BMW Exec Suggests Automaker Should Work With Elon Musk

JAN 10 2019 BY STEVEN LOVEDAY 80

This BMW exec knows the automaker must make its own batteries to surge forward with EVs.

In a recent interview with Manager Magazin, BMW works council chief Manfred Schoch stated that he believes BMW must make its own batteries to be successful with its EV future. This makes perfect sense since arguably the most successful EV maker — Tesla — has flourished due to its Gigafactory and partnership with Panasonic.

Schoch gave the utmost praise to Tesla CEO Elon Musk. He says that Musk’s decision to focus on EV battery production is commendable. In addition, the automaker’s decision to secure a viable partnership with a major player in the battery segment is praiseworthy. He shared (translated from German):

Tesla controls the entire value chain; they understood electromobility.

Tesla has far surpassed all other automakers on the electric car front. It’s really the only truly prosperous electric vehicle maker at this point, though company has struggled to show a continuing profit. Its investments in the future have been monumental, and Tesla is just finally catching up on its massive spending. Still, Schoch is of the opinion that BMW should be getting on board with similar plans if it wants to prevail. He asserts:

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

Many automakers are slowly adding electric vehicles into the mix. Still, BMW far exceeds many others. It currently only offers one pure-electric vehicle: The i3. However, it also manufactures plenty of plug-in hybrids that sell reasonably well. In the coming years, the brand intends to up the EV ante considerably.

Shoch sees communication and/or some type of partnership with Tesla and Elon Musk as a reasonable strategy to secure BMW’s electric car future. He says that there are too many complaints in the automotive industry and too many people claiming that certain progress is impossible. He points to Tesla’s achievements and concludes:

Our board members should finally deal more intensively with this gentleman [Elon Musk], who should have been bankrupt by now.

Source: Teslamag.de

Categories: Battery Tech, BMW, Tesla

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80 Comments on "BMW Exec Suggests Automaker Should Work With Elon Musk"

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BMW still doesn't fully get it

Wasn’t another BMW board member and one of their executives saying that there still is only a very limited business case for electrification in Q4 of 2018? BMW really needs to get their strategy together or go the way of the dodo…

Tesla Doesn’t need BMW Or any other Loser Traditional auto maker to BOG Tesla Down! These guys need Tesla & Tesla’s EV expertise , So now they’re Caving as they Lose the EV race… Too Bad So Sad ! * 🙂 * NOT ! .. It Looks Good on all of The Traditional auto KNOW IT ALL’S !

Tesla makes the best software, battery management system electric motor. and bring new interesting solutions with there clean slate apporage, BMW has on the other hand premium build quality, and there carbon reinforced plastic light body structure would bring what Tesla needs most a decrease in weight.

Carbon is no rocket science. Tesla could do it, as could anyone else — it’s just too expensive.

Correlation is NOT Causation.

If carbon fiber was truly rocket science, the people at SpaceX would probably be understand it, seeing as they are actual rocket scientists.

But it’s not, it’s just as you said – too expensive.

SpaceX does use carbon fiber as part of a reinforcement composite for the LO2 tanks, I think. It’s probably not rigid enough for the rocket body, though, which is probably why they went with the aluminum-lithium alloys.

I think I heard from Autoline that BMW sold off their carbon fiber manufacturing. Not sure of this, has someone has any knowledge about this matter?

It’s not too expensive as not much is used but there are better, much lower cost composites that work better in auto service.
They don’t want composites to succeed as the i3 shows but it will as done right weighs, costs 40% less for the same room, performance.
Best I’ve found and I have 45 yrs experience is medium tech FG, Kevlar type and various cores, foams is the strongest, lightest, safest, lowest cost way to build an EV.
The Tesla Roadster, pickup and semi are, will be composite bodies at least so Tesla is putting their toe in the water. Though I doubt they’ll give up the metal chassis anytime soon.
I’m doing a 63 Vette coupe looking all composite EV, got the body, working on the chassis now.
On BMW, they better start getting to EVs, getting cell supplies for all of them for most of their production or they will be toast, like the rest of big auto.

The rocket science is to make it cheap. That is why everyone was kind of shocked when they saw the i3.

BMW sold its stake in the Moses Lake CF manufacturer, where have you been? Space X ( Musk other co.) has CF experience making CF for its Rocket fairings

Tell me, why do you believe Teslas BMS is the best?

