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BMW has beaten the analysts’ forecasts today with a 42.4% whopping increase in third-quarter net profits to 2.58 billion euros ($2.99 billion). The higher prices and sturdy electric vehicle (EV) sales do offset lower deliveries that are due to the scarcity of chips.

Automaker will Meet its Target

The finance chief Nicholas Peter, in an earnings call, said the company was confident of actually topping its target for a 10% margin on pre-tax earnings this year. Although the fourth quarter is going to be slightly hindered by higher tax payments and investment costs.

In fact, looking ahead, the company is expecting strong EV sales to carry into 2022, Peter said.

The company’s strong relationship is with suppliers has cushioned the blow. This has occurred while there are rising raw material prices that have impacted earnings this year, said CEO Oliver Zipse.

“Moreover, we have always had a good oversight over in regard to our supply chain. In fact, that is really paying off now. It is happening right down to the raw materials,” Zipse said.

BMW: Chip Supply Problems

The sales slowdown due to scarce chip supply has affected automakers from Volkswagen to Stellantis to Renault. Consultancy BCG has reported in September that it has expected a total of 10 million to 11 million fewer cars to be produced worldwide. It is because this year because of the shortage.

BMW: Raising Prices

BMW and rival Daimler are luxury producers. They were able to raise prices in dealerships to offset losses. In fact, they fared better than others. It is with both companies which reported an EBIT margin of 7.8% in the third quarter. Thus outstripping Volkswagen’s 4.9%.

In the third quarter, BMW’s deliveries did fall 12.2. Yet they were still up by 4.5%. EVs, in particular, did see a massive boost. It is with sales in the nine months to September were almost double of last year’s levels at just under 232,000 vehicles.

New Vehicles

“There is a better product mix and also good price setting of new vehicles. Also, alongside a steady pricing trend. This includes used vehicles which bolstered the financial performance of the business,” a company statement said.