After a successful 2021, the BMW Group is speeding up technological change and pushing forward with the transformation towards sustainable mobility. The company is preparing for a comprehensive leap in technology in its Neue Klasse and significantly upping the pace once again as it continues to ramp up e-mobility. At the same time, the BMW Group is involving its stakeholders, from employees to the capital market to society, in its successful, consistently implemented transformation strategy.
“We see 2021 as clear evidence that successful transformation pays off. The strong result we achieved in financial year 2021 is the outcome of our consistent strategy – with an open-technology approach and the right products at the right time,” said Oliver Zipse, Chairman of the Board of Management of BMW AG, on Wednesday in Munich. “We have laid the foundations to build on this success in the coming years: With the Neue Klasse, we are leading sustainable mobility into a new technological dimension. By extending the contract with our BBA joint venture until 2040, the BMW Group is also taking its growth to the next level.”
The BMW Group is monitoring the current development of the situation in eastern Europe with great concern and dismay. As a global company, the BMW Group stands for the peaceful coexistence of different cultures all over the world – at all times and in all locations. The thoughts of our BMW Group employees are with all those who are experiencing suffering and loss in this war.
“In the current situation, three things are paramount for the BMW Group: helping the victims and those affected wherever we can, securing our day-to-day operations worldwide and continuing to systematically implement our long-term strategy,” said Zipse. “The major challenges we are already facing, such as the fight against climate change and the transformation towards sustainable mobility, must still be confronted with the same intensity. It is especially important in times of crisis not to stop doing the right things.”
CO2 fleet emissions once again significantly reduced
The environment is another key stakeholder for the BMW Group and also benefits from the course taken by the company: Based on preliminary calculations, the BMW Group reported an EU fleet emissions figure of 115.9 grams of CO2 per kilometre and therefore once again significantly overfulfilled its CO2 fleet target of 126 g/km. 2021 was also the first year in which the BMW Group’s entire production and all its sites worldwide achieved a net zero carbon footprint.
In 2021, the company became the first German automotive manufacturer to join the Business Ambition for 1.5° C campaign launched by the Science-Based Targets Initiative and therefore committed to the goal of complete climate neutrality throughout the entire value chain by 2050 at the latest. To take account of all aspects of holistic sustainability, the BMW Group aims to significantly increase the percentage of secondary material used in its vehicles. The “Secondary First” approach seeks to gradually expand the percentage of recycled and reused materials used from the current average of almost 30 percent to 50 percent in the Neue Klasse. The BMW i Vision Circular already provided a glimpse of what individual, sustainable, luxurious mobility in the urban environment could look like in 2040: built from 100-percent secondary material and renewable raw materials – and 100-percent recyclable.
All BMW AG shareholders also have the opportunity to participate in the company’s success during the transformation: The Board of Management and Supervisory Board will propose a dividend of 5.80 euros per share of common stock (preferred stock: 5.82 euros) for the financial year 2021 to the Annual General Meeting. This represents a payout ratio of 30.7%.
“The higher dividend allows our shareholders to benefit from the company’s strong performance last year. Appropriate participation in the company’s success is important to us. We will continue to apply sound judgement, remaining equally focused on the successful, sustainable development of the company and our shareholders’ expectations. Even in times of high volatility, amid the challenges of a far-reaching transformation, we are still optimising our company’s profitability and enabling our shareholders to benefit from it to an appropriate extent,” said Peter.
Majority stake in joint venture BBA will boost electric offering in China
Another important element in the future orientation of the company is the extension of the contract with the BMW Brilliance Automotive (BBA) joint venture in China, combined with acquisition of a majority stake. Since February, the BMW Group has held 75 percent of the shares in the company, which has since been fully consolidated in the Group Financial Statements of BMW AG.
