BMW has passed the tipping point for combustion engine vehicle sales and now generates most sales growth from electric cars, its chief financial officer has said.
“The tipping point for the combustion engine is already there,” CFO Walter Mertl said, according to Reuters, adding that in his view it had been passed last year.
“The current sales plateau for combustion cars will continue and then fall slightly,” he predicted, pointing to looming environmental regulation that will restrict sales of such vehicles.
Carmakers are under pressure to ramp up their EV offerings as regulatory deadlines from China to the European Union and some U.S. states will begin to ban sales of new fossil fuel emitting cars from the middle of the next decade, Reuters noted.
BMW achieved a 15% all electric sales share last year. It plans to raise that to 33% by 2026 as it rolls out six new models in its Neue Klasse EV only line, a multibillion-euro effort to jump the technology gap with competitors.
Still, BMW’s margins for combustion engine and all-electric cars won’t reach parity before at least 2026, Mertl reportedly said, pointing to the higher costs of introducing new battery technology for later models.
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Discounting is also likely for cars in certain price ranges, Mertl said, without going into further detail.
The carmaker is sticking to its previously announced target of 3m vehicles sold by 2030 with an 8-10% margin in its automotive segment, he added, a conservative goal sitting below its expected 2023 margin of around 10.3%.
Reuters noted BMW CEO Oliver Zipse had said last September the company would be “at least as profitable” when selling the Neue Klasse EVs in volume, bolstered by their lower battery costs and higher efficiency per kilowatt hour.