Colleagues, welcome back to the second part of our half-year report. We'll now continue in German. After the short break just now, we're now looking forward to taking your questions. As always, you'll be provided with some technical instructions before we then begin with the first question. Ladies and gentlemen, we're now beginning the Q&A session. If you would like to ask a question, please raise your hand using the function at the lower bottom of the screen. If you've dialed in by telephone, push the asterisk button and nine. Then you will be given the opportunity to ask a question in the order received. As soon as your question has been announced, you can ask it. In order to withdraw a question, just put down your hand using the function in the Zoom app. If you are on the telephone, just press the asterisk button and nine. Thank you. In just a minute for the first question. First question comes from Christina Amann from Reuters. Please unmute yourself now. Good morning. Herr Zipse, Mr. Mertl, thank you for allowing me the first question. I hope you can all hear me. Yes, we can hear you, Ms. Amann. Wonderful. Other question relating to the tariffs. Perhaps you can quantify. How much did the tariffs cost you in the past quarter? I mean, these are the two topics, aren't they? U.S. tariffs and the Chinese tariffs. Second question, also on tariffs. The agreement of the E.U. and the U.S. means 15% import tariffs into the U.S., 2.5%, and later 0% for goods coming from the U.S. going into Europe. Perhaps you can provide some clarity as to what that means for you and how you will perceive it. Will the positive or the negative effects prevail, or are they more or less balanced? Then in your forecasts, you made reference to mitigating measures. Perhaps you could explain what is meant by that. Does it mean price increases, or what's the strategy that BMW Group is pursuing here? Thank you. Thank you, Ms. Amann. We've understood all of your questions. Mr. Zipse will begin later than Mr. Mertl. Good morning, Ms. Amann. Let me just say something more general on the tariff discussion. Free trade and international cooperation are extremely important for all industries globally. There's not a single technology that would be able to survive without global trade. Obviously, that's something that's often neglected when we talk about tariffs. These global links, that network that is just there, that's something you always have to bear in mind when you talk about tariffs and talk about how you can be more resilient, how you can protect yourself. I mean, any type of tariff, no matter in which direction, leads to higher costs and disadvantages for all consumers. That must be emphasized. Therefore, the fewer trade obstacles, the better it is, especially for companies doing global business. This is why we're always much in favor of reducing trade barriers and tariffs. Now, returning to the current ongoing discussion. Of course, we welcome the general agreement between the European Union and the U.S. to reduce tariffs on both sides of the Atlantic. That's a good thing to begin with. It's good what's been achieved. You don't need to talk bad about it. Now, the next step is to finalize the measures agreed on and to implement them. We are supporting the European Union explicitly in this respect, especially the E.U. Commission. With a clear reduction of imports all down to 0% would reflect the fact that more than 80% of cars from the U.S. is actually made by German companies. It's in the interest of European companies to really bring the E.U. tariff to zero without any restrictions by further technical parameters. This is why we will also support this being made possible. We would like to appeal to both sides to continue to work on opening the markets and also on working on the convergence of technology rules. Walter Mertl will now briefly say words on the financial repercussions. Hello, Ms. Amann. In the Q2, the effect is reflected in about two EBIT percentage points. That's the impact we have here. On 7th of May, we said this is the major impact in the Q2 because this is where the largest tariffs applied. What we had expected was that in the Q3, tariffs would be reduced due to trade agreements between the U.S. and the remaining states. This is actually what happened. The UK reached an agreement, does an agreement with the E.U. as well. Some might be a little irritated by it, but if you look to the homepages of the White House or the E.U. and you see the conclusions, we're seeing quite clear and strong words. First of all, we're saying that for vehicles and for vehicle components, import into the U.S. will be exposed to 15% tariff, and there'll be 0% for goods going into the E.U. 1st of August is from when on this will apply. Now, mitigating effects. This is something we've already been using. This relates to the footprint of our plants and the supply chain. It's not the same for all manufacturers. You know what ours is. Of course, let's also not forget that a free trade area in the U.S. is still intact. We're selling from the Spartanburg plant more than 50% out of the U.S. We're exporting, and because it's a free trade area, no tariffs apply to those. That's zero tariffs, and that applies to us as well. Others might export other percentages, and there's other effects. The 3.75% according to the