BMW tried using a carbon fiber body for a mass-produced car: The i3. That was touted as bringing the price on making a carbon fiber polymer car body down to below the cost for a steel body. But BMW hasn’t done it since, so it looks like they regard that as a failed experiment.

I think partnerships with old guard auto companies would be great. Elon Musk has repeated time and again that in order for the rapid transition to EVs and renewable energy to occur, it is going to take a lot more than Tesla. Ultimately all auto companies are going to have to get on the EV bandwagon in order to survive (for themselves and ultimately humanity). I’d much rather they do it honorably, than fighting it every step of the way while simultaneously making PR claims that they are going to be the ones to take EVs to the next level, seemingly ignoring what Tesla has already done.

They could just buy Subaru instead.

Cheaper to start from scratch without a dealer network. They can build their new GFs in 2.5 yrs or so and more than 1 at once so makes no sense to buy problems.
Maybe buy a Subaru plant, but certainly not the company. They would prefer to sell Subaru batteries, motors, controllers instead.

“It’s really the only truly prosperous electric vehicle maker at this point, though company has struggled to show a continuing profit.”

What is the over/under on how many consecutive quarters Tesla will have to show profitability before statements like this end up in the rubbish bin?

But yeah the rest of the article is on point – I don’t know that Tesla would work with BMW at this point, but copying them and using their much stronger balance sheet would make it easier to do than what Tesla has gone through.

Due to its extreme investment in the future, I couldn’t care less that Tesla hasn’t recorded a profit. However, when we call an automaker ultimately successful, the haters, naysayers, and short sellers comes out of the woodwork and harass us personally with the whole profit situation. Oh well, is what it is. Just being honest.

Steven Loveday You don’t even have to be “successful” for the haters, naysayers, and short sellers to come out. I know you still remember when Tesla first released the Model S and the years after that. All the “but they are not profitable”, “the only sell one car”, “they will fail in the next year”, and don’t forget any Bob Lutz comment.

Altho I emphatically agree with Steven on everything he said there, I do agree with the haters, short-sellers etc. on one thing: Tesla will eventually have to start making a profit on a regular basis, if they are gonna stay in business. In fact, I think Elon knows that Tesla has reached or passed that point, or he wouldn’t have made such a big deal about Tesla showing a profit in Q3 2018.

Making a profit selling high priced product in a booming economy where you have no competition should be a no brainer.
Repeating the same in a slow economy with competition is a completely different strategy.
When the ecomony slows significantly or when there will be a true competitor is not clear, but I’m guessing 2021. So until then, you will see this type of comment from those who have experienced it many times.

Nah, these comments come from people who said it will never be profitable at all — they are just moving the goalposts, again.

Bull’s-eye.

Given their eating Mercedes lunch in u.s. you cannot rightly say without competition.

Having listened to Sandy Munro talking enthusiastically and at length about the astounding level of improvements in the Tesla Model 3, as compared to what other auto makers are doing… I don’t think Tesla is in any danger of getting any real competition for at least several years. In fact, my guess is that Tesla will be like Ford in its heyday: They will easily stay ahead of all possible competitors unless and until they spend years resting on their laurels instead of pushing ahead with new innovations.

https://insideevs.com/munro-tesla-model-3-china-profit/

This would an extremely smart move by BMW, if Tesla is willing to sell a custom pack at a price BMW can handle. This would allow them to transition to a high performance pack while they await solid-state batteries that may level the playing field and reduce the amount of effort needed to keep the battery healthy.

Tesla is extremely unlikely to be willing to sell battery packs to any outside party for the foreseeable future. They’re having a hard enough time supplying their own production. If Tesla had a lot of excess capacity for making battery packs, they wouldn’t be backed up so badly on PowerWall sales and installations.

Wow talk about lost in translation…. “BMW Exec Suggests Automaker Should Work With Elon Musk”

What he said was more like they should “look into this gentleman”. Not make business with him.

Actually its more a suggestion for BMW’s executives to make a better job of confronting Elon Musk which is definitely not the same as working with him. Also “Who deserves better?” should read “who makes better earnings”, makes more sense no?

