In every aspect, from design to performance to financial stability, the original Neue Klasse (“New Class”) cars from the 1960s and ’70s significantly shaped the identity of BMW as we know it today. The fact that BMW’s next generation of electric vehicles carries the same name underscores their crucial role in the German automaker’s future. The goal is for these EVs to achieve the same level of profitability as BMW’s conventional internal combustion engine cars, which are not becoming easier or cheaper to produce.
During a recent media roundtable following the launch of the new Vision Neue Klasse X, Frank Weber, BMW’s management board member in charge of development, emphasized the significance of this new platform for BMW. Weber also highlighted the company’s commitment to ensuring these EVs are financially viable.
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BMW is excelling in the EV race
The manufacturer of the Ultimate Driving Machine still offers combustion vehicles and hybrids, but its EVs stand out for their impressive range. In fact, last year, EVs accounted for 15% of BMW’s global sales, a higher proportion than most competitors. The upcoming “New Class” EVs aim to surpass these achievements.
“Once this reaches high volume—though challenging to achieve from day one—when operating at full capacity as designed, we expect to see margin parity and profitability levels matching those of combustion engines,” explained Weber.
BMW’s Neue Klasse platform and advanced technology are specifically engineered to reach these goals, with expectations set for the next four years as production ramps up towards full capacity by 2027.
Attaining cost parity and profitability comparable to gas engines is a top priority for the auto industry as it navigates the shift towards predominantly electric vehicles. Currently, automakers are estimated to be losing around $6,000 on each $50,000 electric vehicle sold, presenting a significant challenge that luxury automakers like BMW are navigating on a better footing due to their higher-priced offerings. Even luxury startups face hurdles in achieving the required scale for long-term viability.
Continuing, Weber noted that BMW’s EV profitability objectives consider anticipated cost increases in producing combustion engines to meet stringent environmental regulations in regions like the U.S., Europe, and China. This regulatory landscape necessitates additional expenses for cleaner gas and diesel engines—a challenge BMW is poised to address over time.