executive order also apply to us for cars produced in Spartanburg. Obviously, that also applies to us, and that's also a mitigating measure. Thank you. Thank you. Next question, please. Next question is by Markus Fasse from Handelsblatt. Good morning, gentlemen. I'd like to stay with the topic of tariffs as well. Mr. Zipse, like the rest of the German industry, your hope is that more can be achieved in those agreements, the offsetting model, so that imports and exports from the U.S. could sort of be balanced or offset against each other so that we're much better off in the end compared to what has been achieved now. Question, do you still see any chances that this offset model, imports and exports to offset one another, that that could still be realized? What would that mean for you? What would that mean for you What would that mean for you then? That's my first question. The second question, what does it mean for the relationship between the U.S. and Europe? Has the economic area of the two been strengthened? Do you expect there'll be more investment from your industry in the U.S.? What can the possible answer of the E.U. be? Do we have to reconsider how we can improve the attractiveness of the location? What does the E.U. now have to do? Because this deal, all in all, is at a disadvantage for the European industry. At least that's how it is perceived by many parties. Thank you. Thank you, Mr. Fasse. I'll pass it on to Mr. Zipse. Your first question, the offset logic. You see, politics is always about what's feasible. I think what's important now is to take the first step, which is now in sight, and to agree on it, namely reducing tariffs on both sides. That would be a first important step. Whether or not in a second step we'll conclude yet another offset agreement, that's something you can also do on a bilateral level. It doesn't have to be part of a major package. You can also do it directly between two countries. This executive order on Section 232, that's actually something that's been passed unilaterally. Perhaps we could renegotiate it bilaterally, but it would actually not include that into the big deal we're currently negotiating. I think it's unrealistic. That's not a problem because these bilateral reductions of tariffs are much more important. Now, as far as the U.S. is concerned, the investments that are to be made, we already made those many, many years ago. We're actually 15 years ahead of everyone. In the past 30 years, we already sold more than $7 million or made more than $7 million vehicles in Spartanburg, and we already invested $15 billion there. We more or less anticipated everything that was happening now. Not that we knew it was going to happen, but this local-for-local approach, that's always the right thing to do. We did it in the U.S., we did it in China, and we're also doing it in Europe. Just to give you the picture, at the same time, we're investing more than $2 billion as we speak in the U.S., and at the same time, we're investing an even higher amount in Germany. Think of Illbach, Straßkirchen. Think of the refurbishment of the plant in Munich or the entirely new plant in Hungary, the high F&E investment here in Europe. Now, where we really need to be careful is that we do not actually favor one nation over the other. No, Europe is the region that has the best network, and that's the business model we need to strengthen. It would be entirely wrong to believe that we can do more in the E.U. to strengthen that location so I'm able to export more. That would be the wrong path because all of this is happening at the same time. On the level of technology, the world is entirely interconnected anyway, and that's something you always need to distinguish. Trade with finished products follows its own laws. Obviously, and that's something we've been preparing for for many years, this will be increasingly localized. On the level of technology, the opposite is happening. Because of fast technological progress, the interlinking becomes stronger all the time. Look at the semiconductor industry. Look at battery technology. Globally, this will be stronger and stronger interlinked. This is actually the opposite of what you would assume, and you just have to be clear about it. We're trying to. Communicate this and tell politicians about this, that this is actually a large advantage that Europe is cooperating with the world and establishing links. We're not preventing investments abroad, but German companies are true global players. This is an advantage and not a disadvantage. It's these mechanisms you have to be aware of in order to strengthen Europe. Thank you. Next question, please. That's Christoph Römer from DPA. Please unmute yourself now. Good morning. A lot of my questions have already been asked, but there's two things. Number one. Tariffs. In the U.S., these have so far not been passed on to customers. Will you change that now? If I've understood what Mr. Mertl said earlier, and I just did a bit of math on my pocket calculator, in Q2, there would be roughly EUR 600 million extra burden by tariffs. Can you tell us how that is subdivided, how much of that is China and how much of that is U.S.? Thank you, Mr. Römer. The question goes to Mr. Mertl. Hello, Mr. Römer. If we start with pricing, that's decoupled from the cost. Pricing is multidimensional. It's