding its own manufacturing capabilities within the country. Alternatively, BMW could choose to scale back its EV sales in the U.S. market significantly, hoping that the current administration will eventually roll back the tariff policy. Both options present considerable challenges and would require substantial investment and strategic planning. The future of BMW’s EV strategy in the U.S. hinges on its ability to adapt to the evolving trade landscape and optimize its production and supply chain operations.
