The BMW Group has entered 2021 with ambitious targets for growth and profitability and will be putting the first forerunners of its far-reaching technology offensive on the roads in the coming months. At the same time, it has set the course for a comprehensive realignment. From the middle of the decade, a new generation of models will take premium mobility to a new level from a technological perspective.
German luxury automaker expects deliveries of fully electric models to grow by well over 50 percent annually on average by 2025. According to BMW, all-electric models will account for at least 50 percent of global deliveries by 2030.
“The BMW Group has ambitious plans for 2021. We have started the new year with strong momentum and are aiming to return to pre-crisis levels as swiftly as possible – and go even further,” said Oliver Zipse, Chairman of the Board of Management of BMW AG, in Munich on Wednesday. “We have a clear roadmap for making the transformation of our industry a real competitive advantage for BMW in the coming years: uncompromisingly electric, digital and circular.”
“2021 is all about growth for us. At the same time, we are prepared to respond flexibly,” said Nicolas Peter, Member of the Board of Management of BMW AG, Finance. “We always think and act long-term; by making the right decisions today we are setting the stage to achieve our ambitious strategic goals for 2025, 2030 and beyond.”
Electric, digital, circular – a clear roadmap for transformation
The BMW Group is driving the transformation towards fully electric connected mobility in three phases. The first phase involved pioneering the e-mobility venture with Project i, embracing the new technology and ultimately transferring electric know-how to series production. Over time, this technology has become integrated across the entire product portfolio, particularly in the form of plug-in hybrids. Apart from the electric drivetrain itself, other key factors driving the transformation include software and the digital interaction with the vehicle.
Back in 2014, the BMW Group created the option to book and pay for services online, directly from the vehicle via the BMW Connected Drive store. Moreover, since 2018 BMW drivers have been able keep their vehicle software up to date via remote software upgrades, similar to downloading the latest software for a smartphone.
The second phase of the transformation began with the option to choose the preferred type of powertrain – from combustion engines through to fully electric power – in one and the same model. The prerequisites are smart vehicle architectures and a highly flexible production network that enable maximum interchangeability between the various drivetrain forms when optimally combined.
World’s largest fleet featuring over-the-air upgrades on roads by end of 2021
In terms of digitisation, the BMW Operating System 8, which is scheduled for launch in 2021, is the most powerful in-vehicle data processing system the BMW Group has ever developed. The new operating system makes every BMW a digital powerhouse with the ability to perform over-the-air upgrades at amazing speed.
This year, the BMW Operating System 8 will be installed for the first time in the all-electric BMW iX, forming the basis for the eighth generation of BMW iDrive – the simplest and safest operating concept to be installed in a vehicle. Both technologies will be subsequently rolled out across the various model series. The number of vehicles that can be updated with remote software upgrades also continues to grow rapidly. By the end of 2021, with well over two million units, the BMW Group will have the world’s largest fleet of vehicles capable of installing new or upgrading existing functions over the air.
Going forward, the BMW Operating System 8 will also be capable of providing customers with an even broader range of functions on demand that can be subsequently ordered and installed over the air. Moreover, customer offers will be structured more flexibly, enabling functions to be purchased outright or rented for three years, 12 months or just one month.
Breadth over niche: fully electric models to cover around 90 percent of current market segments by 2023
The combination of smart vehicle architectures and a highly flexible production network will enable the BMW Group to have around a dozen fully electric models on roads worldwide by 2023. This year, the three models already on the market – the BMW i3, the MINI SE and the BMW iX3 – will be joined by two key innovative models, namely the BMW iX and the BMW i4, the latter three months earlier than originally planned. “The launch of the BMW iX and the BMW i4 will signalise the start of our technology offensive in 2021: these two all-electric vehicles will set the benchmark for BEVs going forward,” said Zipse.
Fully electric versions of the highly popular BMW 5 Series and the BMW X1 will follow in the years to come, together with other models such as the BMW 7 Series and the successor to the MINI Countryman. Based on this strategy, the BMW Group will have at least one fully electric model on the road in around 90 percent of its current market segments by 2023. “We are consciously adopting a broad approach with our all-electric offering rather than staying niche,” Zipse stated.
The strategy will enable the BMW Group to maintain an optimal balance of attractive products and efficient capacity utilisation at its plants, even if demand in certain markets shifts completely towards fully electric vehicles in the coming years. This will give the BMW Group a strong competitive edge in the years ahead.
By the time the second phase of the current transformation reaches its peak in 2025, deliveries of fully electric models will have grown by an average of well over 50 percent annually and therefore more than tenfold compared to 2020. By the end of 2025, the BMW Group will have delivered around two million fully electric vehicles to customers worldwide.
Neue Klasse poised to set standards in digitisation, electrification and sustainability
The third phase of transformation will take effect from 2025 onwards, at which stage the BMW Group’s product range – which has grown successfully over decades – will be realigned on the basis of the Neue Klasse. The Neue Klasse will be characterised by three key aspects: a completely redefined IT and software architecture, a new generation of high-performance electric drivetrains and batteries and a radically new approach to sustainability across the entire vehicle life cycle. These strands are interwoven within an overall vehicle architecture that has been uncompromisingly optimised for electric drivetrains, setting a new benchmark in terms of digitisation and electrification, while at the same time ensuring that the characteristic flair of a typical BMW is transferred to future vehicle generations.
