Usually, when a BMW vehicle sports an M badge, you can be pretty sure that it’ll be worth a great deal of money at some point in the future. As one of the most formidable performance divisions in automotive history, it’s nearly guaranteed that the machine will be at the forefront of driver engagement and capability.
However, the BMW XM has so far failed to follow this theme, and instead has become an effective method of throwing money down the drain. And that’s despite the car being wholly designed by the mighty M Division itself.
The XM Is Only The Second Car Developed Solely By The M Division
2024 BMW XM Label Red Black/Red Front Angled ViewBMW
Ever since the M Division was established back in 1972, it has primarily focused on upgrading models produced by BMW, as opposed to designing and building its own bespoke vehicles. This approach has resulted in some of the greatest performance cars of all time, such as the BMW M3 and M5 sports sedans. It did produce its own supercar in its early years, namely the M1, which was developed so that BMW could take part in Group 5 racing. A total of 400 road cars had to be constructed for the race car to be deemed eligible, which led to the production version of the M1.
The M Division didn’t build another bespoke model until 2023, when it introduced the XM. BMW had tasked it with designing a full-size SUV that was geared towards pure performance, rather than worrying about also being a comfortable cruiser. Using BMW’s Cluster Architecture platform, which served as the base for the X7 SUV, the M Division upgraded the turbocharged B58 inline-six and 4.4-liter S68 turbocharged V8 hybrid engine for use in the vehicle. With the hybrid V8 under the hood, the XM had 664 horsepower and 590 lb-ft of torque at its disposal, which resulted in a rapid 0-60 mph effort of 4.1 seconds.
It was given a firmer suspension and damper setup than you’d normally find in an SUV of this type, as well as a more aggressive four-wheel-drive tune that saw most of the engine’s power channeled to the rear wheels. Beyond that, the active roll stabilization technology used by Rolls-Royce was also employed to help keep the vehicle composed through corners. The M team also included its own rear differential design to help enhance traction, while rear-wheel steering was also brought along to help improve agility. To finish it off, the SUV’s body was styled to be more aggressive and purposeful than BMW’s more comfort-focused SUVs, resulting in a vehicle that looked like it meant business.
The XM Has Been A Depreciation Disaster
2024 BMW XM Label Red driving rear three-quarterBMW
Despite the pedigree of being only the second bespoke M Division-developed model in history, the XM has struggled to make much of a positive impression since its 2023 debut. It was by far the most expensive BMW SUV available at launch, with its $159,000 starting price putting it just shy of $60k above the X6 M. Still, that isn’t the end of the world as long as it becomes a worthwhile investment, right?
Well, any hopes of that look distant right now. According to the CarBuzz Marketplace, the average value of a 2024 XM currently sits at $82,791. That’s a reduction of 47.9% in just two years, which is a frankly frightening rate of depreciation for such a young vehicle. If we’re talking cash, that’s a discount of $76k for those looking to pounce on such a vehicle on the used market. That’s the last thing anyone who bought one new will want to hear, but given how the XM has been received, this steep value loss is understandable.
The XM Struggled To Find An Audience
2023 BMW XM Blue Side ViewBMW
As of the time of writing, BMW has shifted just 6,898 XMs in the US, and it’s currently tracking to sell 6.6% fewer in 2026 versus the year before. Perhaps unsurprisingly, it’s rumored that BMW is looking to discontinue the model in 2028. The high-end cost seems to have put plenty of potential buyers off, since you could have purchased something like a Lamborghini Urus at the time for $228,000. While still a lot more money, the Urus sported a much more revered badge, as well as arguably more unique styling inside and out.
The XM also had an image problem. Generally, people with the kind of budget needed to own one would easily have the capital to purchase a proper sports car or supercar if they want a performance-focused machine, rather than settle for a high-riding SUV that will always be naturally compromised in this regard. The M1-inspired styling nods, such as dual BMW roundels on the rear glass, and louvered taillights, didn’t help either, as any kind of M1 celebration deserved to be carried out on something more special than just another SUV.
There was little point in a hardcore performance SUV when plenty of other SUVs on the market provided excellent pace with a more compliant ride, making them more versatile. When combined with the XM’s sky-high price tag, and the fact that buyers stand to lose $75k of their investment within just 24 months, the recipe for disaster becomes clear.
The M Division’s First Car Has Fared Much Better
The BMW M1 was the brand’s first mid-mounted performance car.BMW
While the XM doesn’t look to be a particularly good investment right now, the M1 is faring much better. Given its success as a race car and its pedigree as a road car, the M1 is regarded as one of the coolest and most capable performance cars of the 1980s, nearly 50 years after its introduction. Alongside this, the fact that just 453 examples of the vehicle were ever constructed makes it exclusive, and therefore very collectible.
Its advanced age means that it has all the ingredients needed to be an appreciating classic, and that is being played out on the used market. Having cost the equivalent of $55,000 when new in 1979 – which translates to a shade over $255,000 in today’s money – a mint specimen is worth considerably more than that today. According to Hagerty’s Valuation Tool, such a car will demand around $680k on average, with the upper end of this valuation coming in at $723k.
Accounting for inflation, that represents a nearly threefold increase in value. That appreciation doesn’t appear to be slowing down anytime soon, as the M1 has gained 8.8% over the last 12 months. It may not be as modern or practical as the XM, but the M1 sports all the right ingredients to go down in history as one of the most collectible BMWs of all time, while the XM looks destined for a very different fate indeed.
Base Trim Engine
4.4L V8 Hybrid
Base Trim Transmission
8-speed automatic
Base Trim Drivetrain
All-Wheel Drive
Base Trim Horsepower
577 HP @5600 RPM
Base Trim Torque
553 lb.-ft. @ 1800 RPM
Base Trim Battery Type
Lithium ion (Li-ion)
Infotainment & Features
9 /10
Sources: BMW, Hagerty’s Valuation Tool.
