Ladies and gentlemen, dear colleagues, welcome to the media Q&A session of the BMW Group Annual Conference. I would now like to introduce to you the members of the board of management. I will start on my right. First, Milan Nedeljković, Production. Next to him, we have Ilka Horstmeier, People and Real Estate. Then to my immediate right, Walter Mertl, responsible for Finance. To my left is our CEO, Oliver Zipse. Directly next to him, Joachim Post, member of the board of management for Development. Next to him is Jochen Goller, responsible for Customers, Brands and Sales. Last but not least, Nicolai Martin, Purchasing and Supplier Network. We will broadcast your questions live. Of course, happy to have you turn on your video transmission. We also ask you to use the raise hand feature if you have a question.
Please note, your video will be visible on the wall behind us until your question has been fully answered. This year, we once again have participants joining us from all over the world. We therefore do ask for your understanding should there be any minor technical delays. Please note, the Q&A session will be held in German. Of course, we will provide simultaneous interpretation into English. You are therefore welcome to ask your questions in English as well. Our board members will then answer in German, and your questions will be interpreted simultaneously as well as the answers. Ladies and gentlemen, dear colleagues, let us begin. Now, that we have covered the organizational part, let's start the Q&A. We will move on to the first question. It comes from Christina Amann from Reuters. We probably will hear or see her in just a second. Hello, Ms. Amann.
We unfortunately cannot hear you just yet. Maybe you're on mute. We still can't hear you, I'm afraid. I'm so sorry, Ms. Amann, we still can't hear you. We might have to circle back to you. Right. We'll jump to the next question. That's Frank Volk from Automobilwoche. Mr. Volk, over to you. Mr. Volk, we can see you. Sorry, it seems we also can't hear Mr. Volk. Now, I'm looking backstage. Are we sticking with Mr. Volk or are we moving on? What do we do? Let's see, maybe we can get some feedback. It should be working. It seems that we're figuring it out. Please bear with us. Also happy to entertain you in the meantime. Of course, we have the entire board of management here. We're still at BMW.
We are at the BMW Welt here in Munich at the annual BMW Conference. We're missing the times when everybody was here in the room because, of course, in that way, everybody was able to just speak to us. We had a fantastic tradition. We always had the Manager Magazin go first. Sometimes we had the Süddeutsche Zeitung from here in Munich go first. With that being said, let me once again ask, is there anything that we can do here to expedite the process? Maybe read out a question. I've now just got feedback that it should work now. We'll try once again, Frank Volk from Automobilwoche. We're once again going to check. Again, Mr. Volk, we can see you, which is one step in the right direction. Right. Now, we can hear you. Fantastic. Your question, please. Right.
Thank you very much. Good morning.
Now, you are the first one. Great to have that experiment finally working. Automobilwoche is now the number one. Yes, I'm very happy. I have three questions. Mr. Zipse, the i3, of course, is coming up next week, but maybe you could talk to us a little bit because it is a special vehicle. Maybe you can tell us a bit more about your expectations and the meaning of this particular vehicle. Second question, in your speech, you were talking about the EU experiment regarding e-mobility, mandating it and that this is probably not going to have the benefits that they would expect. It sounds like you're losing faith in the fact that the EU would get the results that would be beneficial for the industry. How critical is that actually? Or to flip it, what would you expect to ease the tension a bit?
Then to kick things off, I have a little bit of a yellow press question, which you probably wouldn't love, but still. This is now, of course, your last annual conference as CEO. How does it feel? Looking back, are you happy with the results that you're presenting now at your grand finale? Thank you very much, Mr. Volk. I think this really comprises everything that we wanted to cover today, and there's no better person to answer this, especially, of course, the third question, as our CEO, Oliver Zipse. Oliver, please. Right. Mr. Volk, thank you very much for these three questions. I do hope that we have enough time to cover it because the i3, of course, is the beating heart of BMW. It's not the first generation. You know, just wait. We'll, of course, present the i3 next week after the iX3.
We're gonna be presenting it next week in great detail, of course. It is the beating heart of BMW, of the Neue Klasse. We have, of course, rebuilt the entire Munich main plant for years now. It's finished. The cars are being produced. We are very happy with the results, and we are just really happy with the double surprise. Of course, the iX3 has been in the works for the market. You can order it. You can buy it. It's going extremely well. We have more than 50,000 people who have already ordered the car without ever having set foot in the car. Now, of course, we're following that up with the i3. Just wait and see what the car can do, what the different capabilities are, and we're absolutely sure that we're gonna be at the absolute peak of the industry.
