It's rare for BMW to fail with a new vehicle, but rare isn’t never. It’s not that the XM has a terrible design or build quality, or doesn’t offer impressive performance. But the fact is, the SUV hasn’t caught on with buyers.

The biggest reason for the XM falling flat on its face? Pricing. At over $250,000, it doesn't offer much more than a X7 M60i, which sells for half the price. The strategy clearly needs rethinking.

Consequently, we know the vehicle will only be offered for one generation. And already, BMW is starting to reduce the offer. From two variants, it's down to one for the 2026 model-year.

The trim being retained is the top Label version, which is the more powerful of the two offered in 2025, offering a combined output of 738 hp and 738 lb-ft of torque.

This plug-in hybrid SUV was an entirely new creation from the M division, rather than a modification of an existing model. It was the first time since 1978 that the M division had designed a vehicle. Unfortunately, its career will be short-lived. Reports emerged last year that BMW planned to discontinue the XM after the end of current-generation production in November 2028.

A look at the sales figures helps to understand the company's decision. In the U.S., BMW sold only 1,974 units of the XM in 2024, down 15 percent from its launch year in 2023.

Plans for an all-electric BMW XM, which would have launched production in late 2028, have also reportedly been shelved.

The 2026 Label version will be available in new colour options, both for the exterior and interior, and feature new wheel designs. BMW is also promising faster charging times.

Production of the 2026 versions begins in August at BMW’s plant in Greer, South Carolina. The model will be available as of this coming fall.