BMW surprise winner in battle for EV market; sales up 75%

The company’s growth comes as sales of electric vehicles have risen at a slower pace overall around the world. What is even more surprising is that BMW

Update: 2024-03-11 01:15 GMT

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MUNICH: As BMW car bodies glided down an assembly line in Munich recently, showered by sparks from robotic welders, it was hard to tell which vehicles would be powered by batteries, fuel-burning engines or both. In the view of many analysts, that is not a good thing.

The German automaker’s electric vehicles (EVs) are made on the same assembly line as gasoline cars and look similar from the outside. That approach, using the same basic body for electric, hybrid, gasoline and diesel cars, has been viewed as an awkward and inefficient compromise some established carmakers have deployed as they struggle to compete with Tesla and emerging Chinese automakers that produce cars designed solely for battery power.

But confounding the pundits, BMW’s strategy has paid off. The company sold 376,000 electric vehicles last year, including some under its Mini brand, a 75 percent increase from the previous year. In the luxury segment, BMW was second only to Tesla, which remained dominant with 1.8 million cars. EVs accounted for 15 per cent of BMW sales in 2023, up from 9 per cent the previous year.

The company’s growth comes as sales of electric vehicles have risen at a slower pace overall around the world. What is even more surprising is that BMW, unlike General Motors or Ford Motor, made a profit on the EVs it sold.

BMW’s experience suggests there is hope for at least some established carmakers as Chinese carmakers like BYD start to export cars to other Asian countries, Europe and Latin America. As EVs move into the mainstream, the popularity of BMW cars suggests that many buyers prize the familiarity and workmanship of longstanding carmakers and remain wary of newer brands.

If so, BMW’s approach could show a path to other automakers that have been manufacturing automobiles for decades but have made little headway in the transition to battery-powered vehicles.

BMW’s strategy bought the company time to develop expertise in battery technology and to design a line of cars specifically to be electric. It has helped the company, based in Munich, cope with fluctuations in demand because it can more easily dial up or down production of different types of cars.

The approach also helped BMW hang on to customers who are interested in electric propulsion but are not ready for a sharp break from the past. The company offers hybrid versions of several of its most popular models, saying that buyers should be able to choose a car’s propulsion technology as easily as choosing its colour.

“We would lose our traditional customers if you would tell them, ‘You are part of the old world,’” Oliver Zipse, chief executive, BMW, said, referring to people who still preferred combustion engine cars. “They would immediately defect.”

Zipse argues that BMW is not just an automaker. “BMW, yes, it’s a car company,” he said. But, he added, “In essence, it’s a technology company which has the ability to integrate very different technologies into one product.”

Starting in 2027, BMW will produce nothing but EVs in Munich, though it will continue to manufacture models with internal combustion engines at other factories. The company has large plants in Shenyang, China; Spartanburg, SC; and other locations in Europe. BMW has said it will begin manufacturing EVs in the US by the end of the decade.

Unlike Audi and other competitors, Zipse has refused to put an expiration date on internal combustion engines, drawing criticism from environmental groups.

“BMW could lead the European auto industry in the electric vehicle transition if it would make a clear commitment to ending production of internal combustion engines that damage the climate,” Benjamin Stephan, a transportation expert at Greenpeace in Germany, said in an email.

But Zipse said the industry’s future is clearly electric. Sales of BMWs with engines have plateaued, he noted. “The fastest growing segment is electromobility,” Zipse said. EVs, he added, “will be a dominant market force.”

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