The Neue Klasse models will thus provide a completely novel user experience never before seen in series production vehicles. So-called “regionalisable technology stacks” will be capable of optimally customising a vehicle’s operating system to suit the varying requirements in each of the world’s major regions and their digital ecosystems, providing continuous upgrades to ensure that the operating system is always fresh. At the same time, the digital first approach systematically integrated in the Neue Klasse will enable an increasing proportion of revenues to be generated over the vehicle’s life cycle via individually configurable and bookable features going forward.
The aerodynamic design of the Neue Klasse will be uncompromisingly aimed at electric vehicles with proportions that differ from the past, including a more spacious interior. These innovative features are to be combined with a new generation of electric drivetrain based on a completely newly developed, highly integrated high-voltage battery concept with an optimised cell design. In the Neue Klasse, this unique combination will mean significant leaps in terms of low electricity consumption, with the ultimate aim of matching the range and manufacturing cost of state-of-the-art combustion engines.
The new generation of powertrains will be based on highly scalable modules capable of covering all market segments and Neue Klasse variants from high-volume series through to exclusive high-performance M models. An electric drivetrain based on the hydrogen fuel cell is also a distinct option going forward. The typical BMW driving experience will be additionally enhanced by focusing on the design features of fully electric vehicles, including options for state-of-the-art driver assistance systems and highly automated driving.
2030: Fully electric models to account for at least 50 percent of global deliveries – all model series to include a fully electric option
The third phase will see a gradual decline in the absolute number of combustion engine vehicles delivered to customers. By contrast, the number of fully electric vehicles the BMW Group delivers is expected to continue growing by an average of over 20 percent annually between 2025 and 2030. Based on its current market expectations, fully electric vehicles are expected to account for at least 50 percent of the BMW Group’s deliveries to customers by 2030. The actual figure is likely to vary significantly from one market to the next and will depend largely on the progress made in the regional expansion of charging infrastructure.
By that stage, across the entire product portfolio, all market segments in which the BMW Group operates will include at least one fully electric model. In fact, a number of segments may well be served exclusively by fully electric models. Accordingly, the BMW Group will also be capable of providing a significantly higher market share of fully electric vehicles, assuming demand develops accordingly. The BMW Group expects to have around ten million fully electric vehicles on roads worldwide over the next ten years or so.
Sustainability integrated throughout all divisions of the company
The BMW Group is firmly convinced that the fight against climate change and the prudent use of resources will be the two main factors that determine the future of our society – and thus also that of the BMW Group. As a premium manufacturer, the BMW Group aspires to lead the way in terms of sustainability. In 2020, it fully embraced this strategic approach across all areas of the business – from administration through to purchasing, development, production and sales.
The BMW Group has set itself clear decarbonisation targets between now and the year 2030 – for the first time across the entire life cycle of its products – including the supply chain, the production process and right up to the end-of-life phase. In every aspect of the Group’s activities, carbon emissions per vehicle are to be significantly reduced by at least one third compared to 2019.
Across its own plants and locations, the BMW Group is already setting the benchmark in terms of resource efficiency. The decarbonisation targets it has set itself for 2030 are the most progressive of the entire automotive sector and even more ambitious than those associated with achieving the 1.5 degree Celsius target. The BMW Group aims to reduce these emissions by 80 percent by 2030. The electricity used to produce the BMW iX* in Dingolfing and the BMW i4 in Munich, for example, is generated via hydroelectric plants situated directly in Bavaria. Apart from significantly cutting its carbon emissions in absolute terms, from this year onwards the BMW Group intends to completely neutralise its remaining carbon emissions (Scope 1 + 2) by using corresponding certificates.
By 2030, the Group aims to reduce the carbon emissions generated by its vehicles in the use phase by 40 percent per kilometre driven. The crucial lever for achieving this feat is the Group’s far-reaching product strategy that includes the massive expansion of e-mobility. Due to the growing proportion of electrified vehicles the Group produces, far greater attention will also have to be paid to upstream value creation in the future when it comes to carbon emissions – particularly in view of the considerable amount of energy required to produce high-voltage battery systems. Without countermeasures, the higher percentage of electrified vehicles would cause carbon emissions per vehicle within the BMW Group’s supply chain to increase by more than one third by 2030.
The goal, however, is not just to avoid an increase, but rather to reduce carbon emissions per vehicle by 20 percent compared to 2019. The BMW Group is adopting a whole range of measures to accomplish this aim, one of which will be to include the carbon footprint of a supplier’s supply chain as a criterion for awarding contracts. The BMW Group is thus assuming a pioneering role as the first automotive manufacturer to set specific decarbonisation targets for its supply chain.
Looking at the BMW iX, the first measures are already having a beneficial effect: the use of renewable green electricity to produce the battery cells, combined with the increased use of secondary materials, reduces carbon emissions in the BMW iX* supply chain by 17 percent compared to the same vehicle produced without these initiatives. “The best automobiles in the world are sustainable and that’s why premium and sustainability will become more inseparable than ever going forward,” said Zipse.
At the same time, the BMW Group is also cutting back on its use of critical raw materials. It has reduced the amount of cobalt in the cathode material for the current fifth-generation battery cells to less than ten percent and increased the amount of secondary nickel it uses by up to 50 percent. The e-Drive no longer requires the use of rare earths.