Moving on to Brussels, I'm not sure what you mean when you talk about the EU experiment. I didn't say that, but I do know what you're talking about, I believe. That's about what you do in 2030 and 2035 regarding the CO2 regulations. As you know, CO2 is incredibly important to us. The only European manufacturer which at the moment in 2025 has achieved the goals without pooling, without averaging. We simply hit the goals in that particular year. Instead of 92.4 grams, we're actually right under 90 grams, so we even overperformed. We can prove it. We have done it, not just Scope 3, also Scope 1 and 2, just the same. Each and every single year, less CO2. That's our strategy, and it works.
Now, what is important to us is that when reworking the goals for 2035, we don't want to go overboard just because all of a sudden in the main buzzword, technology openness, there's now so much fine print added to that. It's, you know, so much over-regulation in there that it has nothing to do with CO2. The first thing is, of course, the European content, which is phrased in a way that global business models, which are important for the European and especially, of course, the German, and especially for the BMW industry, is so crucial that that just completely cuts out. That is actually an opportunity for Europe because in this way, no other region in the world has it. We're really giving the game away in a way by trying to kind of cut ourselves off from the world.
That's one thing. The other thing is, of course, that they're creating a new class of vehicle, which is great. The question is, what are they doing it for? Why should you get a CO2 credit just because the vehicle is small? Instead of just saying the most efficient cars get a CO2 credit and not just the smallest cars. Then via the incentivization, sure, we have nothing against incentives. I think this is a well-intentioned but wrongly executed project. Then last but not least, only looking at the tailpipe is absolutely not the right thing. Our approach is let's look at the entire value chain from green steel via the supply chain and so on and so forth, really cradle to grave.
Let's add that to the calculation, and then it'll be a fully rounded conversation. In the current conversation, I don't think it is wide-ranging enough. All in all, we believe this is going to lead to a significantly shrinking industry, and we say it because this is very dangerous. Like I said, we are showing that it works. We're showing that there's a different way. The CEO question, well, after 35 years, looking back, you know, at some point the time has come to step away. I think it is now the right point in time. I mean, of course, you can see the entire team that we have set up in the last couple of years that has had great success in the last few years as well. There's, of course, going to be a huge continuity.
Milan Nedeljković, who is here, of course, as well today, is going to be my successor, so he is going to be a steady steward. There's not going to be any sort of disruption that you will see or feel, and I think this is again, very fitting for the BMW way. Personally speaking, it was a huge honor and a huge joy to chair this company, to run this company in the last few years, and I'm going very happy, very satisfied. All right. Thank you very much. That doesn't mean that we're going to wrap up the press conference because, of course, this would have been the perfect way to go. I can say that our CEO is going to stick with us for another while yet. Now, we'll go back to the first participant, Christina Amman from Reuters.
Once again, so sorry for the technical difficulties. We'll give it another try. Good morning. I hope it works now. Yes, it works brilliantly. Fantastic. Good morning. I have a few questions. First off, Iran. What does the Iran war mean to BMW? First off, of course, we're talking about parts, raw materials. Are there any particular raw materials which you received via the Strait of Hormuz that could now run into a bottleneck? Then, of course, also sales. The Middle East is, of course, a very strong luxury market, traditionally speaking, so what does that mean for BMW? Probably particularly Rolls-Royce. The second question, China. Mr. Mertl, you mentioned that in the first half of the year, the initiated measures regarding price stabilization actually had a negative impact. Maybe you can explain a bit more what you meant by that.
What is the outlook for the full year in China, not just regarding sales development, but also regarding the returns and where you actually see the long-term outlook for the Chinese market going forward? Of course, the question is also, is the luxury market there going to recover at some point, or is the world there simply so fundamentally changed to what it was a couple of years ago? The third question is EU regulation. Mr. Zipse, you've made it very clear that you do not go with a pure tailpipe observation and that emissions are also supposed to be balanced by way of e-fuels and green steel. With green steel, we recently heard more and more projects being canceled and stopped. Is there even an opportunity? Are there actually enough of those raw materials?
