26 March, 2018

BMW to wait until the time is right for cost-effective EV mass production

The race for supremacy in the electric car market is ongoing as premium brands look to steal a march on each other during development. However, financial viability has seen BMW state it will not mass produce models until 2020.

The German manufacturer is one of the few that currently offers an electric vehicle (EV) line-up, with its i3 city car and i8 hybrid model. The company is currently working on different generations of battery, software and electric motor technology since the i3 was launched in 2013.

However, the company is working to make EV technology more modular and scalable, which in turn would make mass-production commercially viable. BMW recently announced that it would increase investment in the technology to €7 billion, and has signed a number of commercial deals, including one for the supply of cobalt, needed to build the vast numbers of lithium-ion batteries required by the vehicles.

‘We wanted to wait for the fifth generation to be much more cost competitive,’ Chief Executive Harald Krueger told analysts in Munich. ‘We do not want to scale up with the fourth generation. If you want to win the race, you must be the most cost competitive in the segment. Otherwise, you cannot scale up the volume.’

The cost advantage between BMW’s fourth and fifth generation electric vehicle technology was a ‘two digit number’ in percent terms, Krueger said. He did not offer precise figures.

The comments highlight the issue facing vehicle manufacturers at present. As the global market for diesel vehicles falters, rising CO2 levels mean potential trouble for those whose fleets do not meet strict targets set out by the European Commission for 2021. Pure EVs offer a solution to the drop in diesel sales, as petrol-powered cars emit more CO2 than their oil burning counterparts. The uptake of electric technology is slow, with many concerned about low ranges and long charging times.

BMW builds vehicles featuring electric technology at ten plants around the world but is currently focused on hybrid powertrains. The company wants to bring 25 new electrified models to market by 2025, of which 12 will be pure EVs. Thanks to a new production method available from 2020 onwards, BMW will be able to make all its cars with pure electric, hybrid and combustion engine variants.

The manufacturer will also be building an electric version of its Mini at plants in the UK and China, which will hit the roads in 2019, and will start production of a battery electric version of the X3 off-roader in 2020.