“A successful global company must be able to thoroughly understand and fulfil customers’ needs and wishes in all three main regions of the world. With our new footprint in China, we will be able to meet this requirement to the same extent in all regions,” said Zipse. One of the ways in which the BMW Group will achieve this is by expanding its range of fully-electric vehicles in the world’s largest market for e-mobility and launching production this year of a fully-electric variant of the BMW 3 Series Long-Wheelbase Version that has been specially customised for China. The company has already announced that the BMW X5 range will also be expanded to include a variant produced locally in China.
Innovation drives demand: BMW Group steps up technological change and e-mobility ramp-up significantly
Validated by the success of its fully-electric models so far, the BMW Group is also raising its targets for the e-mobility ramp-up: This year, including pre-production vehicles, the company will already have 15 fully-electric models in production – covering around 90 percent of its current segments. In addition to existing models like the BMW i4, BMW iX and MINI SE, this also includes four high-volume BMW model series: the BMW 3 Series and BMW 5 Series, the BMW X1 and the BMW X3. The new BMW 7 Series also has a special role to play in 2022, with the launch of the new BMW i7.
“The BMW iX and BMW i4 are probably the best electric cars on the market currently – the test reviews and strong demand from our customers speak for themselves. This year, the BMW i7 will take things to the next level,” said Zipse.
With the introduction of the BMW iX and BMW i4, the BMW Group has significantly expanded its digitalisation of the customer interface. For instance, as well as offering intuitive configuration to simplify the purchasing process, pre-configured new vehicles and newer used cars across the entire model range can already be bought online in the BMW Group’s domestic market of Germany. By 2025, the company plans to sell around a quarter of its vehicles entirely online.
Furthermore, data-based recognition of service requirements enables proactive customer care. This means the customer can be contacted directly and receive assistance remotely, wherever possible, or a visit to the workshop can be set up easily and efficiently, if needed.
Two million BEVs on roads by end of 2025
With a fast-growing range of products and strong demand for the new electric models already available, like the BMW iX and BMW i4, the BMW Group expects sales of its fully-electric vehicles to increase rapidly: By the end of 2025, the company aims to have more than two million fully-electric vehicles on the roads.
With the addition of the BMW i7, the BMW 7 Series will become the first fully-electric luxury sedan in our line-up available with either an internal combustion engine or a plug-in hybrid drive train. At the same time, the new BMW 7 Series also comes with next-level internal combustion and plug-in hybrid drive technology. This new generation of diesel and petrol engines offers higher efficiency. Its development already ensured that engine technology is taking a further step towards reducing emissions and improving air quality. At the same time, it is also technically enabled for future regulatory requirements.
Neue Klasse brings leap in technology: new battery generation and future of connectivity
The BMW Group will be realigning its product range from the middle of the decade with the introduction of the Neue Klasse. Based on a vehicle architecture (BEV-only) that is uncompromisingly geared towards electric drive trains, the Neue Klasse is characterised by three key aspects: an entirely redefined IT and software architecture, a newly-developed high-performance electric drive train and battery generation, and a new level of sustainability throughout the entire lifecycle.
This new dimension of product substance is designed to set the standard for digitalisation and electrification, while bringing the characteristics of a typical BMW into the future – thereby giving rapidly growing demand for fully-electric BMW Group vehicles a further boost.
To achieve this, the company is making a major technological leap: For example, the Neue Klasse will use an all-new electric drive train with lower fuel consumption and higher range. The BMW Group is currently developing a new generation of battery cells for this that, combined with optimised cell chemistry, should also significantly lower costs for the e-drive.
The company plans to announce details of this new battery technology – which is already the sixth generation independently developed by the BMW Group – before the end of 2022. Within the next 12 months, the BMW Group will also provide a first glimpse of the potential of the Neue Klasse for the next generation of connectivity and user interaction.
The long-term cooperation between the BMW Group and Qualcomm Technologies and Arriver Software agreed on 10 March marks an important milestone for the next platform generation for automated driving. The aim is to create a scalable platform for automated driving where development is based on a common reference architecture, with joint sensor specifications and a shared safety architecture. More than 1,400 specialists at locations around the world will work together within this cooperation.