With e-fuels, do the customers, do the drivers actually accept this fuel, which technologically speaking wouldn't be an issue, but is it supported? Then local content, that's of course the next big topic with batteries. What do you think your opportunities are there to have major advantages and advances? Right. Thank you very much, Ms. Ammon. I'm going to divvy these questions out. Nicolai Martin is going to talk about supply chains, Rolls-Royce, Jochen Goller, and then Walter Mertl, and then we'll do the rest. We'll start, Nicolai, we'll start with you. Right. We are, of course, observing the situation in and around Iran very closely. At the moment, there are no supply bottlenecks because of the current situation. There's also only one direct supply relationship to Dubai for aluminum.
We are absolutely hedged in the long run, and we also have additional supply sources, so there are no impairments of production in this one. Thank you very much, Jochen. On to Rolls-Royce and sales development, Middle East.
Good morning, Ms. Ammon. First off, Middle East on the BMW side is important, but in the global context, and looking at the percentage, it is relatively low. Now, of course, we have only been in this particular conflict for 11 days, so we just have to wait and see. Also, for Rolls-Royce, we are globally well-positioned. Middle East is, in fact, an important market, but yeah, we just have to wait and see and observe what's going to happen in the next few months. We do assume that the situation is going to calm down, that if the situation calms down, the customers would be returning back to us.
This is at a very, very early stage. We can't say too much yet, but due to the fact that at Rolls-Royce, just like with BMW, we have four regions. You know, America is going really well. Europe is an important market. We also assume that globally speaking, we're still well-positioned. Excellent. With that being said, I would like to hand over to Walter Mertl, our CFO, regarding price stabilization in China. Should we have any other open questions, then Jochen, back to you. Good morning, Ms. Ammon. In the second half of the year, we started initiating product measures in China in parallel to stabilizing our dealership network and restructuring it as well. By way of these additional measures, of course, there's a slight negative impact.
However, what we do find and what we do want to stress here is that the transaction prices in the market for our products have stabilized, are stabilizing, and are actually improving slightly compared to Q3. We also see that the product offering is received well. The dealerships are going better and more smoothly. Well, how do we see it? Well, it's because we're of course looking at the budget and the run rate, and sales in the first two months are exactly how we envisioned, and that's why, of course, you also asked about the overall outlook for China. If the run rate continues this way, we have the opportunity to go back to prior year level in China. Thank you very much, Walter. Jochen, maybe back to you. Maybe just a short outlook regarding the Chinese market. Sure. Mr. Mertl just said it.
We see a stabilization regarding the BMW business, since Q4, in fact, and we've actually started the new year quite solidly. Also, there's large product initiative that we've kicked off around the globe. We're of course also doing in China. We have a huge kickoff in April at the Motor Show. We're going to be showing three new models, world premieres. We're also gonna be there with the board of management. We do see a very solid volume development, pricing structures, lots of decisions that we've made at the product, space, product portfolio are showing effect, and we're gonna be having new models coming into the market second half of the year. As of right now, as Mr. Mertl said, we assume that there is going to be, you know, a solid trajectory, and we're aiming for prior year levels.
Thank you very much. The third question was regarding the EU regulations. Are we speaking about green steel and e-fuels as a big opportunity? Over to our CEO.
Well, every single gram of CO2 that we can reduce today is just as valuable, or even more, than one that we can reduce in 2035. I think we should all take a step back and look at the major CO2 emissions and where they come from. It's the fleet. We have, of course, been preparing. We've been prepared to use renewable fuels, and I think the best example is what happens with Diesel HVO100. There are more than 7,000 gas stations in Europe that can do this. So this is really quite widely covered across the board. I think if you just get this particular fuel, you can reduce the CO2 emission footprint by 90% already. So it's already here. It's not something, you know, intangible in the future.
I think that's important, and we don't know why that can't be fed into the regulation. Now, we believe it is important to reduce CO2 across the board, and this of course includes, electro-mobility at a large scale. We've proven this with the Neue Klasse, but we believe this isn't enough. We believe this technology is still going to be a huge step. We once again try to make the case for a wide-ranging approach, which is more important than the current regulation or even a reworked regulation. Local content, well, we say that the European industry is of course an expert industry, and if we take local content seriously, this export share of the European industry needs to be taken into account, which at the moment is not the case.
Thank you very much, Ms. Ammon, for the question. I would now like to call upon the next person. That's Christoph Röhrmaier from dpa, and we can see you. Good morning, Mr. Röhrmaier. Please ask your question.