I don’t think it’s about confrontation — just about looking more closely what he is doing…

I see this statement “Our board members should finally deal more intensively with this gentleman [Elon Musk], who should have been bankrupt by now.” as one of – ‘How do we remove this competitor?’, rather than – ‘How do we hook up with this player!’ It sounds like you are getting that Vibe, too!

Also, it’s not “should be bankrupt”, but rather “was supposed to be bankrupt”…

This insisting on going the hybrid way is typical of legacy automakers, never in my life have I seen an industry move as slow as automotive, that is until Tesla came along. I can’t remember the last interesting news from this industry since ABS and airbags. It’s one long line of changing from chrome to body colors and back again.

Don’t forget car generations are 5-7 years. They aren’t moving slow they are just moving at their normal pace. Even the Model S is 7 years old. It’s had some facelifts and software upgrades, but in general by auto standards it’s old. 2020 became a big date for automakers back in 2015/16 because it takes a couple years to design, develop and finally put into production.

Point is that their normal pace is probably too slow, when EV market share is increasing tenfold in the course of one traditional generation…

Sure, but the EV revolution is a disruptive tech revolution. Those don’t come along very often. There hasn’t been one in the automobile industry since the early years of the Model T Ford.

If you follow the pack the dealership lots model…

The Tesla model is continuous improvement with some step changes.

I once worked on a Chevy where they knew the part would fail early but they kept making the car for a year and a half with same part to run out the part’s inventory.

The ModS and ModX has been successful in helping Tesla in its mission of raising funds and getting Brand recognition , now everyone wants to make a “Tesla Killer”, as Tesla has set the standard,panel gaps notwithstanding, engineers for that are a dime a dozen as Sandy Munro says. The Software integration and Powertrain of Tesla is on a different level altogether.

They’ve invested billions into ICE, hydrogen and do not believe EVs are the future…Our current administration is not EV friendly and even if the next administration is, the one after may not be…You mention features as interesting news, number of airbags have steadily increased, all vehicles now have a backup camera, some have active safety features standard and others will in the near future…

These features were pushed y the insurance companies , not the car companies

“…never in my life have I seen an industry move as slow as automotive…”

As compared to what? The computer or cell phone industry, or something else based on electronics? I think electronics, driven by Moore’s Law, is the only industry changing faster than the automobile industry, which is certainly changing faster than, for example, the clothing industry.

If you want to look at an industry that is static, look at something like making pencils.

Too late…

I think that 2019 is the final call for automakers to get serious about EV development. The train is about to leave and you’re either on it or left behind for good.

I would say that we’re already beyond the point where they have to get serious about developing competitive EVs, but we’re not yet at the point where those vehicles need to be on the market. Cars have long R&D cycles, and I think we’re still in the “EV penumbra” zone, but it won’t be long — perhaps a year or two at the most — before car makers with no major EVs in their showrooms are seen as being conspicuously behind.

This is why I keep yammering here about what Honda and Toyota are likely doing behind the scenes. I would be stunned to find out that they don’t have a decent range Clarity BEV and Prius EV (all but) ready to go. Nissan is talking about 4 new BEV Nissans and 2 new BEW Infinitis, VW is promising roughly a bazillion new BEVs, etc.

We’re right on the brink of the EV big bang moment. Buckle up, buttercups.

If they are really serious, they are developing dedicated platforms, not just BEV Priuses and Claritys.

Toyota at least has a dedicated department since 2016 — so we should assume they are developing dedicated platforms.

Of course, just days ago they claimed BEV will only have 4 – 6% market share in the second half of next decade… But I’m fairly sure they don’t really believe that: just trying to scare competitors into slowing down, so they get a chance to catch up — like FCA was doing until recently…

Tesla partnered with Panasonic so no reason that BMW and others cannot partner with LG and other battery mfgs. to gain profits from the single biggest dollar component of the car. Panasonic owns 33% of the Tesla gigafactory. Could see LG/BMW making the same arrangement.

interesting that Tesla gross profits were 5.2% while BMW’s on sales three times that were 3.7%. BMW seems to imply the profit differential was the 66% of battery sales.

These are net profit figures. Gross is currently ~25% for Tesla, and probably similar for BMW…

Erm… the title is misleading. He is head of the workers union at BMW.

And I thought, you guys despised unions. They always suggest things that will destroy a company or something…

Agreed, title is misleading. He is on the board though.

