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BMW explains its electric vehicle plans in more details and it’s going in the right direction

We have been really suspicious of BMW’s plan for electrification mainly because they seem to have left an unnecessary 7-year gap in their electrification effort between the launch of ‘BMW i’ with the i3 in 2013 and the next ‘i’ vehicle, which is expected in 2020-2021. The weird-looking all-electric concepts that they have unveiled since are also not helping – pictured above.

At its shareholder meeting this week, the German automaker has laid out its plan for electric vehicles in more details and it now seems to be going in the right direction.

One of the main problems is that BMW has been doing really with plug-in hybrids and it seems to skewing them into investing more in PHEVs than all-electric vehicles, which we think is ultimately the end goal. There are significant differences between developing PHEVs and BEVs, and BMW seems more focused on PHEVs at the moment.

CEO Harald Krüger said at the meeting:

“Right now, everyone is talking about plug-in hybrids. Here, the BMW brand is clearly number one in the premium segment. And our BMW i3 is one of the top three best-selling pure electric cars worldwide. This shows we are in a strong position. And we continue to drive ahead: In 2017, we aim to sell 100,000 electrified vehicles, and by 2025, electric models and plug-in hybrids are expected to account for around 15 to 25 per cent of our sales. This means the electrification of all BMW Group brands and model series. Our goal is sustainable mobility. We are absolutely clear on this.”

But he followed up with a more comprehensive approach to BEVs:

“With our Strategy, we have decided that: The fully electric drivetrain will be integrated into our core brands, with: an all-electric MINI in 2019, and an all-electric BMW X3 in 2020. Soon, range will no longer be a differentiating factor. We are already concentrating on achieving an optimum balance between all relevant features: safety, range, and duration and life of the battery. We believe that our customers will benefit the most from this approach. We are keeping expertise in electric drivetrains, power electronics and battery cells within the company. We have more in-house value creation in electro-mobility than any of our competitors. This also brings cost benefits.”

It definitely sounds like an improvement on BMW’s previous vision for fully electric vehicles, but it sounds like they are still expecting low volumes.

They are talking about 15 to 25% of their sales being “electric” (PHEVs and BEVs) by 2025. It’s a significant increase from the current levels since they expect to sell about 100,000 electric vehicles in 2017 and BMW sells about 2 million cars per year. Therefore, we are talking about a 3x to 5x increase over ~8 years, but at the same time, batteries are expected to reach capacity and cost parity with internal combustion engines before fuel cost around the same time.

At that point, it will be difficult to even justify an internal combustion engine – assuming that the infrastructure catches up. They will likely have to change those estimates before the end of the decade and start investing more in the conversion of their internal combustion engine production assets in production capacity for electric vehicles. German competitors, like VW and Daimler, are already doing it.

While other companies, like Tesla, Lucid Motors, and Faraday Future, are planning new vehicle production capacity only for battery-powered cars.

In the meantime, BMW is happy with the sales of its current EVs. Krüger said that i3 sales were 55 percent higher last month than during the same month last year.

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