Thank you. Now, I'd be particularly interested about the staff numbers. If I read this correctly, there was a slight decline last year, and that's expected to continue this year. Is there a reason for that? And is this something that's happening in Germany or more something abroad? And maybe a somewhat blunt question, is there a headcount reduction plan? There's no plans for that at the moment. Is that correct?
Thank you. Ilka Horstmeier.
Mr. Röhrmaier, thank you for that important question. It's not only important for you, but of course also for our employees. Now, let me try and explain it. Now, HR planning is a core of our HR work, and we're always looking at our staff structures also for the future and make adjustments. We have now prepared the Neue Klasse, and we invested in structures and technology, but last but not least, in skills in our employees. In recent years, we've had the biggest training initiatives for software digitalization and of course AI, with around EUR 1 billion investment in recent years. That's incredibly important to do precisely what we're doing now with the Neue Klasse, be it the iX3 or the 3 Series that's soon to be launched. That's very important.
Now, of course, we have to take account of the external markets. With this big technological advance, we've also made advances in optimization of our processes, and we can see this at the moment. We saw this last year, and this will continue this year. We've seen that our automation and digitalization and AI initiatives are bearing fruit, and of course, that has an effect on staff requirements. That was the case last year and will be the case this year. It's important for me to emphasize, we are using our existing HR tools and using the modules that we've been using in the company for years, and we take account of natural fluctuation as well. Very important, perhaps, one last remark. Employment is secured at BMW, and we will continue to offer apprenticeship and training positions.
That's important for our future and for young talent. That's incredibly important there. That's referring to the last question. No.
Thank you. That was the question from Christoph Röhrmaier from the dpa. The next question is from Sebastian Esch from Financial Times. Hi, Sebastian.
Yes. Good morning, everyone. I've got three questions. Now, you are forecasting a downturn for this year because of the effects of tariffs in comparison to last year. What's the reason for that? Because some car makers are saying that there will be greater effects there. So can you explain why you don't think it's gonna have such a great effect? The second question, you have a large range of drivetrains, including hydrogen drivetrains. So will there be range extenders as an option in the near future as well? And on the question of e-mobility, you expect a market share for this year that will be more or less the same as it was in 2025. Can you perhaps outline why there won't be any fluctuations there this year? And can you perhaps also outline whether there'll be any regional changes there?
What's the score in Europe in comparison to the USA, for instance, or in comparison to China?
Thank you. We'll begin with Walter Mertl regarding the forecast, and then regarding the drive mix and range extender, we'll have our development member.
Yes. Thank you, Mr. Esch. In our forecast, we posted what we can expect from the tariffs, and we assume that in the first half of the year, we won't see any changes. That is to say, around the 1.75% that we saw in the third quarter in our P&L. We expect that to remain. In the second half of the year, we assume that there will be new agreements. On the one hand, an agreement between the USA and Europe, and that Europe will finally sign that we will then have 0%, and B, that there will be positive agreements made between the USA, Mexico, and Canada and further nations as well.
Given that, we assume that the full year effect that was at 1.5% last year in 2025, we assume that in 2026, we will be at 1.25%. Thank you. Walter Mertl. Now we'll talk about the drive mix. I'd like to pass this over to our board member for development. Thank you, Mr. Esch, for your question. You know that technology openness is one of the main pillars of our strategy, and that's why we fundamentally offer all drives from combustion to plug-in hybrid to all electric. Now, the X5 will be provided with the fuel cell as of 2028 for the first time. Why? Well, because we are convinced that that will be a further alternative that will be needed for climate mitigation, climate change mitigation.
We think that fuel cell technology can make a contribution there. With the Neue Klasse, we have our sixth iteration of the battery cells, and we have made a huge contribution here to range. We don't think that there is any cause for concern about range there. If we have a range of far beyond 800 kilometers and 400 kilowatts charge power, we're of course keeping an eye on all of the options out there and seeing whether range extenders are something that we need to integrate into our portfolio. At the moment, particularly with what we have with the Neue Klasse, we think we're in a very good position without that. Thank you. The last question was regarding to e-mobility and market shares this year. Jochen Goller. Thank you. Now, growth is always looking at the baseline as well.
