Ladies and gentlemen, we will now begin our Q&A session. If you have a question, we ask that you please use the raise hand function at the bottom of your Zoom screen, or if you have dialed in, please press star nine to enter the queue. Once your name has been announced, you can ask a question. If you want to withdraw your question, please lower your hand using the raise hand function in the Zoom app, or via telephone, press star nine. Thank you, and please stay tuned for our first question. Our first question comes from Patrick Hummel at UBS. Please unmute your line. Yeah, good morning, everybody. Thanks for taking my questions. Two questions for Walter, please, and Oliver. No offense, but we just met in Munich for the strategic questions, so I'll focus on two financial ones, if you don't mind. First, regarding the tariff impact, thanks for the quantification. I think the 100, the 200 basis points in the second quarter impact, that's clear. If I apply simple math, 150 basis points in the first half and 125 for the full year, that suggests about 100 basis points for the second half. I'm just wondering if you would say this 100 basis points run rate for the second half for tariffs should be also a good indication for, you know, how things would look like going into 2026, even maybe as a, as a more, let's say, cautious scenario, because you might be able to mitigate more of the tariff impact via pricing and optimization of your industrial footprint. That's the first question: is 100 basis points a conservative run rate for the future? My second question, I think you're still holding on to your China guide volume-wise flattish, which means better than - 5 or at least - 5. Are you still comfortable with that? If not, if maybe the number would be a bit more closer to -1 0, would you still feel comfortable with the group guide in terms of slight volume growth and the 5 - 7% margin range, just to get an idea about, you know, stress testing your assumptions here for China? Thank you. Thank you very much, Patrick. Walter. Hello, Patrick. With respect to your math on tariffs, I can just reiterate that for the full year impact, we have 1.25%, so one and a quarter, and it's around one and a quarter. You also do know that not every deal is closed yet. I also mentioned already that we don't take our credit scheme we proposed and tried to get into the U.S. deal. We took that one out of this year's expectations, but we are still fighting for it because we are still convinced that has to be included to honor the production in the country, not just in the U.S., but also even in Europe, right? We always talked about that one also in Europe. With respect to our guidance and this 1.25% point, that is not included anymore. That doesn't mean that we are not fighting for it. With respect to your question on 2026, I will elaborate about this one in March at the press conference. Why is that? If you just have a look for the last six months, a lot of things happened impacting tariffs. The next six months, I guess there could be also some changes, and that's the reason why we rather speak about it when it's due and time to discuss about it. Your question about China, I just want to reiterate, we are not doing guidance by region. The guidance is set on the world and not on the region. Of course, we see all these topics in China affected by the strong monitoring of the authorities with respect to the commissions paid from external banks to the dealers and the impact, especially on the first week of July. Of course, we are seeing that. You are also aware that we are restructuring our dealer size. Of course, whilst our ambition on flattish is up to minus 5% versus last year's, we clearly approach that one from the level below. All depends on the recent developments in the market. We see some improvements week by week, but it all depends. I think that is still comfortable. Finally, to end up with our volume guidance, if we just have a look on Q2, in the quarter two, you just saw, despite the fact we lost 13.7% year on year in the quarter two, the full world was still positive by 0.4%. We compensated some losses in China year on year with European and America performance. That is still a clear statement. The world guidance is intact, independent of the situation there in China. Thank you. That's awesome. Thank you very much. Next question. Thank you, Patrick. Next question, please. Our next question comes from Tim Rokossa at Deutsche Bank. Please unmute your line. Yeah, thank you very much, Max, Oliver, and Walter. I have two questions. The first one to you, Walter, probably. I think one of the most appealing aspects of your equity story is that you can actually plausibly claim that the investment peak is behind you because you invested in all the necessary flexibility and capacity. Now, can we talk a little bit about the phasing and seasonality here when we think about quarters? We have seen another step in the right direction during Q2. Is this something that you think will continue over the next few quarters? Is it volatile? Perhaps you can contextualize this with what we should expect in terms of seasonality for margin