Just ahead of his elevation to the position of CEO at BMW in 2019, then production head Oliver Zipse spoke at an event at the Mini plant in Oxford about the need for caution when it came to EVs.
“Flexibility is key,” he told journalists. “If we predict the success of [the BMW] 3 Series, we can be pretty much spot-on. To predict electromobility is much more difficult.”
Five years later, BMW is reaping the rewards of its more circumspect strategy. In July, the company actually sold more electric cars in Europe than the global EV leader Tesla, according to market research firm Jato Dynamics.
But BMW’s EVs are even today still just adapted versions of combustion-engined models, built on the same production lines.
Back in 2019, BMW stood in opposition to the Volkswagen Group, which was about to show the first model based on its EV-specific MEB platform, to be built at a plant outfitted for just that platform.
Indeed, the ousting of Zipse’s predecessor Harald Krüger was widely attributed to his failure to provide clarity on BMW’s own EV strategy after becoming a pioneer with the well-liked but costly i3.
BMW gambled on a cautious approach. Rather than redesigning the car to unlock the potential of the electric drivetrain (for example by liberating more cabin space, as Volkswagen claimed), it offered electric as just another drivetrain choice.
“You won’t feel difference as a customer. You maybe will find 2kg here and 2kg there, but that is not relevant for a buying decision,” Zipse said back in 2019.
Fast-forward five years and not only is BMW is Europe’s number-two EV seller, but it also has buoyant profits, at €3.7 billion (£3.1bn) in the second quarter to the end of June, translating into a margin of 10.5%.
“Many years ago, we bet on the right strategy to be as flexible as possible,” Zipse said on the company’s second-quarter earnings call. “You're better prepared if you have ultimate flexible portfolio and an ultimate process competence to react to these things.”
This much cheaper strategy is now seen as the gold standard for companies as they recalibrate for a lumpier demand for EVs than expected.
“Car companies at the moment are forced to work with two three drivetrains: BEV, hybrid or ICE. What we see is that flexibility is very valuable,” said Ingo Stein, head of automotive at consultancy Bain & Company. “You can balance the demand shift much easier than a company that produces different cars with different drivetrains.”
In Europe and particularly the US, companies are shifting more of their production to hybrids after the expected EV boom hasn’t materialised at the speed first envisaged after Tesla’s original spectacular stock rise.
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