In 2025, we had a very high baseline. Now, you know that, we had around 18% market share and 25% electrified. This year, if we look at, Europe, we're above 40% electrified vehicles when we're looking at the share of volume. That baseline is very high. We want to achieve growth with the Neue Klasse. You're correct in saying that there will be regional differences because of course the Neue Klasse will first be launched in Europe and in the second half of the year in the USA and towards the end of the year in China as well. Thus, this year we are aiming at, strong growth in volumes in Europe. Then in the following years, as the Neue Klasse is, rolled out, we seek to, grow more there. Thank you.
I would now like to also read a written question, and this is a question to Milan Nedeljković, production. What's the score with the rollout of the Neue Klasse and X5 and X7 this year in America? Can customers expect punctual deliveries? Thank you for the question. In recent years, we have prepared our global production systems for the launch of the Neue Klasse, but also for all models that will follow. We're set in our new plant, we started production, and we are starting to scale production there as well, so that we will be able to provide the X3 in accordance with market demand. At the same time, the Spartanburg plant is preparing for the new models, and all of the preparations are on time. We will be able to ramp up production there on time as well and deliver on time.
Thanks to the good demand for our vehicles, the plants have a lot of orders. Thank you, Milan Nedeljković. The next question is from Stefan Radomski from the Süddeutsche Zeitung. Yes. Thank you.
Good morning to everyone. Two questions regarding the end customer. On the one hand, Mr. Mertl, you were talking about a pricing pressure which you'd already felt last year. Perhaps you can be a little bit more specific about that as to whether that is the same across the world and whether it's the same across all of the different drivetrains, or what is particularly subject to pressure there. Secondly, you expect decreasing residual values for used cars. Here again, the question, will that be the same across the entire portfolio and for all drivetrains, and to what extent?
Based on that question, what does that mean for leasing rates? What do you expect in that regard? Because the electric market is pretty much driven by leasing, at least for private customers. A decline in residual values would then generally mean that there would be increasing leasing rates. Will it be cheaper to buy an electric vehicle, and will it be more expensive to lease a Neue Klasse? Pricing pressure is not the same everywhere in the world. Of course, there are regional differences, and in our forecast, we particularly looked at China. You know that in the last two years there have been some quite intense differences in prices there. Since the third quarter, we've been able to address price stability, particularly with the product measures that we've taken.
Regarding residual values for used cars declining, well, we need to relativize what a decline means there. I would say that they're less positive than they were in 2025, where they were positive, and in 2023, they were more positive than in 2024. We see that the extra profits are going back, going down gradually, and this was all due to availability, and we're seeing a downturn there. You can see this in all of the different indexes in the USA, but they're still positive, but not as positive as in the previous year. Whether that's the same everywhere, well, we do indeed see, to an extent, a trend for all-electric vehicles and for combustion vehicles that they are relatively stable, but there are regional differences here as well. It's not the same across the world.
A different situation in Europe than in the USA. Leasing rates, of course, don't only consist of production costs, but it's also a question of competitiveness. If you have very convincing products which are in high demand, then, of course, that will have an effect on leasing rates, and that doesn't have anything to do with residual values. Thank you, Mr. Radomski from the Süddeutsche Zeitung. I'm happy to hear some optimistic opinions from our CFO. The next question is from Stephen Wilmot, The Wall Street Journal. Hi, Stephen.
Stephen?
Stephen?
Hi there. Thank you for the opportunity. First question, it would be great to have a bit of an update on margin, on the question of margin parity between EVs and conventional drivetrains. Secondly, which is a bit related, I guess, what is your margin outlook, do you expect to get back to, I guess, what we would have once considered normal levels of maybe 8%-10%, anytime, you know, within the medium term, or can you give us any idea of longer-term margin outlook, given that you've got this 4%-6% for 2026, you know, in the context of, I guess, rising EV share and this question of margin parity.
Just thirdly, it'd be great to hear your thoughts finally on advanced ADAS, and it was recently reported that you've deprioritized or the so-called Level 3 program in and obviously you've got these partnerships with Momenta and Qualcomm, which are more focused on kind of point-to-point urban mobility. It'd be great to understand where you're at with that and the timetable for rolling that out in a more comprehensive way. Thank you.
Thank you, Stephen. We'll just try and summarize here. It was the margin parity between electric vehicles and combustion, then long-term margin outlook. Walter Mertl will deal with those questions. We came to some technical questions. Our head of development will talk about that, particularly at Level 3, the ADAS system. We'll begin with Walter.
