BMW’s EV sales surge as combustion engine ‘tipping point’ is in the rearview mirror

BMW is experiencing a major shift in its sales trends, with the majority of its growth now coming from electric cars rather than combustion engine vehicles. In a media roundtable, CFO Walter Mertl revealed that the tipping point for combustion engine sales had already been reached, and that sales of such vehicles are expected to plateau and then decline due to impending environmental regulations.

Mertl emphasized that BMW must focus on increasing its electric vehicle offerings to meet regulatory deadlines in key markets such as China, the European Union, and certain U.S. states that are set to ban sales of new fossil fuel emitting cars in the near future. With a 15% share of all-electric sales achieved last year, BMW plans to raise that to 33% by 2026 through the introduction of six new models in its “Neue Klasse” EV-only line, committing to a multibillion-euro investment to bridge the technology gap with its competitors.

However, the transition to electric vehicles is not without challenges. Mertl noted that profit margins for combustion engine and all-electric cars are not expected to reach parity before at least 2026, primarily due to the higher costs associated with introducing new battery technologies for electric vehicles, as well as potential discounting for cars in certain price ranges. Despite these challenges, BMW is sticking to its target of selling 3 million vehicles by 2030 with an 8-10% margin in its automotive segment.

Meanwhile, CEO Oliver Zipse has expressed confidence that the company will remain profitable with the introduction of the “Neue Klasse” EVs, citing lower battery costs and higher efficiency per kilowatt hour as key factors in maintaining profitability. It is evident that BMW is positioning itself to navigate the changing landscape of the automotive industry by prioritizing the expansion of its electric vehicle portfolio.