BMW has fallen behind in the race for electric vehicles
MUNICH – Eight years ago, BMW was one of the first major automakers to sell a battery-powered car: the i3 broke new ground with its lightweight carbon fiber body and aluminum chassis.
But lately the German company, known for its sporty luxury cars and “ultimate driving machines”, has fallen behind in the global race to develop the next generation of electric vehicles.
Unlike General Motors or Volvo, BMW did not set a date to bury the internal combustion engine. Unlike Volkswagen, it didn’t start selling a full line of vehicles designed from the start to run on batteries. While other auto executives are optimistic about an electric future, Oliver Zipse, BMW’s chief executive, criticized the European Union’s plans to ban gasoline and diesel engines by 2035.
“I’m a little concerned about BMW,” said Peter Wells, director of the Center for Automotive Industry Research at Cardiff Business School in Wales. When it comes to committing to a full range of electric vehicles, he said, “they’ve been pretty ambivalent.”
The perception that BMW is a lagging electric vehicle helps explain why investors began to depreciate the company’s shares, which fell even after the company reported healthy quarterly net profit this month of 4.8. billion euros, or $ 5.7 billion. BMW shares have fallen 18% since early June.
At BMW headquarters in Munich, company executives say they will prove critics wrong in the months to come. In the fall, BMW will begin selling a battery-powered sport utility vehicle, the iX, in Europe; it will arrive in the United States early next year. The iX will be the first BMW since the i3 designed around battery power, rather than being a conversion of a gasoline or diesel car.
“Maybe you haven’t seen much, but we’ve worked hard,” said Adrian van Hooydonk, design director at BMW, in an interview with BMW World, the company’s showcase at Munich.
BMW executives say the iX manifests a commitment to electric drive that only falls short of its rivals at the bragging level. They cite the dedicated research center in Munich where BMW is developing its own battery technology. They point out that BMW is designing a collection of specialized components that will underpin a family of electric vehicles from 2025, when they say the market will take off.
BMW illustrates the difficult calculations established automakers must make as the industry shifts to electric power. It takes four or five years to design a new car, equip a factory to build it, and organize a network of suppliers. Auto executives need to make billion dollar bets based on their best estimates of what car buyers will want in half a decade and what kind of technology will be available.
No one is quite sure what type of EVs will prove to be popular as the market expands beyond early adopters, who tend to be wealthy and environmentally conscious. Will they want car designs that signal a break from the past? Or will they want electric cars that look and run like the gas models they’re used to?
It is too early to tell. Sales of electrified vehicles are growing rapidly, but remain below 4% of the total market in the United States. The market is dominated by Tesla, which is building a factory in Berlin. Tesla’s Model 3 is the best-selling electric car in Western Europe, where plug-in vehicles accounted for 17% of new car sales in the first half of the year, or one million vehicles, according to Schmidt Automotive Research in Berlin.
The i3, which BMW started producing in 2013, was a lesson in the dangers of going to market too early. The carbon fiber body mounted on an aluminum chassis won design awards and was a feat of engineering, but it was expensive to produce. Few were willing to pay more than $ 40,000 for what was essentially a hatchback that could only go about 80 miles on a charge. Later models have improved batteries and can travel over 150 miles between charges.
BMW continues to produce the i3 and has sold around 210,000 since 2013, but ceased sales in the United States in July. BMW executives reject the idea that the i3 is a mistake, saying they have learned valuable lessons in electric vehicle technology, such as making more efficient engines.
“It wouldn’t be without the i3,” said Frank Weber, BMW board member responsible for development, as he drove a brown iX through the streets around the company’s headquarters.
BMW waited eight years to come up with a sequel to the i3 because executives realized they needed a car that could cover over 600 kilometers, or 370 miles, on one charge, said van Hooydonk. “With the iX, we have it now,” he said.
Unlike Volkswagen and Daimler, which build their own battery factories with partners, BMW buys batteries from suppliers like Northvolt from Sweden and CATL from China. BMW, like its competitors, is also developing its own technology. At the Munich research center, the automaker is looking for chemical recipes that will be safer and lighter and store more energy per kilogram. Suppliers will build batteries to BMW specifications.
The laboratories at the center are equipped with electron microscopes that allow scientists at BMW to observe what happens to molecules inside battery cells when they are repeatedly charged and discharged. There is a fire retardant room where BMW can work on ways to prevent the batteries from overheating.
BMW even gives its suppliers advice on how to manufacture more efficiently. On a table in the research center lay three objects that looked like precision-machined egg beaters. They were part of a test to see who most effectively mixed the graphite slurry which will then be painted onto a thin layer of copper and dried to form electrodes – critical parts of a battery.
“We challenge the suppliers,” said Martin Schuster, BMW vice president responsible for battery development, during a visit to the research center. “Otherwise, we get what they have on the shelf.
Shortly after the iX arrives at European dealerships in the fall, BMW will begin selling the i4, a battery-powered, high-performance sedan. As a short test drive in Munich demonstrated, the i4 has the kind of blazing acceleration that electric power can provide. But the i4 shares components with BMW models equipped with gasoline engines, a feature that has drawn criticism.
Until 2025, BMW’s strategy will be to sell the optional battery power available on all of its major models. Initially, most electric BMWs will be adaptations of their internal combustion cousins.
Analysts are skeptical that such conversions will be able to compete with cars designed from the ground up to be electric and fully exploit the benefits of battery power. Electric cars have smaller engines and transmissions than conventional vehicles, potentially freeing up space for passengers and cargo.
“BMW takes a conventional car and turns it into an electric vehicle,” said Ferdinand Dudenhöffer, founder of the Center for Automotive Research in Duisburg, Germany. “There will always be compromises. “
In 2025, BMW plans to start building vehicles on a platform – a set of components that can be shared by many different models – optimized for battery power. This is the year many analysts believe electric vehicles will become cheaper to buy than gasoline models and sales will take off.
If so, BMW’s timing could turn out to be perfect.
So far, however, the market has moved faster than expected. In Europe, sales of electric vehicles have exploded during the pandemic. In the United States, the Biden administration gave EVs a boost this month by unveiling a plan to increase EV sales to 50% of new cars by 2030.
Even BMW’s detractors ignore it. “They are fantastic engineers,” said Mr Wells of Cardiff Business School. “They can do it if they want to.”