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Authors
Advisor(s)
Abstract(s)
This thesis begins with a case study analyzing BMW AG (BMW.DE), a global leader in
the premium automotive and motorcycle industry. BMW operates through three
primary segments: i) Automotive, ii) Motorcycles, and iii) Financial Services. The focus
of the case study is BMW’s current electric vehicle (EV) strategy and the exploration
of two additional potential future scenarios, each reflecting varying levels of EV
adoption by 2030. Specifically, the analysis considers BMW’s stated goal of achieving
50% EV sales by 2030, as well as alternative scenarios targeting 40% and 60%
adoption. These scenarios are assessed based on financial performance, strategic
positioning, and market risks, with the aim of identifying the optimal path forward.
Managers at BMW face a critical dilemma: how to balance the need for aggressive EV
expansion with profitability, capital allocation constraints, and the uncertainty of
regulatory and consumer trends. The case study combines both quantitative and
qualitative reasoning to support BMW’s strategic decision-making in a rapidly changing
automotive industry.
Following this, an Equity Research report on BMW is presented. This report issues a
Buy recommendation for BMW, with a YE2025 price target of €91.56/Sh. To value the
company, a Sum-of-the-Parts model was used where a Discounted Cash Flow
analysis, based on FCFF for the Industrials segment, and FCFE for the Financial
Services segment, was conducted. This valuation represents an annualized upside
potential of 26.2% compared to its closing price on May 28th, 2025 at €79.74/Sh., with
a high-risk classification. To underline this target other valuation methods were
performed, such as a FCFF integrated approach or a Dividend Discount Model.
Description
Keywords
BMW AG Automotive EV Equity Research Valuation M&A
Pedagogical Context
Citation
Talikine, Alexander (2025). “Case study on BMW AG: road to 2030 electrification”. Dissertação de Mestrado. Universidade de Lisboa. Instituto Superior de Economia e Gestão
Publisher
Instituto Superior de Economia e Gestão