and cash flow in Q3 and Q4 this year. Secondly, not sure, but probably Oliver, to you, I agree with your comment on the press call that it's all about building attractive products and that it outweighs things like even tariffs. In Europe, we actually noticed that a couple of OEMs talk about good momentum now, even those with older portfolios like Mercedes, for example. Where do you think that emergence of the European consumer, at least on the premium side, but also upper mass market side, comes from? How do you feel how sustainable that is? Thank you. Okay, we start with Oliver and then Walter. Oliver, please. Yes. Good morning, Tim. Nice to talk to you. Let's have a look at Europe, and that is where your question is directed. Europe has an ever-aging age of the product, the car fleet. I think now also comes the time to replace that fleet. Customers, of course, know that. That's the first thing. It's quite obvious that there is a replacement momentum in Europe. The second is that, especially BMW, we have a very attractive product portfolio over all segments, starting on the very top with Rolls-Royce, then 7 Series, the 8 Series is still in the market, and all the way down to the 1 Series and MINI. You can have in every segment, you have combustion engines, you have the electric fleet. On top, as I said in the media conference call, we never sold as many M products as we've done before. The whole breadth of product offerings leads to, of course, a growing market share. Is that sustainable? I think it is because the 27 countries in Europe are much more predictable than what we see, especially in China. Also, of course, we have political stability inside of Europe. We see for the remainder of the year and also going into 2026 a robust, predictable market momentum, which is able to compensate some of the more difficult markets like in China, for example. Thank you, Oliver. Walter, please. Just reiterate the strength of Europe, just to speak about the second price level of our sold side is less than 20%. We have a strong first price level, which is even more strong than with respect to your right directions you asked after Q2. The free cash flow is on par with previous year's level, but we shouldn't underestimate the second half here is also different to previous year. Why is that? CapEx peak, for example, was last year in Q4, and that is not going to happen this year. We will have less CapEx in Q4. We have the seasonality of our working capital procedures, and not to forget, we are also aiming to organize profit in Q3 and Q4. Otherwise, we couldn't confirm our full-year guidance. All these elements together end up that we are still confirming our $5 billion free cash flow. If you just think about last year, when we had the big IBS impact, we also organized the right free cash flow ultimately, and we are not going to have that. Not to forget on the consistent approach, which you saw on the cost side, R&D as well as the operational cost. We came down in Q1 year on year, we came down in Q2 year on year, and we are planning to go down in Q3 as well as in Q4 year on year. All that is proving our consistent approach, first of all, and secondly is underpinning a stronger free cash flow in the second half year. I think that's the main relevant things for you. Many thanks. Thank you very much, Tim Rokossa. Next question, please. Our next question comes from Stephen Reitman at Bernstein. Please unmute your line. Yes, good morning. Thank you very much. You mentioned in the speeches that you'd had already journalists testing the BMW iX3, in kind of like getting a pre-form in Miramar in June. Could you comment on the reactions you received, particularly from Chinese journalists and other people who know that market very well? That is your question? Yes. Okay. Yeah. Oliver, please. I think what we have, what we have done, of course, on purpose, because the BMW iX3 is not only the front runner of the Neue Klasse, it also encloses a complete product and corporate strategy, directed towards four different technology clusters. You can only experience that when you drive the car, not by looking only at the battery size and so on. What we find out, if you combine that driving experience around these four technology clusters, wherever we go, whether it's European journalists, whether it's American journalists, whether it's especially Chinese journalists, they say, wow, this is a masterpiece of engineering, how it fits together, how it feels when you drive the car, especially if you drive it against current competition. For example, we have the objective, everything that has to do with assistance systems, meaning autonomous driving, it has to be smart, it has to be symbiotic, and it has to be safe. Symbiotic means that the car is your companion, and it's not just a function which you buy and put into a technology stack and put it in the car. I think when the journalists drove the car, they said, I've never driven a better BEV in my life. This is not only directed about the electrical drivetrain. This is how it feels. Therefore, we are extremely optimistic when we unveil the car in early September and then launch