not the same in China as it is in the U.S., in Canada, or whatever. It's just the market. That's the first thing we need to take into account. Otherwise, all of the projects, the things we're planning, and how and where we're acting, obviously, we do not talk about commercials publicly. Our competitors are also thinking about what they want to do, and we're thinking about this. This is not so much related to tariff effects. This is something we do every day, every month when we launch new products. In every market, we consider things well. We've got our own methods, and we define our prices. Now, regarding the split of the tariffs, of course, different tariffs act in different countries. I'm not going to talk about that in detail now, so please understand. Thank you, Walter. Next question, please. Next question comes from Stephen Wilmot from The Wall Street Journal. Just turn the microphone on now. Hi there. I'm sorry to hark on about the business of tariffs. Thank you for taking my question, but just a bit of, just a couple of clarifications, if I may. I'm struggling to reconcile the guidance. For the full year, which you said 1.25 percentage points, or based on the current analyst consensus, that would be about one and a half, a little over EUR 1.5 billion. It's quite a big difference from. The EUR 1 billion that you gave in your outlook in March. I appreciate a lot has changed. Also, you've been helped as well as hindered by some of the changes. Can you just help us square that EUR 1.5 billion number? Presumably, it is about right. What's changed, I guess, since you last gave your tariff update? In the context of your saying that everything has been fully anticipated and nothing has changed in your guidance, I'm just trying to understand how that difference has come about. Secondly, does your current guidance include 0% tariffs on the shipments of your vehicles from Spartanburg to the E.U.? There's a bit of ambiguity in the kind of news reports around this, so I just wanted to know what you're factoring in. Thirdly, does that question of the E.U. tariff on U.S. exports, or imports from the U.S., I should say, does that answer your question about export credits? You've talked a lot about getting some kind of offset arrangement with the U.S., but is that essentially, is that question of offsets basically answered by the question of what the E.U. tariff on shipments from the U.S. is? Or are you thinking about that separately now? Thank you. Answer will be in German. That's what I'm at. Now, regarding guidance that we've given so far for the expected tariff impact, this was always only in respect of EBIT margin. Both in March and in May, I spoke about one percentage point impact on the EBIT margin. The number in EUR that you referred to, that didn't come from me. We're still talking about one percentage point in terms of EBIT margin. So much on the first question. Question two regarding 0% in tariffs on E.U. imports, yes, we're factoring that in in accordance with what I said before, starting 1st of August. However, in our P&L, let's not forget that the goods that we're importing on 1st of August will not be sold right away and will not be posted in the P&L. I'll still have goods left, and it'll take some time, and there will be corresponding effects, but that's fully taken into account in our guidance. Now, regarding the offset logic. We strongly advocated this, and Oliver Zipse mentioned it earlier, that we set up a credit scheme both in the U.S. as well as in Europe. That gives us credits for units produced, and we can then use those credits. Unfortunately, that hasn't been adopted yet. That's one point in our list, something that we were hoping to be able to take into account. That's out now because with the 1.25% impact, credit schemes for this year are not factored in. Regardless of that, we continue to work on this because we think it's the right thing to have a credit scheme both in the U.S. and in Europe. We would really like to implement such a scheme, and we'll continue to talk about it. Just to be quite clear about it, the offset is not factored into the current guidance for 2025. Thank you, Walter Mertl. The next question, please. Next question comes from Kana Inagaki from Financial Times. Please turn on your microphone now. Hello. Hi. Thank you for taking my question. I'd like to ask a bit of a broader question. Until now, companies have obviously pointed to the evolving nature of the Trump administration's tariffs. Now that we do have a basic deal between the EU and the U.S., it does seem like these 15% tariffs are going to stay. I just wanted to see your take on the fact that this will likely stay, obviously, through next year as well, and how this new reality is basically going to fundamentally change the car industry as a whole. That's, sorry, a big question for the first one. On the second one, I'm sorry to go back to this tariff. You've just been walking through the various mitigation steps that you're going to be taking. I take the fact that you obviously have the benefit of exporting. Even then, most of the rivals have said that there's also the steel and aluminum costs that are not directly imposed on carmakers but are obviously burdening the car industry through the suppliers. Therefore, many are expecting the tariff impact to actually increase towards the end of the year, even despite the E.U.