BMW’s new e-car strategy

Deutsche Welle
4 Min Read

Amid stagnating sales of its battery-powered, lightweight ‘i’ models, BMW has had to admit its strategy for dominating the electric car market isn’t working. To change that, it plans to take a page from Tesla’s book.
BMW’s flagship all-electric vehicle can go from 0 to 100 km/h in about 7.2 seconds. It’s a source of pride for the Munich-based automaker – if only its sales volume would accelerate just as quickly.

The problem is that BMW just isn’t selling enough of its zero-emission i3s with the futuristic carbon fiber frame and luminescent blue trim. In 2015, sales just barely topped 24,000 – about half as many vehicles as its American rival Tesla sold from its Model S and Model X series.

What’s more: Despite logging 12 consecutive quarters of losses, Tesla has managed to capture the attention – and business – of those in the market for a new e-car. Pre-orders for the Tesla Model 3, which the company won’t begin delivering until 2018, have already hit 400,000.

In order to reassert itself as a global leader in the production of electric vehicles, BMW is contemplating an entire revamp of its market strategy, according to the German business daily Handelsblatt.

Instead of putting all its weight behind one series of all-electric (i3) or hybrid (i8) models, the company wants to offer a whole portfolio of battery-powered cars and SUVs by 2022, including the 3 Series, the X4 and Mini Cooper.

An elephant in the room

Every fourth car BMW sells is a 3 Series, making it the company’s most popular model. The sedan will be relaunched in 2018, and BMW will work to equip 3 Series models with electric motors as soon as possible, according to Handelsblatt.

BMW doesn’t face the same problems as Elon Musk’s company. At a shareholders’ meeting last May, the Germans trumpeted their most recent successes: record sales, record profits and record dividends. But the concern’s inability to gain traction in the e-car market was an elephant in the room.

Other German car makers have also announced their own ambitious electric car programs. Volkswagen, for instance, has said it intends to roll out more than 30 million battery-powered vehicles over the next decade, equal to about a quarter of its manufacturing capacity by 2025.

Hard to change a winning team

BMW, for its part, has traditionally been less gung-ho about venturing into the forward-looking yet money-losing e-car segment. According to Reuters, the company has been delivering a return on sales above 8 percent for 25 straight quarters – something BMW’s board is reluctant to put at risk.

“How does the company expand into the loss-making segment of electric cars and retain its industry-leading profitability,” Reuters recently quoted an anonymous source as summing up the question facing BMW’s management.

Handelsblatt also reported that BMW would also shake-up its leadership by instating a new CFO and merging its marketing and sales divisions for Mini and BMW, in order to better compete with Tesla, Daimler and VW.

A few days ago, Reuters reported that board members would miss the upcoming Paris Motor Show, one of the industry’s biggest gatherings, to hold talks on the company’s electric car strategy. On Monday, Handelsblatt said BMW would use the auto show to announce their plans introduce half a dozen new electric models within six years.

cjc/uhe (Handelsblatt, Reuters, dpa)

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