the car in early November, that there will be a substantial market demand because that car is going to be, at that point in time, the benchmark of the industry. That is what, whoever we talk to, whatever is written about the car, which is reflected by media and journalists. You already hear from what I'm saying, we are very optimistic about the market success of the BMW iX3, but also the subsequent cars, the BMW i3 and the other cars which are coming closely after. Okay. Thank you very much. Next question, please. Our next question comes from Sam Perry at BNP Paribas. Please unmute your line. Sam, are you with us? Hello? We don't hear you. We will move on to the next question, which is from Jose Asumendi at J.P. Morgan. Please unmute your line. Thank you very much. Two questions for Oliver, please. Good morning, Oliver. In the light of the rapid developments we're seeing from Tesla and Waymo when it comes to deployment of level four autonomous driving, I would love to get the thoughts, please, on how you strategically think about autonomy within BMW, and how do you tackle level three, level four autonomous driving within the house? Who are your key partners? Ultimately, whether you think this is a technology you need to be involved at the forefront in order to be able to protect pricing power in the premium segment. The second question also, Oliver, for you as well, when it comes to tariffs, I would like to understand, beyond the framework we have seen between Europe and the U.S. when it comes to tariffs, what are the maybe outstanding bolt-on negotiations that BMW strategically is looking to pursue in order to maybe round up the agreement? Thank you. Oliver. Okay. Thank you very much, Jose. The answer will come from Oliver. Yeah. The first question, if you talk about individual mobilities, is you have to answer the question, what business are you in? Of course, we ask ourselves, what business are we in? I can tell you what business we are not in. We don't build trucks. We don't build pickup trucks. We are not in mobility services. We are not in driverless cars. That's the first question, what you have to do. The second thing, we are not testing out business models. When we launch a car, it must be profitable from the first car on. This is what we are in. In line with that, and you will see that in the Neue Klasse, that assisting system, autonomous systems have to be in line with that business we are in. That means individual mobility in the premium segment. I cannot talk about other business models, but you have to answer the question, are you profitable? Do you have a chance to be profitable? Do you have a chance to be profitable if the regulator has not admitted specific things? Only to have a testing ground in some areas of the world does not mean that this is scalable. I cannot tell you the logic of other market participants who think that this will be profitable. I cannot answer that question. We are in the business of having profitable, high tech, premium individual mobility, and completely autonomous cars are not part of that business model. The second question, I think we have answered that before. I think the most important thing is that we come to an agreement, what has been done by a handshake agreement between the EU and the United States. We must now quickly finalize and implement the agreed measures. That's the first priority. Whether we pursue individual agreement, that has to be seen, but that's not the most important thing. I think the most important thing is to now come to a conclusion, to a reliable conclusion that we have a 15%, 0% agreement on United States and EU tariffs, that's the most important thing. I think it's a good agreement for both sides because it ends a never-ending dispute, which you can do forever, you know? I think that's the best thing for both sides that could be achieved at this point in time. As we said before, it's not a complete disaster for our business model because BMW Group has a global business model. We import and export into the United States and the EU at the same time. There is some offset included in that deal because we have that business model. The most important thing is that Europe recognizes that this is a business model that works, which is not confined and restricted to the European Union, but this is a global business model. That is the most important thing that has to be recognized. This is not a disadvantage. This is a great advantage for European companies. Thank you very much, Jose, for your question. Next question, please. Our next question comes from Michael Punzet at DZ Bank. Please unmute your line by pressing star six and ask your question. Hello, Michael. Michael Punzet, can you hear me? Yes. Yes. Yes, we hear you. Okay. Please give us your question. I have one question regarding the CO2 targets in Europe. You mentioned several times that you will meet that target already in 2025. Do you see the risk that becomes a disadvantage in competition in the years 2026, 2027, assuming that other carmakers can push EV sales by lower prices or higher incentives? Thank you very much, Michael. Oliver Zipse, please. Yeah, Michael, thank