Of course the head of the workers union is a board member. That is the law.

That is a law that we need in the US – the disconnects in understanding, in pay and benefits, in strategy, in solving problems, etc., are so extreme that the companies are not anywhere near reaching their potential. When I first heard about Germany’s law about the composition of company boards, I was shocked and thrilled to death!! It should be standard everywhere.

What people so easily forget, in this day and age of “profit is the true product”, is that labor is an even-up exchange between equals, not subjects! You need a job done for you, I have the expertise, you pay me commensurate with your job requirements, my skill, my experience, and the current standard of living, and then we’ll have a deal.

The indentured servitude of the 20th century must die if we are to grow as a species.

It’s not workers union, but workers representative. Entirely different organisation. You are probably right though that this doesn’t count as an executive position? Not sure. It is a board position though, i.e. he does have say in strategic decisions.

(Also, it’s Elon who despises unions, not InsideEVs…)

Arn’t both those titles normally held by the same person?

That’s about as good a compliment as your gonna get from your competition, not bad.

Game on! I wouldn’t call BMW “a loser car company”.

Statements like this one below: ” Tesla Doesn’t need BMW Or any other Loser Traditional auto maker to BOG Tesla Down! These guys need Tesla & Tesla’s EV expertise , So now they’re Caving as they Lose the EV race… Too Bad So Sad ! * 🙂 * NOT ! .. It Looks Good on all of The Traditional auto KNOW IT ALL’S !”

Taking an arrogant attitude like this leads to … frankly … disaster.

There are some people, to whom I (and likely other Tesla fans) would like to say: “Please stay off my side! You’re giving us a bad name.”

Tesla certainly could use some input when it comes to improving quality in making car bodies and dealing with things like panel gaps.

I agree with Sandy Munro when he said (paraphrasing here) ~”The people buying Tesla cars… they want a car that works like an iPhone; they don’t care about panel gaps.”~

But it certainly wouldn’t hurt Tesla to improve the build quality of their auto bodies up to German auto maker standards. Now, if Tesla could make auto bodies as well as they make what goes inside the car, such as the electric motors… then everyone would be praising the amazingly high quality of Tesla car panel gaps!

This article is completely backwards. The head of workers union had pleaded to the BMW executive board to finally start targeting Tesla head on.

That would make sense to me…

I just did some google searches and BMW sells 2.4M vehicles annually, including 300K in the USA. Tesla is becoming a force in the luxury car space and could be a threat to BMW.

Tesla already overtook all of them in the luxury sedan segments since 2015 – they’ve been concerned for a long time, and everybody in the automotive space knows the names “Tesla” and “Elon Musk” very well.

He is the workers representative. Of course he argues in favour of bringing more jobs in-house… Doesn’t necessarily mean it’s best for the company.

BMW was number 4 in the USA last year in plug-in vehicle sales behind Tesla, GM, and Toyota. They have 6 different models available here. And they have learned enough about EVs to know that batteries and motors are the new drivetrain and key components and that quality supplies of these is crucial to mass production. That they would seek to learn from or deal with Tesla, seems who has a major head start on them, just makes them look a lot smarter than Daimler/Mercedes or VW/Audi.

The easiest collaboration entry for BMW would be charging protocol and infrastructure. Partner with Tesla with one BMW EV Model that can use the Supercharging Network to gauge demand. If that proves successful expand partnership with other vehicles.

NPNS! SBF!
Volt#671 + BoltEV + Model 3

I think most manufacturers are too proud or afraid to Lose face if seen working with Musk. What other manufacturer has been willing to work with Musk on Tesla’s Superchargers but instead making their own network. Other manufacturers will be burning through cash like Tesla did for the EV infrastructure plus laying off gas engine building employees. Let’s work together and not let personalities get in the way like our USA government!

Just think what Tesla’s DATA servers are work running the Tesla network of cars? Billions!!!!!!!!

Wrong translation.
BMW Exec didn’t said “should work wit Musk” but “we should deal with Musk”.

to deal with sth. [a subject, theme, problem etc.] – sich mit etw. auseinandersetzen

Old executives that don’t have love of EVs should be slowly removed…only young people have passion of EVs, it’s hard to get old ones to love what they’ve hated all along. Most executives if not all always say you can’t you can’t you can’t especially on battery tech. Tesla may not have the best German quality but their battery technology is lightyears ahead and this is without talking about Solid State Batteries.

