BMW will use profit from SUVs to fund mass production of EVs

BMW 330e iPerformance

Car buyers’ love of SUVs continues to grow. Every third BMW car built last year was an SUV, and the market is growing so fast that the company is increasing production capacity and adding an X2 and an X7 to its lineup in 2018.

With a certain poetic justice, the German automaker says it plans to keep on cranking out the profitable behemoths, and use part of the profits to fund the rollout of a mass production system for EVs.

BMW expects demand for hybrids and EVs to rise to 15-25 percent of sales by 2025, up from 2.6 percent today, forcing it to overhaul production lines and vehicle platforms (rival Mercedes has made a similar forecast).

“The fully electric drivetrain will be integrated into our core brands,” CEO Harald Krueger said at a news conference at BMW’s Munich headquarters. EV production will be merged into BMW’s main production system – it currently relies on a separate, low-volume factory in the eastern German city of Leipzig.

Local production in China is also being reorganized to make batteries and electric powertrains, BMW said, adding that the level of production would be decided once the government’s EV policy has been clarified.

 

MORE: BMW electrifies its best-selling model: the 330e iPerformance PHEV launches in the US

 

Source: Reuters

  • Joel ≡

    They should use ALL the profits from SUVs to pay for EVs. It would be more than poetic, it would go to offset the carbon – especially important in the EU for fleet CO2 averages.

  • Electric Bill

    Note: even with as much foresight as Elon Musk has shown… even he has been surprised by the demand developing for EVs, as well as the pace at which battery technology has matured. So we must forgive BMW if, by 2025, their estimates of “only” 25% of their sales being EVs.

    Elon said he was only expecting 2,000 deposits for the Model 3 last year; 180,000 deposits were placed the first day, and four hundred thousand were received not long after. That is why, of course, the Gigafactory battery plant in Sparks, which was already slated to be the world’s largest factory, quickly had to be reformatted to a footprint five times as big.

    It is admittedly just instinct on my part, but I am convinced the demand for EVs here and abroad by 2025 will outstrip demand such that today’s ICE car factories will have to be retooled to produce EVs as quickly as they can be made. I suspect car makers will be so taken aback as to be afraid to make ICEs, for fear of getting stuck with inventory they cannot sell.

    Part of my hunch is based not on battery tech and charging tech as it is today, but on what it may be in the next eight years.

    John Goodenough, who is the inventor of the ubiquitous lithium ion battery, recently announced he has a radically different, cheaper, safer battery chemistry that will provide three times the energy density of today’s cells— if it pans out, it means we will soon have EVs with a range of 300 or more miles that is far cheaper than anything available today, so that those shopping for the least expensive cars will not be looking at Toyota Corollas, Honda Civics, Nissan Sentras, but something even less expensive and more practical available from each and every car maker.

    Elon has said the battery tech he is most excited about at this time is from Dalhousie in Nova Scotia, Canada. He has not tipped his hand yet, but he certainly must be aware of Goodenough’s battery, so if he is, still putting his money on the Canadian battery, it must be really promising, and most likely offer even greater benefits than Goodenough’s cell.

    It’s a horse race, fellas, being run with electric stallions.