BMW shares dropped 3.9% following a weak Q3 report, marked by an 83.8% YoY drop in profit to 476 million euros ($504 million). Supply chain constraints and slowing demand, especially in China, drove a 16% revenue decline and a 12% reduction in volumes, squeezing the adjusted EBIT margin to 5.2% – a sharp drop from the previous year’s 10% level in the core automotive division, now down to just 2.3%. Morgan Stanley analysts highlighted heavy cash flow pressures due to inventory buildup and increased R&D expenses, while China sales plummeted by 30%. Although electric vehicles made up 19% of Q3 sales, this uptick couldn’t offset losses in conventional models. Analysts now view 2025 as a key year for recovery amid BMW’s competitive and geopolitical challenges, despite its strong product pipeline.