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BMW has gone from being an electric car pioneer to a laggard
2024-11-29
       The BMW Group was founded in 1916 and is headquartered in Munich, the capital of Bavaria. The group specializes in the high-end automobile market and is represented by brands such as BMW, Mini and Rolls-Royce.
       Like its German counterparts Volkswagen and Daimler, BMW is a publicly traded company, but it is controlled by one of Germany's wealthiest industrial families, the Quandts (including Susanne Klatten), who own almost 47% of BMW's shares. Since 2019, BMW has been led by CEO Oliver Zipse.
       BMW prides itself on being a leader in sustainability, saying it was the first company in the auto industry to appoint an eco-responsible person in 1973. BMW is also a leader among German automakers in the transition to electric vehicles, but it has lagged behind its rivals after an early sprint that is now seen as “expensive pioneering work.” BMW’s hesitation to embrace electric vehicles, resistance to ambitious European Union emissions standards, and involvement in the “dieselgate” scandal have seriously tarnished BMW’s sustainability reputation.
       While other German automakers’ first electric cars were initially designed for internal combustion engines, BMW developed an entirely new electric model from scratch, launching its “i” brand of electric vehicles—a bold but costly move. The all-electric i3, launched in late 2013, features new carbon-fiber technology. It’s built at BMW’s Leipzig plant, which has its own wind turbines to generate electricity.
       The i3 has been one of the world's best-selling electric cars for several years. However, the initial popularity of electric cars was slower than BMW expected, resulting in sales that were far below the company's expectations and seriously dampening BMW's EV ambitions. The i3 has a solid fan base, but its innovative, thin and light design has caused controversy, partly because it clashes with BMW's high-performance image.
       Ironically, California-based Tesla has conquered BMW’s home market by producing electric cars that fit neatly with the Bavarian company’s reputation for being classy, stylish, and cool. Tesla has managed to attract plenty of BMW customers with its Model S and Model 3, which overtook BMW and Daimler in European EV sales in early 2019. Tesla is continuing to ratchet up the pressure on BMW and other German automakers with its Berlin “gigafactory,” which will open in the summer of 2021 and eventually produce 500,000 vehicles a year.
       In response to these competitive pressures and tightening EU emissions standards, BMW has been ramping up its electric vehicle ambitions in recent years. But compared to many other automakers, especially Volkswagen, BMW has long been lukewarm on electric vehicles. The company hasn’t launched a new all-electric car since the i3, but will launch the more conventional i4 and iX SUVs in 2021.
       With Mercedes abandoning fuel cells, BMW remains the only major German automaker to support the technology. “Depending on how the environment develops, hydrogen fuel cell technology will likely continue to be a core part of the BMW Group’s product portfolio,” Zipzer said in July 2020. Many environmentalists and experts doubt that fuel cells have a future in cars, as battery technology is advancing rapidly and fuel cells are far less energy efficient.
       After a sharp increase in electric vehicle sales in Europe in 2020, BMW stepped up its electrification plans again at the beginning of 2021. The new plan is widely seen as a firm commitment to electric vehicles. By 2025, deliveries of purely electric BMW models will increase by “more than 50%” on average per year, thus increasing more than tenfold compared to 2020. From 2025 onwards, the company will clearly prioritise electric vehicles in its product portfolio and will adopt a completely new vehicle architecture. By 2030, purely electric vehicles will account for at least 50% of global deliveries.
       BMW also plans to turn Mini into a pure electric brand. The last new Mini with a combustion engine will go on sale in 2025. By 2027, EVs will account for at least 50% of Mini sales, and by the early 2030s, the brand will sell only electric cars. CEO Zipse has said that BMW will “be uncompromising in its commitment to electric, digital and recycling,” but has no plans to make its own batteries.
       In a highly symbolic move, BMW said at the end of 2020 that it would stop producing combustion engines in Germany, convert domestic plants into electric vehicle plants, and move traditional car production to plants in Austria and the UK.
       Despite BMW’s focus on electric vehicles, there are currently no plans to phase out combustion engine models anytime soon. Zipzer insists that “a one-stop strategy could be very dangerous” and believes that combustion engines will be sold in some parts of the world within a decade. Other German automakers Volkswagen and Daimler have also not set phase-out dates, while Ford, General Motors and Volvo have announced they will phase out combustion engine technology sooner.
