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BMW facing a threat in modern EVs

We’ve always been of the view that the inevitable transition to electric cars will be an existential threat to some of the established manufacturers. Having huge, unamortised investments in the architecture and supply chains of internal combustion engine cars, together with the legacy pension and social cost obligations will make the old firms less nimble and resistant to the sudden changes in business models needed to compete.

We didn’t think that BMW was one of those under threat given that it was an early adopter of EV technology with its i3 and (although not really an EV) i8. But these cars are getting long in the tooth and BMW is falling behind its German peers at Daimler Benz and VW. This article published on#cleanthechnica lays bare the problems facing BMW.

There are two telling quotes from BMW senior management

“Tesla made in the third quarter, at a good $6 billion in sales, $312 million profit. BMW came in the automotive segment at €21 billion to €784 million surplus. … Who deserves better?”

Tesla is making 40% as much profit as BMW from less than 30% of BMW sales revenue. So there is greater profits to be made from EVs and BMW are hardly in the game.

And this startling prediction from BMW’s head of R&D that  ‘….85% of BMW vehicles sold in 2030 will have a gas or diesel engine ..’

Given that BMW doesn’t make any commercial vehicles, if the head of R&D is saying that then that 85% might be 85% of not many cars at all in 2030 given that several of its key markets are committed to phasing out cars powered by diesel or petrol by then.

Read the well-researched story here.

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