Hello, Mr. Wilmot. Now, regarding margin parity, last time at the IAA, we were able to talk about that, and it still applies. Regionally, we do see differences. If you work in lots of different countries which are subject to tariffs, then margin parity will not be something necessarily that we can say it's optimistic for the future. In Europe, it's pretty good. Margin parity, particularly with the Neue Klasse, is possible.
That's why over recent years, our engineers have been very happy to work together with our CFO, and we've all worked together to achieve this margin parity. Then this return to the 8%-10%, now that is our strategic goal for cars. You know that there are lots of influences that making it perhaps more difficult to achieve that, be it tariffs which have an overproportional effect or exchange rates which aren't necessarily great at the moment either. Our clear goal, our clear plan is, however, obvious. We're working on all of these elements. You can see from the year 2025 that we were paying particular attention to fixed overheads, but also investment, and that will continue to play a role.
In 2026, we will pursue that, so that on the performance and production costs and overhead side, we will be on the ball. When this all comes together in the medium term, that will have an effect on achieving the 8%-10%. Thank you, Walter. That brings us now to the third part of the question. That was the question about the ADAS system and the partnerships with Momenta and Qualcomm. I would like to ask Joachim Post to deal with this question. Yes. The Neue Klasse, Mr. Wilmot. We will really be able to launch the next level of the ADAS systems. We call it smart, symbiotic, and safe. This is a unique driver experience. It intuitively involves the driver in the whole system.
We have the hands-off system on motorways up to 130 kilometers per hour. That's now been enabled in accordance with the provisions, and we are now, as you correctly said, focusing on Level 2 and Level 2+ systems in Europe and USA with the Qualcomm partner. In China, our partnership is with Momenta. With the launch of the Neue Klasse, we want to have an end-to-end function. That's the Level 2+ system that we want to integrate. They're very attractive systems for customers. They're in high demand with customers. Why? Well, because the sensors that they have on board with all of the safety systems and all of the regulations in the vehicle, we've been able to fulfill all of the provisions.
We had the Level 3 systems in the vehicles, but we realized that the demand for this was not currently at a stage where we could be profitable, and we have to be profitable in our business, of course. That's why we no longer have a Level 3 offer. That doesn't mean that we are going to continually disregard higher levels. As soon as we have business models that are feasible, we will pursue them. Thank you. The next question is from Martin Hesse from Der Spiegel. Mr. Hesse, please.
Good morning, everyone. Thank you for the opportunity to ask these questions. A specific question about China and last year. Now, you had a sales downturn that you posted. Perhaps you can split this according to BEV and other drivetrains.
Perhaps to be more specific, did you see a downturn in BEV sales? I understood that you weren't necessarily expecting a huge sales effect from the Neue Klasse, but rather that you expect that to kick in in coming years. Perhaps you can provide us with more of an outlook for the coming years, perhaps also Mr. Nedeljković, as the designated new CEO. What you're expecting for 2027, 2028, perhaps also for USA and China, whether you think that there will be a ramp-up of BEV there as well, which will help. Then perhaps a question on a slightly different tack. We see that Chinese manufacturers, or it's expected that Chinese manufacturers are gonna engage in a further offensive in Europe. What do you think they will achieve? Do you think they'll be able to secure new market share?
Where from? Who from? Do you think that you'll be able to defend your market shares here in Europe and elsewhere?
Thank you, Martin Hesse. These questions will all go straight to our head of sales because he is responsible for that. One, two, three.
Good morning, Mr. Hesse. China BEV sales. Indeed, our BEV sales did decline a little bit last year, but we were aware of that. We were speaking about pricing pressure, particularly in electrified vehicles. We didn't follow all of the pricing measures there. We did hold back in some segments. With the Neue Klasse, which will be launched in China at the end of the year, and we're sure that that will be very well received there, and we think that that will lead to growth.
That's something that we will particularly see, however, in the books next year. I won't tell you any specific figures for our outlook now, of course, but we are aiming to grow. We have invested many billions of euros in lots of new products and new models, which are either completely new or that have been significantly upgraded. That's why we seek to grow in all regions, and that's the advantage that we have. We are global, and we want to grow in Europe, we want to grow in China. We see significant potential in the USA, where we have a good position, and also in what we call the rest of world. Those are the markets that are not covered by the other markets, but I'm not going to tell you any specific figures.