-U.S. trade deal. I just wanted to clarify, is the differentiating factor for you the exports that allows you to buck basically the industry trend where everyone is warning that the impact will be bigger later this year? Thank you. Thank you for your question. Oliver Zipse, please. If you understand BMW as a global group of companies, then before, we had an import-export balance into the U.S. and from the U.S., more or less. Just for the sake of argument, let's assume that was fairly balanced, so we're importing the same as we're exporting. Before the trade negotiations, we had a tariff, let's say, of 10% + 2.5%, 10% going into the E.U. and 2.5% going into the U.S. Now, the total is 15%, 15% + 0%. From a global perspective, it's almost identical. Sure, the relationship changes, but in total, it's almost the same. What I want to say is, I think this tariff discussion is way exaggerated, and also its effects on the industry. What's much more important is the question, are the products attractive? Are the products made in such a way that they create a contribution margin? And are they attractive enough so that customers will pay a good price for them? This is much more important than tariffs. Allow me to make that remark. Yes, we've got a new tariff system in place, which applies for now, but the effect on the BMW Group won't be that large because in total, the tariff is not much higher than it was before. What's important to understand for Europe is, please don't go into, don't make that mistake of believing that by delimiting the trade relationships from other countries, you can be more resilient. I think that is a fallacy. Actually, you need to have global business models. You have to trade in all directions and be locally strongly integrated. These are the business models that will always survive. This is exactly the strategy of BMW. Mertl, please. One thing I can add here is regarding the statement that you made that others have declared that in Q3, there'll be higher impact, and we're not saying that. We have to take into account in the U.S. that the OEMs also have quite large inventories. Ours is, the reach is less than 30 days. In the industry, on average, it's a huge spread, but the industry average is roughly 60 days. Many other OEMs have a lot more inventory or had more inventory in the U.S., and that's different to us. They also imported cars into the U.S. in different manners. For that reason, their P&L still includes legacy cars that are still being sold now without the tariffs. In Q3, we will now have the cars sold on which those tariffs apply. That may well be that they actually say other things based on their particular business model, their inventory, and also their P&L effects than we at BMW. Because we have fewer cars in the yard locally, it does make a difference. Consistently, that's why the statements that are made by OEMs are just different. Yes, that was a very important clarification. Thank you. Next question, please. [Ryszard Kapuściński]. Turn your microphone on now, please. Good morning. I wanted to ask, could you comment on the current situation in China? And. Are you planning on changing your strategy or adjusting it? Okay. I'll pass that question to Walter Mertl. Hello [Mr. Ryszard Kapuściński]. In China, it's quite exciting. End of June, as I said in my speech earlier, there were a few impulses by the government. They wanted to take greater care of how commissions are taken into account that we as BMW had been criticizing over the past two years, that external banks paid far more than 5% commission to dealerships. We're not talking about net sales, but with an effect on net sales of the dealerships. This is something we made them aware of in June at the end of. As a result, a couple of things happened beginning of July. We at BMW have always been positive about this month. For a month, we had slightly increasing volumes, but of course, this had effects on the entire market at the same time. The government also underlined that supplier payment schemes have to be taken into account. BMW Group pays within between 30 and 60 days as per agreement, and other OEMs in China do this differently. Here, there might also be slight irritation. We don't have that, and all of that taken together may lead to some irritation. July 1, the second week of July, and the third was better already. Ultimately, for us, for the BMW Group and its vehicles, we're seeing a slight increase in transaction prices in the first weeks of July. In the first weeks of July, we'll see how that goes once we've got the closing figures for July. What may be different at BMW than with other OEMs is the following. As you know, we are restructuring our dealer network, and currently, the impact is mainly with the dealers that we had to support since November with respect to their criticality, and the dealership network will sort of be rearranged. We have made quite good progress yet, and by the end of the year, the process will have been completed. We've got truly motivated dealers in place, which will be able to sell their units. We're now in a phase of transition, but that makes it a little more difficult. This is why in the first six months, we saw stronger impact in the year-on-year comparison. Since we're making good progress and