BMW AG is facing a substantial braking system defect that could cost the automaker nearly €1 billion ($1.1 billion) in repairs, following two years of growing customer complaints. The issue, affecting up to 1.5 million vehicles, has triggered a large-scale recall across several luxury brands, including Rolls-Royce.
Initial reports of faulty brakes emerged in June 2022, but BMW only fully realized the scope of the problem by August 2024, according to a recall document obtained by Bloomberg News. The defective part, supplied by Continental AG, was touted as an innovative, lighter, and more efficient braking system. However, it introduced risks by interfering with the electric signals controlling the brakes. A formal investigation started in October 2023, leading to BMW’s first recall of 80,000 vehicles in the U.S. by February 2024. The recall has since expanded to 1.5 million vehicles, including flagship models like the 7-Series sedan, high-performance XM SUVs, and the $420,000 Rolls-Royce Spectre.
Ferdinand Dudenhöffer, head of the Center for Automotive Research, highlighted the severity of the recall, noting that BMW’s tightening quality controls signal deeper concerns. A recent profit warning wiped €5 billion off BMW’s market value, emphasizing the financial impact of the crisis.
