BMW has declared a pivotal shift in its business strategy, acknowledging that the era of peak sales for its gasoline-powered luxury cars has passed. With an eye on the future, BMW is now focusing its growth on the burgeoning electric vehicle (EV) market.
In a conference call this week, BMW’s Chief Financial Officer Walter Mertl said that the demand for the Germany automaker’s combustion engine vehicles reached its peak last year. From this point forward, the company expects all-electric models to drive its growth, marking a significant transition in the automotive industry.
The tipping point for combustion engines was last year. Future volume growth will primarily come from battery electric vehicles.Walter Mertl (via Bloomberg)
BMW’s commitment to this new direction is evident in its ambitious target of selling half a million electric vehicles in 2024, which would constitute about a fifth of its total vehicle deliveries. The company experienced a 75% jump in EV sales last year, fueled by popular models like the i4 sedan.
Despite facing challenges such as a competitive market led by Tesla and consumer hesitations due to high EV prices and inadequate charging infrastructure, BMW remains optimistic. The company saw strong EV orders during November and December, especially in Europe, indicating steady demand. BMW’s approach includes plans to introduce new models like the i5 sedan and expand its Mini brand EVs.
Looking ahead, BMW is set to introduce its “Neue Klasse” vehicle underpinnings, a nod to its popular models from the 1960s and 70s. This new technology aims to halve battery costs compared to current models, enhancing the profitability of their EVs.
By the end of the decade, BMW expects its electric vehicles to yield higher returns than combustion engine cars, signifying a major shift in the company’s financial focus.