       Although BMW has been relatively slow to electrify its vehicle fleet, the Bavarian company was named the most sustainable car company in the world in 2020 by the Dow Jones Sustainability Index. This is because BMW places great importance on reducing the CO2 emissions of its cars in the production and supply chain. The company aims to reduce emissions over the entire life of each vehicle by at least a third by 2030 through innovation rather than offsets. “Specifically, we will reduce CO2 emissions by 80% during the production process, by more than 40% during the use phase and by at least 20% in the supply chain,” BMW said in early 2021. “Without corrective measures, the increase in electric vehicles will actually lead to an increase in CO2 emissions in the supply chain by around a third by 2030. As part of its sustainability strategy, the company has invested in innovative CO2-free steel production methods in an effort to reduce emissions.” steel supply chain by approximately 2 million tons by 2030.
       In response to three major industry “megatrends”: tightening environmental regulations, autonomous driving technologies and the sharing economy, BMW has entered into a series of cooperation agreements, most notably with its archrival Daimler and its Mercedes brand.
       German business newspaper Handelsblatt called it a “historic collaboration” aimed at “competing with Google and Uber.” In early 2019, BMW and Daimler agreed to form a broad alliance in mobility services, including a merger of BMW’s DriveNow car-sharing business and Daimler’s Car2Go. The two companies have launched five sharing brands: car-sharing unit Share Now, ride-sharing unit Free Now, parking service Park Now, electric vehicle charging service Charge Now, and Reach Now, which provides convenient booking services for various modes of transport. But the mobility services segment is struggling to make money, with media reports suggesting a partial sale is increasingly likely.
       BMW and Daimler have also pooled resources to curb the rising costs of self-driving cars.
       Climate activists continue to question the company’s true commitment to sustainable mobility. InfluenceMap, a UK-based NGO that specialises in assessing climate lobbying, said BMW “appears to have become more proactive in its climate-related policies in the transport sector since 2019.” Influencemap reported: “However, the company retains membership in a number of regressive industry associations and has repeatedly made statements opposing the transition to electrified transport before 2019. According to The Guardian, BMW has also actively lobbied for a delay” by the companies behind the UK’s combustion engine phase-out programme.
       Like its German counterparts Volkswagen and Daimler, BMW is a publicly traded company, but it is controlled by one of Germany's wealthiest industrial families, the Quandts (including Susanne Klatten), who own almost 47% of BMW's shares. Since 2019, BMW has been led by CEO Oliver Zipse.
       BMW prides itself on being a leader in sustainability, saying it was the first company in the auto industry to appoint an eco-responsible person in 1973. BMW is also a leader among German automakers in the transition to electric vehicles, but it has lagged behind its rivals after an early sprint that is now seen as “expensive pioneering work.” BMW’s hesitation to embrace electric vehicles, resistance to ambitious European Union emissions standards, and involvement in the “dieselgate” scandal have seriously tarnished BMW’s sustainability reputation.
       While other German automakers’ first electric cars were initially designed for internal combustion engines, BMW developed an entirely new electric model from scratch, launching its “i” brand of electric vehicles—a bold but costly move. The all-electric i3, launched in late 2013, features new carbon-fiber technology. It’s built at BMW’s Leipzig plant, which has its own wind turbines to generate electricity.
       The i3 has been one of the world's best-selling electric cars for several years. However, the initial popularity of electric cars was slower than BMW expected, resulting in sales that were far below the company's expectations and seriously dampening BMW's EV ambitions. The i3 has a solid fan base, but its innovative, thin and light design has caused controversy, partly because it clashes with BMW's high-performance image.
       Ironically, California-based Tesla has conquered BMW’s home market by producing electric cars that fit neatly with the Bavarian company’s reputation for being classy, stylish, and cool. Tesla has managed to attract plenty of BMW customers with its Model S and Model 3, which overtook BMW and Daimler in European EV sales in early 2019. Tesla is continuing to ratchet up the pressure on BMW and other German automakers with its Berlin “gigafactory,” which will open in the summer of 2021 and eventually produce 500,000 vehicles a year.
