Importance to electric cars amid Russia-Ukraine situation and chip crisis: BMW

BMW on Wednesday cut its 2022 profit margin forecast for its auto unit, saying it expects the chip crisis to last a full year and warning that the Russia-Ukraine conflict will exacerbate supply chain disruptions.

Moreover, Reuters reported that despite a semiconductor shortage last year, BMW sold a record 2.52 million vehicles and had expected higher sales this year, but now expects production to be flat with 2021.

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However, BMW Chief Technology Officer Frank Weber said the company’s goal of increasing EV production remains unchanged, with plans to more than double EV sales to more than 200,000 this year and 2 million EVs by 2025.

BMW’s purchasing chief, Joachim Post, said the company would establish five new battery factory partnerships near European, Chinese, and NAFTA regions where electric vehicles are produced, without giving details.

Due to the Russian-Ukrainian conflict, BMW now expects EBIT for its automotive business to be 7%-9%, rather than 8%-10%. Production at some of BMW’s plants in Germany was suspended following the Russian-Ukrainian conflict, but full production will resume next week, BMW production chief Milan Nedeljkovic said. 

BMW said further disruptions were expected, although the company was still able to source some parts from western Ukraine and was in talks with suppliers in other parts of the world to maintain production.

Furthermore, rising raw material prices could cost the company hundreds of millions of euros this year, Chief Financial Officer Nicolas Peter said. However, Joachim Post said the company expects to maintain supplies from Ukrainian suppliers in the medium to long term.

(via)