Christina Amann, Victoria Waldersee

BERLIN (Reuters). BERLIN (Reuters). BERLIN (Reuters). BERLIN (Reuters). On Wednesday, BMW cut the 2022 profit margin for its car division and stated that it expects the chip crisis will drag on through the year. This is the latest warning from an automaker about supply chain disruptions exacerbated in part by Russia’s invasion.

The German automobile manufacturer sold an unprecedented 2.52million vehicles in 2012 despite the shortage of semiconductors. It had been expecting to sell even more, but it now anticipates that output will be on par with 2021.

Frank Weber, Chief Technical Officer, said that its goal to increase electric vehicle production is not being altered. It plans to increase EV sales more than 200,000 and to reach 2,000,000 fully-electric vehicles by 2025.

Joachim Post from the purchasing department said it would establish five new alliances for batteries factories at locations near where EVs in Europe and China are made. However, he did not give details.

This premium automaker posted a 10.3% EBIT margin (its highest level since 2017), but reported lower average earnings per unit than its competitors, such as Audi and Mercedes-Benz.

The Ukraine crisis has caused it to expect a margin in earnings before interest and taxes (EBIT) of 7-9% rather than the previous 8-10%.

BMW has suspended some German production following Russia’s invasion in Ukraine. But, full production will be resumed next week, Milan Nedeljkovic production chief said. The Mini is still being produced in Oxford.

Nedeljkovic explained that schedules were changed to make up for production lost time. He also said that renovation work at specific plants was completed later in the year because production was stopped.

Due to the Ukraine crisis, and COVID-19-related disruptions in China, carmakers Toyota and Tesla (NASDAQ:), have had to close plants and increase prices. Many are predicting more change if the current situation doesn’t stabilize.

BMW stated that it could still source parts from the west Ukrainian region and is working with suppliers worldwide to continue production. However, any further disruptions are to be expected.

Nicolas Peter, Finance chief said rising prices for raw materials would cost the company approximately 100 million euros.

Post indicated that the company still expects to retain its Ukrainian suppliers over the medium-to-long-term.