you. Thank you for that question. I have a two-parted answer to your question. We're not concerned about 2025, 2026, or 2027. We will reach the targets even if there is some market pressure. We have enough leeway to fulfill the requirements. We have prepared for many, many years for that, and we will never push something into the market just to reach a specific CO2 requirement from the legislature. At the same time, while saying that, I think we nevertheless need a different framework for CO2 regulation. To look only at the tailpipe will lead over time to serious market distortions, which means less effectiveness of CO2 reduction, with less profitability for market participants, and therefore less investment capabilities into climate change. Therefore, we advocate for a different regime, which is oriented towards a lifecycle assessment, which includes supply chains during the creation phase of the car, which looks at a technology-neutral approach, which includes e-fuels or alternative fuels, which includes the type of power you use for driving the car all the way down to what happens to recycling the car. This is the much more effective and much more competitive approach to CO2 regulation. Are we there yet? No, we are not there yet, but we made a proposal to advocate for. I can tell you that we get more and more institutions, market participants who we convince that this is a better approach. Is that happening overnight? No, of course not. This will happen during the next 12, 24, 36 months until we are there that we get into a new regime. If we don't start to argue what is the better regime, every week you run into a much more difficult competitive situation and market situation in the markets, as you can already see in Europe, you know? People report diminishing profits, and that has nothing to do with the tariffs or the trade relation with the United States. This is purely self-inflicted, and that has only started now. Yes, especially with the Neue Klasse, we will reach the targets, but at the same time, we advocate for a new regime. Thank you. Thank you very much, Michael. Next question, please. Our next question comes from Adrian Yanoshik at Rothschild & Co Redburn. Please unmute your line. Hi, morning. Thanks, everybody, for taking my question. I had a question more at the top of the mix, even above GKL, and I'm talking about Rolls-Royce. Do you have any updates or KPIs that you might be able to share, whether it's ASP or personalization rates? I think tied to that, maybe any updates on the Goodwood expansion and what it could contribute to the business going forward. I think maybe a second part of the question on the same theme, any next steps that you're able to share on the development of the Alpina sub-brand starting next year? We had some early comments a couple of weeks ago. Sounds like it's still a very low volume, high performance orientation, but would love to get an update if it's possible. Thanks. We start with the Rolls-Royce question with Walter and then Oliver. Yes, Walter? Hello, Adrian. As you do know, we don't say explicitly to our brands dedicated numbers, as you do know. With respect to Rolls-Royce, you do know that we have over $500,000 revenue at one we shared already last year, and that is still the case. It's more than $500,000 revenue a car. Bespoke is more than 50% on a share. That is a really good business, but I'm not talking more about it other than, yes, we have an expansion on the Goodwood side because the business is really good. We are not overdoing it because this is a special clientele, and that's the reason why we are not talking so much about it. Many thanks. Oliver? Adrian, you apparently watched us closely, and that is a very good thing. If you look at our brands, especially in the upper segment, Rolls-Royce, but also BMW, what you see is that individualization plays an ever-increasing role. At BMW, we launched two cars, the Sky Top and the Speed Top, for example. Very low volume, ultra low volume, in the upper price range, in a never until then achieved price range. Those two cars were immediately sold out, immediately. You mentioned Alpina. There's more to come, but that is a similar approach. Low volume, high profitability, high individualization, apart from normal products. So you have there Sky Top, you have Speed Top, you have Alpina on the BMW side. The same thing you see at Rolls-Royce, an ever higher individualization rate. In that context, we also invest into Goodwood to even expand that individualization. It's never about volume. It's about increasing the contribution of margin per car. That is working quite well because independent of market sentiment, there is a very, very stable marketplace for ultra high net worth individuals. We are expecting targeting these new customer bases. At Rolls-Royce, you see all kinds of different individualization. You see the normal bespoke business, which is ever increasing. You see custom-built cars, and you have even one-offs, which we've done in the past three years, three times. Rolls-Royce had one-off cars, which only exist one time. That business model is to individualize in all kinds