- BMW has been conservative with its transition to EVs, betting on flexible platforms that can also underpin internal combustion models.
- This has put it in an ideal place in terms of overall market share.
- BMW plans to continue to spread around its R&D funding into combustion and hybrid powertrains, helping it ride out a "rollercoaster" transition, one executive says.
BMW, like most automakers, is taking a long, hard look at the current EV market. After some careful consideration of the state of the industry, it's made a decision that's straight out of Toyota's playbook: it's not putting all of its eggs in one proverbial powertrain basket. But unlike rivals like Mercedes and Audi, its previous bet on flexible platforms means it won't be quite as hard to keep its combustion products coming.
The company took some flack for this approach a few years ago, when it committed to building many of its EVs on the same platforms as its internal-combustion products. The i4, i5 and i7 all ride on the same architectures as their gas-burning siblings. That makes it much easier for BMW to adjust its mix of EVs to ICE products, giving it flexibility that rivals don't have. Mercedes has now copied that approach, announcing that the forthcoming CLA EV will also be available as a hybrid.
Mercedes, like many other brands, charged headfirst into EVs. Whether it was FOMO or simply the industry shifting rapidly, manufacturers sunk tens of billions of dollars into a market that ended up "not developing" as quickly as planned. This has especially hurt many European companies, many of which bet it all on rapid EV sales growth that hasn't quite materialized. Fortunately for BMW, the German company has long been hedging its bets. And, according to The Financial Times, that now means continuing to invest in both combustion and hybrid powertrains—especially with the new U.S. presidential administration shaking things up so significantly.
“I think it would be naive to believe that the move towards electrification is a one-way road. It will be a rollercoaster ride,” said BMW board member, Jochen Goller, in an interview with the Financial Times. “This is why we are investing in our combustion engines. We are investing in modern plug-in hybrids. And we will continue rolling out electric cars.”
It seems not too long ago that automakers were being slammed for not investing quickly enough in EVs or failing to commit to a wholly-encompassing EV strategy to electrify their entire lineup for many markets. This pressured many German rivals (like Volkswagen, Audi and Mercedes-Benz) into jump-starting their efforts of electrifying their fleets. However, BMW's continued bet on versatility is now paying off while others are struggling to adjust to a slowing global transition to EVs—and it doesn't have to blow up billions of dollars in investment to shift strategies.
Sound familiar? It should, because this is a play straight out of Toyota's "multi-pathway" playbook to maintain a mix of all powertrains across its fleet. Predictably, this early commitment has put BMW in a very, very good spot. Stock analysts like Patrick Hummel from UBS say that the consistency has positioned the brand "pretty much where they need to be" in the share of the global EV market.
In 2024, BMW sold 426,594 EVs across the big blue marble, a new record. EVs represented around 17% of BMW's total sales—add-on hybrids and electrified vehicle sales made up around a quarter of the brand's total for the year. Not only is this a decent mix for the luxury brand, but it's also enough for BMW to meet EU emission targets without needing to throw piles of cash on the hoods of their cars to encourage sales.
Looking locally to the U.S. presents a bit more uncertainty. With the incoming presidential administration shaking the EV tree through the potential elimination of the EV tax credit and an upcoming increase in tariffs, BMW's electrified future has become more speculative than ever. Thankfully, 65% of its U.S.-market cars (including the majority of its high-margin SUVs) are built domestically which makes the brand less vulnerable to these risks.
China, however, is much tougher market for the company. BMW is facing the same problem that other automakers in the market are running into: China's customers want the new affordable, high-tech options coming from domestic brands. From affordable vehicles to luxury marques, Chinese-built vehicles are simply becoming more competitive to global brands like BMW and others. This has led to a sharp decline in sales for imported brand in the country, regardless of powertrain. However, with the market share of EVs growing outside of China, BMW might just be alright.
Even though BMW is continuing to invest in combustion-powered cars and hybrids, it isn't giving up on EVs, either. In fact, BMW plans to launch its Neue Klasse platform this year, which promises competitive EVs with longer range, faster charging and a heavy focus on software. Analysts are calling it a smart play that could help position the brand as a leader not just in multi-energy powertrains, but also in the emerging market of software-defined vehicles.
So while other automakers are taking a step back and reevaluating an EV-only or EV-heavy approach, BMW looks like it's exactly where it needs to be—riding the ups and downs of the market with some contingency plans at the ready.
“We anticipated that people wouldn’t want to be discriminated against because of the power train,” said Goller. “We’ve gone the path which others are now following.”
