BMW To Streamline Vehicle Equipment To Free Up Money For EV Development

1 week ago by Mark Kane 13

BMW i3 production

Automakers are between the hammer and the anvil these days, as they need to invest more than usual into new technologies (electrification, autonomous, connected cars, etc) while still keeping a balance between revenues and costs.

BMW i8 Production

BMW for example spent €5.16 billion on R&D last year, which was 5.5% of revenues, but in 2017 through 2019 the company still intends to spend between 5.5 to 6% of revenues.

To assist on the balance sheet side, the German manufacturer will cut costs, decreasing the number of engines and equipment choices for its products.

BMW’s finance chief Nicolas Peter said:

“We have over 100 steering wheels on offer. Do we need that many variants?”

“In the 5 series we have four diesel engines on offer. I would not bet on there being four diesel engines on offer in the next generation vehicle,”

In the U.S., BMW will drop its manual gear shift in the 2 series Coupe, as well as in the entry-level versions of the new 5 series diesel.

According to BMW, plug-ins (at least now) are less profitable than conventional models, which also makes the transition to electrification more demanding.

source: Reuters

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13 responses to "BMW To Streamline Vehicle Equipment To Free Up Money For EV Development"

  1. BillT says:

    After reading the M3 first drive review over at Motor Trend I have to believe BMW is puckering pretty badly about the future of 3 series revenue right now. The i3 certainly demonstrates BMW has some pretty strong engineering talent so I am puzzled why they seem to have backed off on the i5. I think that vehicle could have help them protect the lucrative X3/X5 class market share from the upcoming model Y. In my opinion, they should really be looking ahead to getting a model Y competitor out ahead of or as close to as possible when the Model Y hits. Clearly they missed the boat on the M3 but they should skate to where the puck is going
    next.

    1. alohart says:

      Pretty confusing when talking about BMW and writing “M3” but apparently not referring to a BMW M3 which would be a competitor to the eventual performance version of the Model 3.

      1. Pushmi-Pullyu says:

        Hey, it’s not our fault Elon abandoned the “Model ≡” logo. 🙂

      2. Gazz says:

        Tesla M3 is an abbreviation. Use “M’3” to help us and keep BMW types happy about their slow cars 😉

  2. ffbj says:

    Yes, I imagine their clean-diesel program will suffer under their new regime.

  3. WARREN says:

    Have to give them credit for pursuing the less profitable plug in segment with more models than most of their direct competitors. That’s are hard financial pill to swallow when your competitors can jump in any time utilizing the info and risks that you already took.

  4. SJC says:

    BMW has deep pockets and a tech advantage.

    1. Windbourne says:

      Bmw does have deep pockets, but they do NOT have a tech advantage. In fact, if any of the legacy companies had tech advantage over Tesla, then they would be producing loads of EVs and destroying Tesla.

    2. Jelloslug says:

      I had an i3, they do not have the tech advantage.

      1. SJC says:

        Advantage over other real car companies, Tesla has been lucky so far.

  5. GibsonRS says:

    I find BMW hard to fathom.
    They invested heavily in low weight technologies and EV tech ahead of other legacy manufacturers.
    Their sales continue to grow, they haven’t been hit by huge fines, they are profitable ….. but they really seem to be on the back foot over the transition to electric.
    As others have said the i5 was a golden opportunity – really not sure why they didn’t seize it.

  6. ffbj says:

    It seems to me that Tesla is holding the best cards. They have no legacy ice business. They don’t have governments and class actions, coming after them for cheating on diesel pollution standards.

    They can focus on just ev’s, which is the preferable method of motivation.
    So that they legacy business and everything it takes to support them, is like albatross around their necks.

  7. JayTee says:

    I think the risk with Tesla is that someday the government money will dry up.

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