Automotive
BMW’s Chief Financial Officer, Walter Mertl, revealed in a recent media roundtable that the corporate has reached a big turning point in its sales dynamics. Mertl stated that BMW now experiences nearly all of its sales growth from electric vehicles (EVs), marking a tipping point for traditional combustion engine vehicle sales. In line with Mertl, this transition occurred last 12 months, indicating a fundamental shift within the automotive market.
Mertl attributed the changing landscape to the plateauing of sales for combustion engine cars, predicting an additional decline within the near future. He pointed to impending environmental regulations as a key factor that may likely restrict the sales of traditional vehicles. Automotive manufacturers, including BMW, are feeling the pressure to speed up the event and production of electrical offerings because of regulatory deadlines in regions corresponding to China, the European Union, and certain U.S. states that plan to ban latest fossil fuel-emitting cars.
In 2021, BMW achieved a noteworthy milestone with a 15% share of all-electric vehicle sales. The corporate goals to extend this share to 33% by 2026, unveiling plans for six latest models in its exclusive “Neue Klasse” electric vehicle lineup. This initiative represents a considerable financial investment, reflecting BMW’s commitment to bridging the technology gap with competitors in the electrical vehicle market.
Nevertheless, Mertl acknowledged that the financial parity between combustion engine and all-electric cars inside BMW’s portfolio may not be realized until at the least 2026. He highlighted the upper costs related to introducing latest battery technologies for later electric models. Moreover, Mertl hinted at potential discounts for cars in specific price ranges, although he didn’t provide detailed information.
Despite the transitional challenges, BMW stays steadfast in its business objectives. The corporate goals to sell 3 million vehicles by 2030, maintaining an 8-10% margin in its automotive segment. This goal aligns with BMW’s conservative approach, falling below the expected 2023 margin of roughly 10.3%, as stated by Mertl. CEO Oliver Zipse emphasized in September that BMW expects to be “at the least as profitable” when selling the “Neue Klasse” electric vehicles at scale. This optimism is grounded within the anticipation of lower battery costs and increased efficiency per kilowatt hour for electric models.
Source: Reuters
FOLLOW US TODAY:
This Article First Appeared At www.automotiveaddicts.com
