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Published : 14 Jul 2026, 12:06 PM
BMW is betting on its long-awaited Neue Klasse electric cars to revive its fortunes in China after two years of declining sales.
The problem for the German automaker is that China's EV race may have already moved on without it.
BMW, under new CEO Milan Nedeljkovic, issued a shock profit warning last month that it partly blamed on China - its third in less than three years. On Friday, it said China sales plunged 30 percent in the second quarter.
Some shareholders and analysts say BMW has moved too slowly to bring its long-trailed Neue Klasse, or "new class," EVs to a market where Chinese rivals are developing increasingly sophisticated electric cars in as little as 18 months - roughly twice as fast as traditional automakers.
"If this had launched two years ago it could have been a game-changer," said Yale Zhang, managing director at Shanghai-based research firm Automotive Foresight. "In today's Chinese auto market ... it is hard to stand out."
Chinese buyers increasingly expect the latest technology from home-grown carmakers such as Nio 9866.HK, which has driven its flagship ET9 sedan over speed bumps with a tower of champagne glasses balanced on the bonnet — without spilling a drop — to showcase the vehicle's advanced suspension system.
BMW's first Neue Klasse model for China, the iX3 SUV, is due to go on sale in November.
Combustion-Engine Heritage in EV-Heavy Market
BMW's challenge reflects the broader struggle facing German premium automakers in China, where the engineering pedigree and combustion-engine heritage that help sell high-margin models in Europe and the US carry less weight with many buyers.
"Chinese consumers no longer buy into that," said Wang Xianbin, vice president of the Gasgoo Research Institute.
Instead, they favour local brands such as Nio, Geely's Zeekr and Xiaomi, which offer intelligent EV features tailored to Chinese tastes.
Chinese premium brands are openly targeting customers of BMW, Audi VOWG_p.DE, Porsche P911_p.DE and Mercedes MBGn.DE.
Only about 5 percent of BMW's sales in China are fully electric, according to Global Mobility data, in a market where EVs account for 46 percent of vehicle sales.
BMW's China sales fell in both 2024 and 2025. Sales at Mercedes and Volkswagen's Audi brand are also down, dropping 28 percent and 19 percent, respectively, in the first half of this year.
Hendrik Schmidt of DWS, a top-10 BMW investor, said direct China experience was limited among the company's top executives and supervisory board, adding that the scale of the challenge had not been fully appreciated.
"From our perspective, the dynamics here have been considerably underestimated," he said.
A company spokesperson said BMW's senior management had extensive experience in China and the company pursued a country-specific product strategy that includes "a greater focus on highly integrated digital services, advanced connectivity features, and rear-seat comfort".
According to Shanghai consultancy LandRoads, BMW's average transaction price in China in 2025 was 341,000 yuan ($50,200), below local brands such as Nio, Aito and Denza. Among German premium brands, only Audi was priced lower, at 287,000 yuan.
BMW lowered some of its list prices in China in coordination with local authorities in the first quarter, the spokesperson said. Independent dealers are also free to set their own sales prices and discounts, she added.
But analysts say price cuts alone are no longer enough. Chinese buyers still want value for money, while Zhang said local rivals are "armed to the teeth with cutting-edge features".
"Chinese consumers today don't just pick a car based solely on deep discounts," Gasgoo's Wang said.
'A Concern From Two or Three Years Ago'
As BMW's former production chief, Nedeljkovic is considered one of the architects of the Neue Klasse, a platform underpinning 40 new launches by next year that has generated encouraging early demand in Europe.
The China launch of the iX3 was delayed after BMW switched from in-house technology to Chinese partner Momenta to provide assisted-driving technology, a feature many local consumers now consider essential.
The spokesperson said BMW has a different approach to so-called China speed, pointing to thorough tests throughout the development process to ensure customer safety.
Gasgoo's Wang said he first heard about the model four years ago but argued the market has changed since then, with BMW's marketing around range anxiety already sounding dated.
"That was a concern from two or three years ago," said Chang Yan, the founder of Supercharged, a popular EV-focused blog on China's Weibo platform.
He said the attributes often celebrated as technological superiority in Europe - handling and performance - do not necessarily resonate as strongly in China, where domestic brands have become "far more aggressive in design and features".
Gasgoo's Wang said BMW's product development remained heavily driven from Munich headquarters and the company did not fully understand what Chinese consumers want.
"Overall, it's clear that BMW is one step behind," Wang said.
($1 = 6.7934 Chinese yuan renminbi)