because existing groups of dealers are going to take over other groups of dealers and outlets, we're quite confident because they all believe in BMW, and they know that we're well invested, and they know that they'll have a future with BMW. They'll be able to grow, and they'll be able to make money, and we are very happy about that. Thank you, Walter Mertl. We've got three questions left. Next question, please. Next question comes from Frank Volk from Automobilwoche. You have the floor. Hello, everyone. Yeah, Zipse, you mentioned the flexibility of production networks. Now, if there were no import, if there's no import tariffs, importing into, are you already considering relocating further models into the Spartanburg plant, for example? I have a question relating to the end-of-lease vehicles and the slower revenues obtained. What is the reason for that? And a question relating to China and their sales strategy. How are you currently acting there? There is a price competition going on. There's a fight. Are you going along with that, or would you tend to say, "No, we can't make any more money on that"? What does it look like? Thank you, Mr. Volk. Mr. Zipse will begin regarding flexibility in production network, and then the other two questions will be answered by Mr. Mertl. Good morning, Mr. Volk. No, there won't be any relocations. No, the ranges of these tariffs are simply not large enough. As I said, the Spartanburg plant is working at full capacity. There is no room for further volumes, so permit me to say so. From the current perspective, all of that remains stable. Also, the plant utilization and both markets, Europe and the U.S., each on their own, are highly attractive markets for BMW. The numbers actually speak for themselves. We've got high growth rates in both markets, and this is independent of the plant location. Lighter, please. Hello. Let's start with the end-of-lease vehicles and the money we get for them. Every quarter, we reevaluate our entire portfolio in the entire world. We have residual value expectations towards the end of the contract, and we are relating to that at the beginning of the contract, and we're including all of the information into this calculation that we have, not just a general list assuming current today's prices, but we're factoring in lists that we're predicting for the next 36 months, for example. What can be stated is that for the past two years, used car prices gradually normalized because we'd had the best prices when there were hardly any new cars available because there wasn't enough material. This was in the years 2021 and 2022, and this is why used car prices increased strongly in that time. In 2023, Q3, this. Slowly decreased because we, again, had full availability. Regardless of that, regardless of the fact that prices are slowly decreasing again, we can establish that they're still higher than they were, for example, in 2018 or 2019. Accordingly, because we are reassessing every quarter, we can state that we still have, we still make income in the sale of end-of-lease vehicles. Not as much as last year, but it's still a positive contribution. This is exactly what that point is about. Now, China. You're asking whether we're entering the full-price fight. In China, last year, we had a major discussion second and Q3 when a lot of things happened. Also, these commissions that I referred to earlier, they increased to more than 10%, a fact which we had criticized. This has now led to a turnaround. Of course, the market is quite dynamic, but I'd like to point to our forecast. In March, we said that we'll be on the level of the second half year of 2024. I can tell you our net revenues, if I compare those with the forecasted second half of the year 2024, we're actually slightly in the positive compared to where we were second half of the year 2024. Our plan is working. The future will show the rest. Thank you, Walter. Next question, please. That's [Angela Meyer from Markt und Mittelstand. Please turn your microphone on. Good morning. I've got three very brief questions. I wanted to know, can you say anything on the dividend yet? The forecast is that, or analysts forecast that the dividend will be lower to EUR 4 compared to the EUR 4.30 from the previous year. Hence my question. Do you have a target? You want to keep the dividend stable, or how do you see this? Second question. In China, the limit for luxury tax was lowered. What's the impact for BMW? Could you tell us how many vehicles roughly could be affected by this? Third question. I'd like to ask, the 0% tariffs in the E.U., does that take off some burden, and could you quantify that in base percentage points? Thank you, Ms. Meyer. All three questions will be answered by Walter Mertl. Hello, Ms. Meyer. Now, the amount of the dividend, we'll tell you once we know. That'll be in March 2026 at the Balance Sheet Press Conference. That's where you'll get the information regarding China and the luxury tax that was lowered. I wanted to correct you here. The luxury tax. Is there, but the base level as of which it applies, that base level was lowered to RMB 900,000. Now, the impact for us is less than 1% of the volume. Regarding relieving a burden because of 0% tariffs for E.U. imports, I mentioned this earlier when I was asked whether I could break down all of the tariff effects