The luxury SUV market is brimming with innovation, but not all experiments succeed. BMW’s XM, a plug-in hybrid SUV positioned as a high-performance flagship, has faced challenges since its debut. Once envisioned as a spiritual successor to the legendary M1, the XM has instead become a cautionary tale for BMW. With just 1,974 units sold in 2024, the XM was the brand’s worst-selling model in the United States.
The Numbers Tell a Troubling Story
BMW sold 2,315 XMs in 2023, a number that was already underwhelming due to deliveries beginning later in the spring. However, instead of improving in its first full year on the market, sales dropped by 14.7 percent in 2024. To put this in perspective, even the niche Z4 roadster outperformed the XM, selling 2,129 units, an increase of 13.1 percent year-over-year.
Technically, the XM wasn’t dead last in BMW’s portfolio. Oddities like a single i3 hatchback sold in early 2024 and a lone 6 Series Gran Turismo purchased in Q4 kept the XM from taking the absolute bottom spot. Yet, these anomalies only highlight the XM’s struggles further, as these discontinued models are well past their prime.
Strong Year for BMW Despite XM’s Challenges
While the XM stumbled, BMW had an otherwise stellar year in the US. Delivering a record 371,346 vehicles in 2024 marked a 2.5 percent increase in sales. SUVs carried the brand, with the X5 leading the charge at 72,348 units, followed closely by the X3 at 68,798 units. The 4 Series came in third, with 42,608 units sold.
BMW’s dominance extended over its rivals, with Mercedes-Benz trailing at 324,528 units, despite a 9 percent growth. Audi’s numbers fell sharply, down 14 percent to 196,576 units. Japan’s Lexus enjoyed its best year yet, selling 345,669 vehicles, surpassing Mercedes but still falling short of BMW’s total.
Why Did the XM Struggle?
A combination of factors likely contributed to the XM’s poor performance. Critics and consumers alike have labeled its design as awkward and polarizing. While beauty is subjective, the XM’s bold styling has alienated many buyers who find it unappealing compared to BMW’s more conventional models.
Performance was another sticking point. Despite being marketed as a high-performance M car, the XM isn’t significantly faster than the X5 M, which comes at a much lower starting price—approximately $33,000 less. Fully loaded, the XM Label variant pushes close to $200,000, pricing it firmly in supercar territory without delivering a true supercar experience.
Moreover, the XM’s identity as a plug-in hybrid might not resonate with traditional M car enthusiasts. BMW enthusiasts who value the heritage of the M badge may have expected a mid-engined coupe or supercar, akin to a modern-day M1. Instead, they got a heavy, hybrid SUV, which many feel strays too far from the M division’s roots.
A Missed Opportunity?
If BMW could turn back the clock, it might choose a different path. The XM’s failure to resonate with its target audience underscores the risks of bold, untested ventures. A mid-engined coupe or true successor to the M1 may have found a more welcoming market, especially among enthusiasts craving a modern icon.
As BMW continues to innovate, the XM serves as a reminder that not every gamble pays off. For now, it remains a divisive chapter in the storied history of BMW’s M division.
