Price cuts aren’t just a domestic strategy for Chinese automakers. Even Western legacy brands are jumping in. Last week, BMW announced sweeping reductions across 31 of its models in China, highlighting a more aggressive effort to keep pace with intensifying competition in the world’s largest auto market.

The biggest cut came to the BMW i7 M70L, the high-performance flagship of the all-electric 7-Series. This dual-motor sedan delivers 659 horsepower and 811 lb-ft (1,100 Nm) of torque. As of last week, it now carries a price tag that’s 301,000 yuan lower, a reduction of roughly $42,000.

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While the i7 had the largest drop in raw numbers, the steepest percentage cut went to the iX1 eDrive25L. BMW trimmed the price of the long-wheelbase variant of the compact SUV by 24 percent, bringing the new starting figure to 228,000 yuan, or about $32,600.

Speaking to Bloomberg, BMW said the price changes are part of its “regular price management,” adding that “final transaction prices are independently negotiated and determined between authorized BMW dealers and customers.”

How Far Will Discounts Go?

Behind the curtain, though, the timing suggests more than just routine recalibration. November marked the second straight month of declining sales in China, according to data from the China Passenger Car Association. That slide has spurred several automakers to adjust pricing.

Meanwhile, regulators have introduced measures designed to prevent brands from undercutting costs, prohibiting sales below production cost and banning dealer incentives that push prices beneath that threshold, Bloomberg reports.

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BMW’s recent cuts appear to bring official pricing closer to what customers were already paying after negotiations. According to Yale Zhang, managing director at Automotive Foresight, the updated stickers largely reflect existing transaction norms rather than undercutting them. “The new prices aren’t any lower than typical dealer selling prices,” Zhang noted.

When Deals Become a Warning Sign

Big savings could be just around the corner. With the Chinese New Year approaching in February, many manufacturers are expected to introduce further incentives in hopes of front-loading first-quarter sales.

At least 14 car brands have already rolled out some form of discount or incentive program since the beginning of 2026. Zhang believes this trend is less a temporary blip than a reflection of broader pressures within the market.

“Various kinds of promotional activities may ebb and flow in the market from time to time, but they are here to stay,” Zhang told the news outlet.

Chinese authorities, meanwhile, are taking a cautious stance. With more manufacturers opting to slash prices, regulators are increasingly concerned about the potential knock-on effects. They worry that an extended period of discounts could spark deflation, disrupt the automotive supply chain, and put downward pressure on wages.

BMW just wrapped up its most successful year ever in the US, with more cars leaving dealership lots than in any other year in the company’s American history. But beneath the record-breaking headline, a more complicated picture is starting to emerge for EVs, as sales momentum falters following the White House’s decision to eliminate the generous federal tax credit that had helped keep demand afloat.

Read: The Sales Battle Between Mercedes And BMW Just Got Embarrassing

In 2025, BMW sold 388,897 vehicles across the country, a 4.7 percent increase from the 371,346 units it delivered in 2024. The gain came even though fourth-quarter sales slipped 3.4 percent, dropping from 117,506 to 113,512 units. MINI also posted growth, with a 9.3 percent year-on-year rise and a total of 28,749 cars sold.

EV Sales Crater

Then there’s the EV situation, which looked considerably less upbeat. BMW sold 42,484 fully electric vehicles in the US last year, down 16.7 percent from the 50,981 it managed in 2024. The decline was particularly sharp in Q4. After the federal government pulled the $7,500 EV tax credit, sales in the final three months collapsed by 45.5 percent to just 7,557 units.

BMW USA Sales 2025

Every one of BMW’s battery-electric models in the US saw a meaningful drop in sales. The i4, which remained the top-selling EV in the lineup, slipped 14.1 percent from 23,403 to 20,114 units. The i5 fell even more sharply, dropping 21.5 percent to 6,877. The i7 was down 15.3 percent to 2,905 units. The iX also struggled, with an 18.2 percent decline that left it at 12,587 sales for the year.

On a more encouraging note for the brand, BMW’s plug-in hybrids gained traction. Sales rose by 30.7 percent, climbing from 19,398 in 2024 to 25,351 in 2025. It wasn’t enough to offset the EV downturn, but it’s a sign that US buyers haven’t turned their backs entirely on electrification.

X Marks the Spot

The X3 led the lineup once again as BMW’s top-selling model, rising 11.3 percent to 76,546 units. That was just enough to slightly edge out the larger and more expensive X5, which posted 76,246 sales, a 5.4 percent increase over 2024.

Several other models also recorded solid gains. The 2 Series, which groups together the mechanically unrelated Gran Coupe and two-door variants, jumped 36.3 percent to 20,975 units. The 3 Series climbed 5.4 percent to 33,031, while the X6 posted a 26.6 percent increase, reaching 12,000 sales. As for the controversial XM, it recorded a 4.9 percent drop in sales compared to 2024.

After Porsche’s recent round of price hikes, it looks like BMW will soon follow suit. According to a report from CarsDirect citing a dealer bulletin sent this week, BMW will be doing the same in the new year.

While it didn’t explicitly point to tariffs as the cause, the timing does invite speculation for certain models, even if the biggest increase happens to hit a model built right in the United States, where tariffs aren’t the go-to excuse.

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BMW’s internal notice reportedly states that most vehicles in its range will see a price increase of roughly 1 percent, though not every model is affected. The adjustment will result in MSRP hikes ranging from $400 to $1,500 and will go into effect on January 1, 2026.

The most significant increases apply to the M5 Sedan and Touring, both up $1,400, and the BMW X6 M Competition, which will now cost an extra $1,500. Interestingly, the i4, i5, iX, i7, 7-Series, Z4, and XM are excluded from the price hikes.

This isn’t the first time that BMW has increased prices over the past six months. Back in July, it announced that the MSRPs of most 2026 models would rise by as much as 1.9 percent, resulting in price hikes of $2,500 for vehicles like the BMW X5 M and X6 M.

Those two models are built in the States, alongside other SUVs at the automaker’s South Carolina facilities. So technically, they shouldn’t have been impacted by tariffs, or at least not significantly, unless imported components factored in. As usual, the truth sits in a grey area.

For buyers looking to sidestep the latest round of price changes, it may be worth checking local inventory for cars already on dealer lots. Vehicles delivered before the end of the year are likely to carry current pricing.

Tariffs may have influenced BMW’s pricing for 2026, but the broader pattern raises more pressing questions. This is the second increase in just six months, suggesting something beyond routine adjustments.

Annual price bumps aren’t unusual in the auto industry, particularly with new model years. But those are usually linked to updates or added content, not blanket, across-the-board hikes with no clear explanation, and certainly not with this frequency.