of segments and all kinds of price ranges. You will see that at BMW, and you will see that also at Rolls-Royce. That, of course, stabilizes both brands. Thank you. Thank you very much, Adrian. Next question, please. Our next question comes from Sam Perry at BNP Paribas. Please unmute your line by pressing star six and ask your question. Hi there. Can you hear me now? Yes, we hear you. Yeah. Apologies. Just a couple of questions on China, please. First one was about discussions currently ongoing regarding sort of minimum price guarantees replacing tariffs in Europe for Chinese produced vehicles. Can you talk a bit about the perks and takes for that for BMW, both from a perspective of your MINI exports from China to Europe and also, I guess, the European business more broadly? Second question also on China. At the CMB a few weeks ago, you mentioned the only area of the Chinese market growing was below $150,000, and you didn't wanna compete there, which was a large reason for why your volumes have been under pressure. However, the data I'm looking at, and maybe I'm looking at the wrong data, but it shows that the market's growing up to around the $300,000 mark, which is where about, whereabouts you have about 50% of your product offering. My question, I guess, is, is the reason the volumes are under pressure because you don't compete at that price point or because you are continuing to lose some market share? Thank you. Yes, thank you very much, Walter. Hello, Sam. On the EU-China tariffs, you do know our statement. We have been persisting serious criticism of this legally implementing regulation, on which these countervailing duties are based. The BMW Group has filed an action for annulment of this regulation with the General Court, and this is still ongoing. We haven't any conclusion yet, but we are coping with it. With respect to the competing on the side, yes, you're right. On the tune side, up to 300,000, there was growth. Up to RMB 150,000, there was growth of 18% year on year. Between RMB 150,000 and RMB 300,000, there was growth of 4% year on year. We shouldn't forget what I mentioned previously. You're restructuring our dealer network. Performance of the healthy dealers is still a good one, but whilst restructuring these ones, and we are having good progress by doing that one since November 2024, and we will finish that by the end of this year, we lose out here some performance. That is the real kick in, and the issue we are facing on the volume side. Thank you. Thank you very much. Next question, please. Our next question comes from Michael Tyndall at HSBC. Please unmute your line. Morning, gentlemen. Thanks for taking my question. I'm going to stick with China. Walter, I wonder if you could help me out here a little bit. The dealer network rationalization, what does that mean in terms of your P&L? Are those dealers a drag on volumes? Are they competing aggressively on price, or are you, in fact, supporting them through this transition? Is their compensation going out such that when those dealers are no longer in business, you'll actually see a meaningful impact? If you could give us a bit more detail as to what exactly will change once those dealers are no longer in operation. The second question for Oliver. Oliver, when we spoke last year, you very rightly described a Chinese market that was in this unsustainable state in terms of the number of operators. I'm noting that you've said things have started to change in June, but I'm also noting that some consolidation efforts haven't really played out. From your perspective, are we on the cusp of seeing the Chinese market start to consolidate such that it's a more rational, sustainable market going forward? Thanks. We start with Walter and then. Oliver. Yes, Walter, please. Hello, Michael. On the dealer side, we mentioned that one already, that we are in the middle of this restructuring side. We are closing down some outlets, and we are selling some outlets from one dealer group to other ones. I want to reiterate that existing dealer groups are buying those outlets, so that is positive. With respect to the end of this year, we are assuming that by then, compared with the end of 2024, we will have roughly 10% less dealer points and roughly 20% less on the owner structure. This is going on. There is nothing changed in our story. It's just getting executed. I think that is the big thing. With respect to compensation you mentioned, as I always said last time, no dealer compensation has been neither announced nor paid hence. Of course, while transaction pricing in the last three weeks has seen slight sequential recovery, it doesn't entirely compensate all these losses of the dealer commissions they previously received or up to the end of June they received. We are, of course, closely monitoring that one. As good partners, we are also in good discussions with our dealer partners. That's the thing for your first question, I think. I would like to answer the question about the Chinese market situation. Of course, the Chinese market will remain very dynamic in the coming weeks and months and even years. Two things are very important to