50 percent BEV share may be possible before 2030
The BMW Group believes the Neue Klasse has the potential to further speed up the market penetration of e-mobility. For example, fully-electric vehicles could make up 50 percent of the company’s global sales earlier than 2030.
By this point, annual sales of fully-electric BMW Group vehicles could already surpass 1.5 million units. However, this will depend on expansion of charging infrastructure worldwide being able to keep up with the increase in models available and growing customer demand for fully-electric vehicles. The company is driving this expansion itself – for example, through the high-power charging network, Ionity. A stable supply of raw materials will also be key.
Under these conditions, the BMW Group aims to have delivered a total of ten million fully-electric vehicles to customers by 2030. By then, the Rolls-Royce brand will have a product range that is exclusively all-electric. MINI is also on the road to a fully-electric future from the early 2030s onwards. Later this year, the brand will provide a glimpse of the all-new MINI family: fully digitalised, to suit the MINI lifestyle – with electrified go-kart feeling, a clear focus on sustainability and a minimal environmental footprint.
The BMW Group does not expect all markets worldwide to have the necessary framework conditions in place for all customers to transition to pure electromobility in the early 2030s. For this reason, options with highly efficient conventional drive technology will still be needed to meet people’s individual mobility requirements, while at the same time contributing to CO2 reduction in the transport sector.
Hydrogen fuel cell as further pillar of drive technology
Hydrogen fuel cell technology is also expected to account for a growing percentage of the drive train mix from the second half of the decade onwards. The BMW Group is systematically pushing forward with development of this technology as an additional option for sustainable individual mobility and has already announced that an electric drive train based on a hydrogen fuel cell is also conceivable for the Neue Klasse.
A small series of the BMW iX5 Hydrogen will be used for demonstration and testing purposes for the first time this year. With its high-performance fuel cell and optimised power battery, the BMW iX5 Hydrogen’s drive system is one-of-a-kind worldwide. Assuming the hydrogen is produced using renewable energy and the necessary infrastructure is available, this technology can complement the BMW Group’s drive train portfolio and, in particular, meet the needs of customers who do not have their own access to electric charging infrastructure, frequently drive long distances and desire a high degree of flexibility.
BMW iFactory: Lean, green, digital – production of the future for Neue Klasse
The Neue Klasse is not only designed to set standards on the roads, but also in production. The BMW Group has viewed itself for decades as the benchmark for production technology and operational excellence in vehicle construction. Building on this foundation, the company now aims to redefine the future of automotive production: BMW iFACTORY represents this strategic vision of BMW production: LEAN. GREEN. DIGITAL.
BMW iFACTORY provides answers to the challenges of transforming the production network towards e-mobility, with a global, integrative approach, and will be implemented at all plants worldwide. This digitalised iFactory approach will be pioneered by the new Plant Debrecen, with groundbreaking planned for 1 June 2022. Exactly 26 months later, the plant will produce the first prototypes for the Neue Klasse. Existing locations such as the main plant in Munich, which will celebrate its centenary this year, will be modernised from the same perspective, as part of the ongoing transformation, and geared up for future tasks.
In the clusters lean, green, digital, the BMW Group will be systematically further developing its global production network in the coming years to fulfil its ambition of creating the most state-of-the-art and efficient production for the Neue Klasse.
The term lean stands for efficiency, precision and a high level of flexibility, as well as the ability to integrate different drive technologies and vehicle architectures into production – which is already a key factor for the lasting success of the transformation.
Green means using state-of-the-art technologies to establish production with minimal use of resources and the vision of a circular economy. By 2030, the BMW Group aims to reduce its CO2 emissions per vehicle from production by 80 percent from 2019 levels.
Digital stands for the use of data science and artificial intelligence in production, as well as merging the real and virtual world in planning and development. The aim is for employees around the world to be able to connect virtually in real time to shape the production of the future.
“We are making good progress with the comprehensive digitalisation of the company and its products, and the gradual electrification of our line-up. We are able to cover the high investments we are making out of our own resources, today and in the future. We have the staying power and the financial strength for this far-reaching transformation,” said Peter.