BMW: ICE has peaked, EVs to power future growth

German auto giant BMW is charting a strategic course through its future, embracing electric vehicles (EVs) while acknowledging the plateauing of traditional internal combustion engine (ICE) sales. 

This mixed powertrain approach represents a pragmatic stance in the face of tightening global emission regulations and surging EV demand.

ICE sales reach peak, EVs surge ahead

“The tipping point for combustion engines was last year,” declared BMW’s Chief Financial Officer, Walter Mertl, effectively drawing a line under the era of unbridled ICE growth. 

He predicts a stable sales plateau for petrol and diesel vehicles, followed by a gradual decline as stricter emission laws loom on the horizon. 

China, California, and Europe’s 2030s combustion bans also cast a long shadow over future ICE prospects.

Meanwhile, BMW’s electrified fleet is experiencing a record-breaking surge. Sales of electric BMWs, Minis, and Rolls-Royces rocketed 74.4 per cent in 2023, propelling EVs to a 15 per cent share of the company’s 2.56 million-unit total output. 

This momentum is set to continue, with BMW aiming to ramp up EV share to 33 per cent by 2026 and a staggering 50 per cent by the end of the decade.

Neue Klasse: electrifying BMW’s future

The Neue Klasse platform lies at the heart of BMW’s EV ambitions. 

Debuting in an electric SUV successor to the iX3, this scalable architecture will underpin five additional models, including a next-generation 3 Series. 

Sharing styling cues with recent concept cars like the 2027 M3, Neue Klasse promises a cohesive and futuristic EV lineup.

But beyond aesthetics, Neue Klasse boasts significant technological advancements. Mertl anticipates battery costs to be halved and range-per-kWh to increase by 25 per cent, paving the way for improved profitability.

By the end of the decade, BMW expects its EV margins to match those of its combustion-powered cars, marking a pivotal shift in the company’s financial landscape.

A pragmatic path forward

BMW’s mixed powertrain strategy acknowledges the reality of the automotive market. While ICE sales have reached their zenith, EVs are experiencing explosive growth. 

By investing heavily in Neue Klasse technology and committing to an ambitious EV roadmap, BMW is positioning itself for a prosperous future in the electrified era. 

This sensible approach, balancing the decline of ICE with the surge of EVs, could well serve as a blueprint for other automakers navigating the same choppy waters.