BMW Profits Plunge Due to Electric Car Investments

Electric MINI

They called it a few months ago. The brand made it clear a few months ago that it would see BMW & MINI profits fall due to a specific set of circumstances. Due to WLPT and enormous investment in transitioning to electric power trains, BMW & MINI’s net profits plunged 24%.

BMW said R&D expenses in the first nine months of the year totalled €3.8bn, up 11.4 per cent, or around €400m, from a year ago. For the year it will spend up to 7 per cent of revenues on R&D, versus 6.2 per cent in 2017.

“Our forward-looking approach has absolute priority. Particularly in these volatile times, we are maintaining our focus on the future and taking the decisions that will lead to tomorrow’s success,” said Harald Krüger, Chairman of the Board of Management of BMW AG, in Munich on Wednesday. “We stand for trust and continuity. The BMW Group has more than 100 years of experience in dealing with transformation and volatility in a rapidly changing world. This is why we see challenging conditions as an opportunity to move forward and strengthen our position as market leader. We are implementing our strategy rigorously and investing extensively in the technologies of the future, despite today’s volatile environment,” Krüger emphasized.

While BMW was ahead of many automakers in adhering to WLPT standards, the process still hurt both MINI and BMW as rival carmakers bolstered sales late in the summer.

BMW Profits

Looking Ahead to Electric

With the launch of the BMW i3, the BMW Group established itself early as a pioneer in the field of electric mobility. Electrification is one of the key pillars of the Group’s Strategy NUMBER ONE > NEXT. By 2021, the BMW Group will have five all-electric models: the BMW i3, the MINI Electric, the BMW iX3, the BMW i4 and the BMW iNEXT. By 2025, that number is set to grow to at least twelve models. Including plug-in hybrids – whose electrically powered range will increase significantly in the coming year – the BMW Group’s electrified product portfolio will then comprise at least 25 models.

This wide range is possible thanks to highly flexible vehicle architectures and an equally flexible global production system. Going forward, the BMW Group will be capable of manufacturing models with all-electric (BEV), hybrid-electric (PHEV) and conventional (ICE) drivetrains on a single production line. Its ability to integrate e-mobility in the production network enables the BMW Group to respond even more flexibly to the increasing demand for electrified vehicles. The goal for the current year is to deliver 140,000 electrified vehicles to customers. By the end of 2019, the BMW Group expects to have more than half a million electrified vehicles on the roads.

The BMW Group is currently developing the fifth generation of its electric drivetrain, in which the interplay of electric motor, transmission, power electronics and battery will be additionally optimised. Integrating the electric motor, transmission and power electronics also cuts costs. Another advantage is that the electric motor does not require rare earths, enabling the BMW Group to reduce its dependence on their availability. The fifth generation of the electric drivetrain will be installed for the first time in the BMW iX3 in 2020.