For BMW number 2 Nicolas Peter, decarbonizing the auto industry in Europe cannot go through a single technological solution, as the 100% electric shift provides, at the risk of weakening the industry.
Electric, yes, but not exclusively. Like Porsche or Volkswagen, the Bavarian manufacturer BMW supports the transition to electric, decided in particular in Europe, but also the continuation of the use of thermal engines in certain circumstances.
“Our position is very clear: it is the decarbonization of the automotive industry. But decarbonization does not mean that there is a single solution to achieve this objective”, summarized on BFM Business this Friday Nicolas Peter, member of the BMW Group Finance Board.
Electric but also thermal
The German manufacturer is one of the pioneers of the electric car, since 2011 and the launch of its dedicated brand, BMW i. If in 2024, he plans to sell one in five cars in 100% electric mode, the combustion engine is also part of his technological roadmap.
“The world markets are developing at very different speeds in the different engine systems, continues Nicolas Peter. Around the world, markets are demanding heat engines and the BMW group will be ready to (there) deliver cars”.
“Thermal engines in which we will still invest to reduce their emissions”, specifies the number 2 of the group. This Wednesday during the conference on the annual results (see box below), Oliver Zipse the chairman of the management board had defended synthetic fuels, like his colleague from Volkswagen a few days earlier.
Electric, hydrogen, BMW will invest in “2022, 2023 (…) around 7 billion euros in R&D, huge sums”, continues the leader. The group is also investing in its industrial apparatus: 1.7 billion euros in the United States, to be able to manufacture electric cars in its factory in Spartanburg (South Carolina).
A consequence of the American IRA? “At the same time, we are investing in Hungary, in the east of the country, where we will produce from 2025 a new generation of electric car called ‘Neue Klasse’, replies Nicolas Peter. We have just announced that in the middle of our three factories in Bavaria, we are going to invest in a factory for the production of battery modules. We are doing both: we are investing in Europe, but also in the United States”.
“A one-size-fits-all approach will weaken the industry”
Betting only on the electric car presents several risks for Nicolas Peter. “We need an approach for Europe that is reasonable, which means accepting the objective of decarbonizing industry. reach the target but will weaken Europe’s key industry,” warns BMW’s number 2.
Like Carlos Tavares who denounced in October on BFM Business the red carpet rolled out to Chinese brands by Europe, some car manufacturers have been alerting European authorities for several months to a transition that may be too massive, perhaps too fast . Especially in a context where the United States also wants to protect its industry with the IRA.
An awareness that the European authorities have not yet had according to Nicolas Peter: “it could definitely be better”.
BMW’s number 2 points to another concern regarding the 2035 date for the ban on the sale of combustion engine vehicles. “We are ready for 2035, reaffirms the number 2 of BMW. Does 2035 make a lot of sense from our point of view? No, because when you look at the infrastructure, in some countries, it is going more or less correctly But in large countries we are far from the coverage that is being developed to provide the charging network that our customers need to use 100% electric vehicles”.
No date has yet been announced by Europe to put the 2035 project back to the vote.
A target of 8 to 10% operating margin in 2023
BMW unveiled very good annual results this week: 142.6 billion euros in turnover (+ 28% over one year) and a record net profit of 18.6 billion euros, up sharply from 49 % over one year. BMW is aiming for an operating margin of between 8 and 10% this year. These forecasts of electric car sales – one in three in 2026 – have been well received by investors.
