BMW plans to increase sales of electric and plug-in hybrids by 30% every year until 2025 to help meet incoming stringent emission regulations in the EU, prompting the carmaker to accelerate the rollout of battery models.
The German manufacturer moved up a goal for a lineup of 25 electric and plug-in hybrid models by two years to 2023, it said, following plans by other carmakers like Volkswagen to keep up with tightening regulation. This puts BMW on a trajectory to sell roughly 700,000 electrified vehicles by 2025. The quicker ramp up on electric cars will put the world’s second-biggest luxury carmaker on a trajectory to meet EU regulation by 2021 on CO2 and avoid fines, chief financial officer Nicolas Peter said.
“We will achieve them from my perspective, no doubt,’’ Mr Peter said.
Carmakers in Europe are exposed to potentially billions in fines on tough regulations for carbon dioxide fleet emissions that’ll be phased from next year. Rather than falling, automakers’ CO2 emissions have been going up for the past two years due to demand for larger sport utility vehicles and consumers buying fewer diesel cars.
Diesels emit about a fifth less CO2 than equivalent petrol vehicles. From 2020, much of the EU car fleet will be capped at 95 grams of CO2 per vehicle per kilometre driven. Currently, BMW sits at 128 grams, chief executive Harald Krueger said.
The regulation is adding to a bevy of headwinds for the industry as it transitions into electric cars, while also battling trade tensions and a slowing global economy. To tackle the challenges, BMW has put in place a €12bn cost-cutting programme.
BMW currently offers one battery-powered vehicle, the i3 city car, which it started selling in 2013. It’s adding an electric Mini later this year. The company sold 142,000 electric and plug-in vehicles last year, a rise of 38% to make up about 6% of total deliveries. Demand this year has slowed, rising about 2% through May.
Other carmakers have also increased targets for electric vehicles in recent months. Daimler in May said more than half of its Mercedes-Benz brand cars would be plug-in hybrid or electric variants by 2030, while VW plans to sell more than one million purely electric cars by 2025. BMW also announced it would only buy electricity from renewable energy sources from 2020 onward for all its locations. Separately, the carmaker said it has set aside between €100m and €500m in order to deal with Brexit.