       In response to these competitive pressures and tightening EU emissions standards, BMW has been ramping up its electric vehicle ambitions in recent years. But compared to many other automakers, especially Volkswagen, BMW has long been lukewarm on electric vehicles. The company hasn’t launched a new all-electric car since the i3, but will launch the more conventional i4 and iX SUVs in 2021.
       With Mercedes abandoning fuel cells, BMW remains the only major German automaker to support the technology. “Depending on how the environment develops, hydrogen fuel cell technology will likely continue to be a core part of the BMW Group’s product portfolio,” Zipzer said in July 2020. Many environmentalists and experts doubt that fuel cells have a future in cars, as battery technology is advancing rapidly and fuel cells are far less energy efficient.
       After a sharp increase in electric vehicle sales in Europe in 2020, BMW stepped up its electrification plans again at the beginning of 2021. The new plan is widely seen as a firm commitment to electric vehicles. By 2025, deliveries of purely electric BMW models will increase by “more than 50%” on average per year, thus increasing more than tenfold compared to 2020. From 2025 onwards, the company will clearly prioritise electric vehicles in its product portfolio and will adopt a completely new vehicle architecture. By 2030, purely electric vehicles will account for at least 50% of global deliveries.
       BMW also plans to turn Mini into a pure electric brand. The last new Mini with a combustion engine will go on sale in 2025. By 2027, EVs will account for at least 50% of Mini sales, and by the early 2030s, the brand will sell only electric cars. CEO Zipse has said that BMW will “be uncompromising in its commitment to electric, digital and recycling,” but has no plans to make its own batteries.
       In a highly symbolic move, BMW said at the end of 2020 that it would stop producing combustion engines in Germany, convert domestic plants into electric vehicle plants, and move traditional car production to plants in Austria and the UK.
       Despite BMW’s focus on electric vehicles, there are currently no plans to phase out combustion engine models anytime soon. Zipzer insists that “a one-stop strategy could be very dangerous” and believes that combustion engines will be sold in some parts of the world within a decade. Other German automakers Volkswagen and Daimler have also not set phase-out dates, while Ford, General Motors and Volvo have announced they will phase out combustion engine technology sooner.
       Although BMW has been relatively slow to electrify its vehicle fleet, the Bavarian company was named the most sustainable car company in the world in 2020 by the Dow Jones Sustainability Index. This is because BMW places great importance on reducing the CO2 emissions of its cars in the production and supply chain. The company aims to reduce emissions over the entire life of each vehicle by at least a third by 2030 through innovation rather than offsets. “Specifically, we will reduce CO2 emissions by 80% during the production process, by more than 40% during the use phase and by at least 20% in the supply chain,” BMW said in early 2021. “Without corrective measures, the increase in electric vehicles will actually lead to an increase in CO2 emissions in the supply chain by around a third by 2030. As part of its sustainability strategy, the company has invested in innovative CO2-free steel production methods in an effort to reduce emissions.” steel supply chain by approximately 2 million tons by 2030.
       In response to three major industry “megatrends”: tightening environmental regulations, autonomous driving technologies and the sharing economy, BMW has entered into a series of cooperation agreements, most notably with its archrival Daimler and its Mercedes brand.
       German business newspaper Handelsblatt called it a “historic collaboration” aimed at “competing with Google and Uber.” In early 2019, BMW and Daimler agreed to form a broad alliance in mobility services, including a merger of BMW’s DriveNow car-sharing business and Daimler’s Car2Go. The two companies have launched five sharing brands: car-sharing unit Share Now, ride-sharing unit Free Now, parking service Park Now, electric vehicle charging service Charge Now, and Reach Now, which provides convenient booking services for various modes of transport. But the mobility services segment is struggling to make money, with media reports suggesting a partial sale is increasingly likely.
       BMW and Daimler have also pooled resources to curb the rising costs of self-driving cars.
       Climate activists continue to question the company’s true commitment to sustainable mobility. InfluenceMap, a UK-based NGO that specialises in assessing climate lobbying, said BMW “appears to have become more proactive in its climate-related policies in the transport sector since 2019.” Influencemap reported: “However, the company retains membership in a number of regressive industry associations and has repeatedly made statements opposing the transition to electrified transport before 2019. According to The Guardian, BMW has also actively lobbied for a delay” by the companies behind the UK’s combustion engine phase-out programme.