BMW expects higher margins and deliveries in 2023 amid electric rollout

German automaker bmw Wednesday has set a target for its automotive segment to slightly increase margins and increase deliveries this year, as it moves forward with the rollout of its electric fleet.

The company said it expects an EBIT (earnings before interest and taxes) margin of between 8-10% in 2023 for its automotive range, deliveries will increase marginally from 2022 and “selling prices remain at a stable level”. ” It predicts that the used car market will return to normal this year “due to the increased availability of new cars”.

“Our high degree of resilience, combined with our operational performance, proved to be an effective combination to ensure the success of the BMW Group, even in the face of adversity, and to take advantage of opportunities for profitable growth,” Oliver Gypse, Chairman of the Management Board of BMW AG said in a press statement.

Like rivals, BMW is grappling with global semiconductor shortages and supply chain disruptions, making it challenging to meet its booked orders.

The company confirmed full-year 2022 results it reported last week, which included EBIT of 10.6 billion euros ($11.4 billion) for its automotive segment, including . 8.6% margin last year. The company posted its automatic cash flow close to 11.1 billion euros.

As a result, it proposed a dividend of 8.50 euros per common share, compared to 5.80 euros paid for the same stock in the previous year.

The company announced the appointment of a new Chief Financial Officer on 9 March, with Walter Mertel due to assume the role in May following the retirement of Nicolas Peter at the time.

BMW’s results come after optimistic announcements from automakers earlier in the week, Porsche issued an ambitious growth outlook following record 2022 earnings and Volkswagen unveiled a $193 billion investment plan over five years.

BMW expects the main growth drivers of its business this year to be its premium models and fully battery-electric vehicles (BEVs).

“Based on prevailing market conditions in the second half of the decade, the evolution of raw material prices and availability, and the pace at which a comprehensive charging infrastructure is being built, the BMW Group expects to reach a BEV share of more than 50%. beyond 2030,” the company said, after indicating its BEV share would hit 15% in 2023.

BMW plans to deliver 2 million fully electric vehicles by 2025 and more than 10 million such units by 2030. The first electric vehicles from the carmaker’s Mini brand are set to hit the market this year, with the Rolls-Royce Specter expected to reach customers in 2022 and 2023 after the Rolls-Royce range launches its first full EV model.

The automaker is ramping up efforts to transition toward electric vehicles, announcing in October that it intends to invest $1.7 billion in its US operations to manufacture such autos and batteries. It introduced a pilot fleet of hydrogen vehicles earlier this year.