On the question of Chinese manufacturers, let me turn this around. A few years ago, the Japanese came to Europe, but BMW continued to grow, and then the Koreans came, and BMW continued to grow. Now the Chinese are coming, and I'm sure they will be able to secure market share for themselves. From whom? Well, I think that's a question for other OEMs. We will continue to grow with our product lineup, and we will also have these new launches, plug-ins, BEVs. We think also combustion engines will not only remain stable with market share, but we think they will be able to grow there as well. Similar to the Japanese and Korean manufacturers, I'm sure the Chinese manufacturers will be able to conquer some market share, but we assume that it won't come from us.
Thank you for that clear question, and thank you, Martin Hesse from Spiegel. Next question is from Felix Stöppler, Handelsblatt.
Good morning to Munich. I have a question on two specific topics. Number one, the situation in the Middle East. Can you just take us on this journey on to the board level? How do you have these discussions? Is that just a daily topic, geopolitics in general? And also, how do you deal with that as the CEO, Mr. Zipse, as the Chairman of the Board? Also, on the levels below the Board of Management, are there any specific teams that don't just deal with any conflict situations, but that also, for example, monitor tariffs on a daily basis? And what is their result? What are their outlooks? The Neue Klasse, Mr. Mertl, follow question on the margin parity. You said it's possible.
Until when, particularly with the i3 and the iX3, especially compared to the, of course, the combustion engines, until when it can that be a reality? How does the growing EV market in Europe support also your Neue Klasse, especially in Europe, of course? First, Mr. Zipse and then Mr. Mertl. Right. Thank you very much, Mr. Stöppler. We had a similar question before. Just to summarize, the situation in the Middle East is so young, so fresh, so brand new that any and all forecasts regarding what that could potentially mean for the full year is a full speculation, and that's what we would be fueling.
Now, what happens, whether it's semiconductor bottlenecks or any sort of an event or in terms of a natural disasters or any political upheavals, the first thing that happens is that we go into the supply chains, we go all the way down to the raw materials, and we're taking a very close look at every step. It's very important that this particular muscle that we've trained springs into effect, which is, of course, creating transparency across the entire supply chain. At the moment, and let me just repeat that, we have no interruptions in the supply chains. The markets are also still quite stable. An outlook in terms of when the situation would be over, what the overall impact could be on the full year, it's way too early, and it also would be pure speculation. Thank you very much.
The second part of the question is on the Neue Klasse and the margin parity. Walter Mertl, please. Sure. Happy to repeat what I said previously. In some markets in Europe, already in the here and now, actually since this Saturday, we've had margin parity with the X3 brother. It is reality. It's not in all markets, and of course, the question is exactly what you're comparing to. Are we comparing the i3 combustion versus the X3 or the X3 versus the iX3? Depends, but in some markets already today, we have the margin parity. Thank you very much. That's Felix Stöppler from the Handelsblatt. Next question is from the Börsen-Zeitung, Joachim Herr. Let's see if the audio signal works. So sorry, Joachim, we cannot hear you at this moment. So sorry. We can't hear you, Mr. Herr.
We'll circle back to you, and we'll head to the next question for now. Who's up next in line? Andreas Höß. Münchner Merkur. So, Mr. Höß, over to you.
Good morning, and thank you very much for having me. Just two follow-up questions. Number one, it's about the BEV share in the ongoing year, because I was also a bit surprised by the fact that you don't expect any more than 18% despite the introduction of the Neue Klasse and so on. So maybe you can just comment on that a bit more in terms of why that is. Does that really only have to do with the delay or with the step launch across the world, or does it have to do with anything else, technical situations, the political framework, whatever have you? The second follow-up question is on people.
Unlike other large German manufacturers, you don't have any job cuts, but maybe still on temps. That's of course something that is very much a variable entity when things go better or worse. Regarding temporary workers, are those numbers fluctuating? All right. Thank you very much. We'll start with Jochen Goller. Good morning, Mr. Höß. Now, for one, of course, the development of electromobility is very different across the world. In Europe and in China, it's very strong. In the United States, it is relatively muted. That is not the reason for our outlook on prior-year level, because in fact, it's really the Neue Klasse ramp-up. We have started now in Debrecen. We are particularly, of course, applying to the European region, and you're going to be seeing a significant growth in the E-vehicles.
Then in the second half of the year, you're also going to be seeing more supply trickling into the United States, and then from the United States, pardon. At the end of the year, also from China. It's the story of the ramp-up. We're starting with the iX3, the i3, which of course we're gonna be introducing, is also only going to hit the shops at the end of the year. That's why the impact is going to be visible from full year 2027. This year, you're going to see very different regional impacts and numbers across the board, but still on prior year level. Again, you just have to see that we're coming from a very, very high level, right? We're already at 18%, 25% of electrified vehicles.