recognize. First of all, the market share of Chinese manufacturers in the home market is still below the value of European manufacturers in Europe. The current share of Chinese car manufacturers in China is 59% compared to over 65% of European players in Europe. There is even more development. What is the final end game? It is probably going to be above 66%. We must expect that in the next months and years, the market share of Chinese manufacturers will grow up to 65% or 70%. That's the first thing. Everything else would be, I would say, unrealistic. That means for the rest of them, for non-Chinese players, there's still a market share of one third, which is substantial due to the size of the market. Now, with these remaining Chinese manufacturers, you currently have more than 100 brands. Can you expect that these 100 brands with the remaining market share in China will remain? That is also very unlikely. If you ask the question, who are the dominant players, I cannot answer that question. There will be some flourishing brands. There will be some brands who struggle. What you see is that profitability level in the Chinese market is very low also for the Chinese players. That will lead to more market dynamics. Brand will become even more important. That's a good thing. Whoever has a strong brand, who has some heritage, who has a track record of reliability, of high quality products, has an advantage, even if the current market conditions are very fierce. That will be the remaining element who is able to stabilize market share or even to grow market share. BMW will be one of these brands. Thank you. Thank you very much. Our last question comes from Horst Schneider. Horst Schneider. Yes, good morning. Yes, good morning. I hope you can hear me. Good morning. yes. The last question that I have is the last question, maybe something for Walter. Walter, maybe you can help me to understand the drivers in terms of earnings for H2 now, also more from a sequential perspective. If I reconcile that, you expect rising volumes, China pricing is improving in contrast, or also tariffs are declining, then material costs are going up. You ramp up oil class, you ramp up, deprehend the plant. It is a kind of trade-off. When I look at your free cash flow guidance, you say the free cash flow is higher in H2 than H1. It implies to me that also earnings should be in H2 higher than H1. Is that conclusion right? Does that mean that basically you stay within the 5% to 7% margin guidance also in H2 or also in Q3 and Q4 even? In other words, Q2 was a trough in terms of margin. Is that conclusion correct? Thank you. Walter. Nice try. The full-year guidance is still intact, as I mentioned. The full-year guidance is still intact. I think we have a good starting basis because if you have a look at my half-year numbers, Auto EBIT is at EUR 3.6 billion, and my total group profit is starting with EUR 5.7 billion, all half-year numbers. Even if you would just double it up, it is already in reach of my guidance. We have, of course, a lot of ups and downs in the second half-year with respect to profit and everything could happen, of course, but there are chances and not just risks. I think we have a good starting basis, first of all, eventually better than a lot of other ones, first of all. Secondly, I can just reiterate what I mentioned to Patrick and Tim beforehand on the free cash flow. We presented that our fixed costs, our operational fixed costs, are declining every quarter. We presented and proved that one in Q1, and we have done so in Q2. We also promised already in March that we are going to do that all along, meaning also in Q3 as well as in Q4. Plus, not to forget our seasonality on working capital in Q4. You know how our structure is running in Q4. That's always beneficial for free cash flow, which we also presented last year. Last but not least, our CapEx development over the quarters. If you have a look at 2024, you saw there was a huge CapEx impact as a burden on free cash flow in Q4. We also mentioned that we have a very good slowdown of CapEx because we did our homework already, right? Other ones have eventually different strategy and have to have more CapEx in Q4 whilst we not, especially not versus last year where we had our final peak. If you put all these checks together, you end up in our free cash flow prediction and you end up with our guidance on profitability on group as well as on Auto EBIT. Many thanks, Horst. Good. Many thanks to Walter. Yes, Horst. Yeah, just to follow up maybe on, to Walter on that. In other words, CapEx is up H2 versus H1, and working capital in H2 is the tailwind or headwind? Horst, nice try again. On my full-year number, CapEx is lower on full year this year than last year. You saw already a decline in the first half year. You will also see a decline in the second half if you just compare year on year, the first half versus first half year 2024 or the same on 2025. That is just easy. Okay, thank you. Okay. Thank you very much, Horst. Thank you very much for your last question. All the best to you. We have reached the end of the telephone conference. Bye-bye and servus from Munich.