individually. That's something I wasn't going to do, so I won't do that now. Just know there's still five years left for E.U. imports. They don't have a P&L effect of five months, but less. Of course, there will be an effect, and we're happy that people followed us in that respect. Thank you, Walter Mertl. Now, something fun. The last question, Lutz Meyer. We had Angela Meyer first, and now we have Lutz Meyer. The last question, please. Lutz Meyer from Capital. Good morning. Am I? Yes, sorry. It's just a comment I had to make. I apologize. There could be more people by that name. Anyway, you have the floor. Now, for something completely different, no tariffs. From your perspective, you had some positive news on BEV sales, and I would like some more details. First of all, are you this year compliant with the E.U. regulation, and how about the next years to come? Are you keeping an eye on what the regulation is doing here, and what's the demand on the market? Now, in the E.U., could you say that, I mean, last year, customers were quite reserved. Is that over now? Is demand now increasing? If it is, is it also increasing outside of Europe? Is the margin increasing outside of Europe? If you're now selling more BEVs, does that dilute your margin, or is the opposite the case? The third question also on BEVs, but now in respect to China. There is a concern that in China, luxury and BEV doesn't really go together and will not work in the long run. What's your take on this? What's your experience? Thank you, Mr. Meyer, for those three questions. They'll be answered by Mr. Zipse. Good morning, Mr. Meyer. I'd like to answer your questions step by step. First of all, do we reach our targets? Yes. We're sufficiently confident about this. Last year, we reached them anyway. This year, next year, I think we'll also reach our goals in terms of the current regulation in the E.U. That's all been known for many years. Even if for 2025, the goals are stricter, we are growing with our BEVs, so we're quite confident that we can reach those goals. We still believe there could be a better regime, a better method going forward to. 2030 and 2035. To do this most efficiently, but then also to improve the effectiveness of CO2 regulation. You know what we're saying? We need a life cycle assessment. Not just look at what happens in the car, but also consider where does the power come from, what happens in the value chain, what happens with the suppliers, what happens when the cars are recycled. Sometimes it's a little difficult to understand that we're saying, "Yeah, yeah, we're staying within all of the limits," but looking into the future, we're actually in favor of a more intelligent approach. To To us, that's no contradiction, by the way, that we're doing that because everything we do cannot be measured in quarters, but in years or even decades. What happened in the first six months? BEV sales could be increased globally to more than 220,000 units. We've never had that many before, and that should actually answer your question. Is there a market for these? Of course there is. Otherwise, we wouldn't be selling so many cars, and they're highly attractive. Now with Neue Klasse, we're still going one level up with an increased performance in almost all sizes. We do believe in 2026, 2027, 2028, we'll be on a very good track. You will see with the Neue Klasse, the attractiveness of our product portfolio is so high that we will see a substantial increase in our values. Which brings me to your question about China. Now, whether in a specific market, something works better or worse, it's precisely for that reason that our approach is neutral in respect of technology. In Europe, there's different approaches as well, by the way. There's a huge difference between Denmark, Belgium, Norway, as compared to Spain and Italy. With our approach, we're just responding to that. We just change the product mix in such a way that it works there. This is in Europe the same as it is in China. The observation you made, that's quite right, but it's not a problem really because we're able to react to this. What I said earlier about Neue Klasse, of course, we'll also launch it in China. It's a global product offering, and we will create trust. Now, customers, that all-electric offering can be very attractive because of the electric drivetrain, but not only because of that. These are all in all very modern vehicles. Digital capabilities, completely new design. You will experience, we're not relaxed, but we are confident. That we are able to respond well to any market development. How about the margin? Do more BEVs dilute your margin? Walter Mertl. I could take that question. Do you know that not just because of design and attractiveness of the product of Neue Klasse, that's not the only reason we're looking forward to this, but I'm also looking forward to its profitability with Gen 6 and the battery alone. Depending on which battery you use, we'll have savings of 40%- 50% in manufacturing costs compared to our current Gen 5 battery. I'm really looking forward to that. I'm also looking forward to that also in terms of the BEVs. All right. Thank you, Lutz Meyer, for the question. Thanks to the colleagues. Thanks for your questions. We're now ending our telephone conference. Thanks for participating. Goodbye and servus from Munich.