They need to hire people passionate about electric cars and its technology, not force old ICE lovers to adapt because they’ll come up with endless excuses as to why electrification won’t work.

Like i said before so many times , panel gaps and fit&finish flaws are overrated ,Tesla is years ahead in all things BEVs,from the Sales perspective & Service to the EV Power train to the Connectivity of its cars & network+OTA ,it is after all a Silicon Valley Co. not to forget the mission of Sustainability and getting us off oil, until everyone in the Auto Bznz commits to these same mission nobody is going to match Tesla.

Damn! That is throwing some serious shade on his own company.

But BMW is lucky to have someone that is admitting some objective truths even if they are painful.

Is BMW willing to join the Supercharging network? Musk often said the door is open to any automaker willing to share the cost and add fast charging, but nobody made a deal with the little mouse Tesla. Now Tesla is “The Mouse that Roared.” like the Peter Sellers movie, where the big countries of the world end up paying homage to a tiny little kingdom.

No, they are building their own network right now (Ionity), that can deliver more power than current superchargers. As well Tesla needs to switch to charging standards first.

No auto maker of any size, or any one with aspirations to grow to any size, is going to put its customers at the mercy of a competitor, which is what joining Tesla’s Supercharger network would entail.

They won’t for the same reason that Toyota isn’t gonna put itself at the mercy of GM by using GM engines in their cars.

Ain’t gonna happen.

He is head of the labour union (IG Metall) at BMW and therefor has the objective to create as many jobs as possible. He is in the council, because he is in the union. That should be told. You can’t compare his goals to the strategy of other BMW execs.

Indeed. Mr. Schoch is NOT an executive. The peculiarities of the German “Mitbestimmungsgesetz” need to be understood: Every German board is nominated half by the ownership side, half by the employee side. Ownership side always nominates head of the board (which is important in split decisions), employee side nominates deputy head. This is Mr. Schoch. This board is named “Aufsichtsrat” which can be translated as “overseeing council”and it has NO executive function other than naming the persons for the “Vorstand”, and evaluating some decisions and reports by this Vorstand. The “Vorstand”, the real executive council headed by the CEO makes the decisions.
It is Mr. Schochs job to move as many employees as possible onto BMW’s payroll, as OEM employees are better paid than suppliers’ employees, and the percentage of union workers is higher at the OEM. This creates high membership fees for Mr. Schoch’s union.

“This creates high membership fees for Mr. Schoch’s union.” No. More fees, yes, since there are more employees to represent, which requires more time and resources. But not higher fees. Nobody profits from union dues.

People compare large companies to aircraft carriers, “It ain’t gonna turn on a dime”. But that analogy is fundamentally flawed. Aircraft carriers can change direction at the command of its captain. The big companies are more like head cowboy pushing a herd to the stockyard. Every damned steer will have its own idea of where to go and how fast.

wow. here is 1 executive that is FINALLY getting it.
All of the legacy car makers MUST make their own batteries or die.
And going with Chinese batteries is the fastest way to guarantee that they will lose to Chinese car makers.
the reason is that they will pay 1/2 of the price that the others do.

“BMW works council chief Manfred Schoch stated that he believes BMW must make its own batteries to be successful with its EV future.”

I’ve been saying for years that legacy auto makers are going to have to partner with battery cell makers build factories which whose output the auto makers control, if they’re going to start making and selling long-range plug-in EVs in large numbers.

Good to see that some auto execs are finally beginning to see the light.

The idea is to get as many ICE vehicles off the road ASAP. This war is on fossil fuels #big oil
Tesla…even at insane expansion will take decades to even dent the market by themselves. If you can partner up to slay the dragon faster then so be it…as long as it’s Tesla doing the leading…I could care less who comes calling for help….even Bob Lutz with tail between legs is welcomed.

A wotkscouncil is an employee otganisation so while an intresting take, not sure it counts as a bmw exec

The question is: Would Elon Musk want to work with BMW? I think he’s doing pretty well on his own.

Problem is too many big egos to set aside to work with Musk who wants to be known as the battery guy! With Space X this man should be praised for all he has accomplished. He is a what America is about, The American dream is still alive. Men like him makes countrys great. Wish him the best and onto Mars to save humanity!