Rising raw material prices, in particular rhodium, palladium and steel, could cost German carmaker BMW an additional 1 billion euros ($1.21 billion) in 2021, the company's chief financial officer said on Friday.
In a conference call, Nicolas Peter said that higher raw material costs will be partly offset by favorable currency exchange rates, so the net impact will be about 500 million euros.
BMW reiterated its full-year profit margin outlook but said that it expected the rest of the year to remain volatile and that rising raw material costs could hurt earnings moving forward.
Pretax margin for its main carmaking operations probably will come in at the upper end of its previous forecast of between 6 percent and 8 percent, the company said in a statement on Friday.
Automotive margin rose to 9.8 percent in the first quarter.
BMW in April reported a 370 percent jump in pre-tax profit for the quarter as it bounced back more strongly than expected from a pandemic-ravaged first quarter last year.
Vehicle sales during the quarter surged more than a third to almost 637,000 cars as deliveries in China almost doubled. Quarterly results also received a boost from the sale of previously leased vehicles, in particular in the U.S. market. Vehicle sales in North America rose 17 percent.
Sales of its electrified vehicle models more than doubled in the quarter, when the company also benefited from higher sales of its lucrative X5 and X6 SUVs.
BMW said that it expects to have 2 million EVs on the road by 2025.