Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

BMW targets 50% rise in electric car sales in 2018

The German carmaker is facing increasing competition from rivals Mercedes-Benz and Volkswagen in the electric car market

Elisabeth Behrmann
Tuesday 05 December 2017 10:48 GMT
Comments
BMW’s i3 model was an early push into the electric market
BMW’s i3 model was an early push into the electric market (Reuters)

BMW is targeting another ambitious hike in plug-in hybrid and battery car sales next year to defend its position in the electric-car shift as competitors like Volkswagen ready their own battery line-ups.

The planned increase to about 150,000 cars sold would represent a 50 per cent rise from this year, and a jump of about two-thirds from last year’s deliveries of green cars. BMW, an early mover in the electric-car shift with 2013’s i3, is facing increasing competition from rivals like Mercedes-Benz and Volkswagen.

“We’ll definitely boost sales by a mid-double digit amount,” Klaus Froehlich, head of development at BMW, told reporters in Munich. “This is to stay ahead of the competition that’s starting to do its own rollout.”

Faced with tightening emissions regulation, BMW and other carmakers are spending record amounts developing a more attractive suite of electric cars to kickstart sluggish consumer sales. The payoff remains uncertain, as high battery prices will squeeze returns compared to equivalent combustion engine vehicles -- at least for a number of years. Demand for the vehicles remains at a fraction of total car sales, with BMW’s target paling compared to total 2016 deliveries of 2.4 million vehicles.

Luxury Breadwinners

To help pay for the shift, BMW will start sales next year of the all-new X7 SUV and 8-Series coupe, priced at around €100,000 (£88,377). The expanded top-line segment will go head-to-head with Mercedes-Benz’s luxury variants like the S-Class coupe and Maybach sub-brand. Unlike Mercedes’s parent Daimler, also the world’s biggest commercial vehicle-maker, or 12-brand behemoth Volkswagen, BMW has less opportunity to spread development costs of its suite of at least 12 all-electric cars by 2025. Volkswagen plans to have 50 battery cars by then.

“Our goal for the luxury segment in the next few years is taking more market share,’’ chief executive Harald Krueger has said, adding that the new suite of luxury cars will be sold under the Bayerische Motoren Werke’ signature. “In 2018, we’re significantly enlarging our offering in this lucrative growth segment.’’

BMW is in the middle of a record rollout of 40 all-new and revamped vehicles this year and next, seeking to wrest back global leadership of luxury car sales from Mercedes. Its Stuttgart, Germany-based rival overtook BMW last year for the first time in a decade, after overhauling a stodgy line-up with sportier styling and adding new models.

BMW’s electric push coincides with the biggest transformation for the industry in decades, drawing in a host of new competitors like Tesla and Uber. BMW last month flagged it’ll spend €7bn on research and development this year, as much as 2011 and 2012 taken together.

Tight Margins

Mercedes said it’s targeting savings of €4bn by 2025, saying returns on electric cars could be roughly half of gasoline and diesel vehicles for some years. The concerns about mastering the pressures have pushed the valuations of BMW, Daimler and Volkswagen to the bottom four rungs in the Dax Index.

BMW’s struggles with slow sales of the i3 city car, which used a lightweight carbon-fibre body for the first time in a mass-produced vehicle, prompted the carmaker to dial back its electric ambitions and pause from adding more electric-only vehicles to its line-up.

Next year, it’s bringing out an electric Mini, followed by a battery-powered X3 SUV in 2020, adding electric powertrains to existing models rather than creating a distinct, separate line-up like Mercedes’s planned 10-vehicle EQ range. In the future, BMW will bundle its electric model versions under its ‘i’ brand, and has reserved naming rights for models iX1 through to iX9.

“This can’t be just about showcase cars,’’ said Froehlich. “We have to boost profitability and keep prices on an acceptable level by delving very, very deeply into our cost structure.’’

Bloomberg

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in