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BMW, VW Reach a Painful Juncture on the Road to Electrified Fleets

  • Shares sink as BMW cites profit slump, sets new cost cutting
  • VW CEO: ‘It’s not a done deal that we manage transformation’
A newly assembled BMW i8 hybrid electrical
Photographer: Krisztian Bocsi/Bloomberg

BMW AG and Volkswagen AG are facing up to difficult cost cuts needed to fund the unprecedented transition to electrifying their fleets.

BMW shares sank on Wednesday, dragging down its peers, after the luxury carmaker said it will embark on a 12 billion-euro ($14 billion) efficiency drive to pay for future battery-powered cars. Trade wars and an industry slowdown are sapping the profit margins essential to funding the shift, the company said.