We're going to maintain this, and then next year we're going to grow across all regions. All right. Thank you very much. Part two of the question was regarding people and temp workers. Mr. Höß, I already said our HR structure is relatively or very flexible, I should say. We're using all flexible instruments, of course, you know, the working time accounts, also temporary workers, anything you could have. Of course, temps fluctuate wildly, both in terms of utilization, market demand, the individual sites. It's always going to go up and down and flexibly adjusted. That's why it would be unprofessional to give you a hard number for a particular deadline. I would still like to comment on the fact that we are going to be using this instrument for flexibility.
I believe it's also a beautiful opportunity to give the people who are temp workers in the company that they can actually seize the opportunity to start working at BMW. We've done that for hundreds and thousands of employees across the company in the last few years, and I think it's a really nice building block for both sides of the equation. Thank you very much. We are now moving on to Tim Rokossa from Bloomberg. Hi, Tim.
Good morning. Thanks so much for taking my question. I just wanna take a moment to have a kind of a big picture question. In recent years, you guys have gotten a lot of credit for being quite pragmatic with your EV plans in a time when the transition has been rather bumpy, to say the least. Now that you're ramping up the Neue Klasse, I'm curious if you could sort of just look out a little bit over the next five or 10 years and say what's different about the demand picture now globally that makes this the right time for this ramp versus, say, in the 2015 - 2025 period, A.
Then, B, I read an interview with Mr. Zipse recently, where he talked about by 2030, it's very plausible that the BEV share could jump up maybe even to 50% for BMW, but after that, the growth might slow down. If you could just maybe explain why you see that as a potential trajectory.
Danke, Tim. Oliver Zipse.
Thank you very much, Oliver Zipse. Sorry, Tim. Let's have a look at last year, of course, we had 18%. If we assume that with the Neue Klasse, there's definitely going to be a push, first in Europe and then rest of world. Let's assume that we are going to triple our volume in the next four to five years, right? I'm not even going to look at 10 years. Let's look at four to five years, then it will be around about 50%, globally speaking. Tripling anything in our industry is enormous because we always forget the scaling, right? Everything is large, global, incredibly complex in our industry. Let's assume there is a tripling. In many regions of the world, you're going to hit the actual limits of infrastructure, the limits of customer demands.
At this point, especially also driven by the Neue Klasse, in this segment, in the next few years, with the different vehicles, we definitely see significant growth. Then at that point, and I'm really speaking of a global average, I'm not talking about individual countries, because individual countries, there's going to be individual countries that are going to end up somewhere at 100%. If you look at China, Europe, rest of world, and then particularly if you add the United States, where at the moment this is really slowing down, then 50% global market share is very, very much in just such a short amount of time.
Then we can expect and of course, you know that we are a technology open company, then there is going to be a moment when an equilibrium comes into play, when other drive trains will reposition themselves, right? There might be a fifth drive train situation that is not so much dependent on battery technology. You're going to be needing drive approaches that have a mixed approach, like plug-in hybrids, range extenders. Those things are gonna grow more. So I think the outlook from you said it was pragmatic. We call it customer-oriented. I think from that particular perspective, to end up at around 50% is simply not unrealistic, and that's why also in 2035 and then following.
For the regulation, we try to really make the case for remaining technology open, and we try to really make the case for focusing on the tremendous strength of the German automotive industry as an export industry to not underestimate it and to not initiate anything that could jeopardize this particular position in the global market. Thank you very much. With that, we are wrapping up our press conference. I would like to thank you all very much. These were the excellent questions at the BMW Group Annual Conference 2026. Again, thank you very much for joining us. Just a quick note, our second Q&A session with Oliver Zipse and Walter Mertl will begin at 11:00 A.M. This is going to be aimed directly at the analysts and investors. Stephen Reitman is going to be the host of that particular event.
With that, ladies and gentlemen, and dear colleagues, thank you very much for your interest and for having joined us at this call. Thank you very much for also having turned on your cameras by and large. Once again, so sorry for the technical glitches at the beginning, but of course, at the very end, everything worked seamlessly. Thank you very much. All the best from Munich and all the best from everyone here on stage. Thank you very much and see you next time.