BMW expects higher margin and deliveries in 2023 amid electric rollout

German automaker BMW on Wednesday set out targets to slightly increase margins for its automotive segment and raise deliveries this year, as it pushes ahead with the rollout of its electric fleet.

The company said it expects an EBIT (earnings before interest and taxes) margin of between 8-10% for its automotive range in 2023, with deliveries set to rise slightly from 2022 and “selling prices remaining at a stable level.” It forecasts the used car market will normalize this year “due to the increased availability of new cars.”

“A high level of flexibility, combined with our operational performance, proved to be an effective combination for ensuring the success of the BMW Group, even in the face of headwinds and taking advantage of opportunities for profitable growth,” Oliver Zipse, chairman of the board of management of BMW AG, said in a press statement.

Like rivals, BMW has been contending with global semiconductor shortages and supply chain disruptions, challenging it to fulfil its book order.

The company confirmed the full-year 2022 results reported last week, including an EBIT of 10.6 billion euros ($11.4 billion) for its automotive segment, which had an. 8.6% margin last year. The company posted its automative cash flow near 11.1 billion euros.

As a result, it proposed a dividend of 8.50 euros per common stake share, compared with a 5.80 euro payout for the same stock in the previous year.

The company announced the appointment of a new chief financial officer on March 9, with Walter Mertl due to assume the role in May following the retirement of Nicolas Peter at the time.

BMW results follow a spate of optimistic announcements from automakers earlier in the week, with Porsche issuing an ambitious growth outlook after record 2022 earnings and Volkswagen laying out a five-year $193 billion investment plan.

BMW anticipates the main growth drivers of its business this year will be its premium models and fully battery-electric vehicles (BEV).

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

BMW plans to deliver 2 million fully electric vehicles by 2025 and over 10 million such units by 2030. The first electric vehicles of the carmaker’s MINI brand are due to enter the market this year, after the Rolls-Royce range launched its first fully EV model Rolls-Royce Spectre in 2022 and will reach customers in 2023.

The automaker has been bolstering efforts to transition toward electric vehicles, announcing in October that it is looking to invest $1.7 billion in its U.S. operations to build such autovehicles and batteries. It introduced a pilot fleet of hydrogen vehicles earlier this year.