BMW’s Future-Proof EV Strategy Includes Combustion, Hybrid and Electric Models

[Jason]

Automotive News summarizes BMW's future-proof EV strategy going forward. In sum, they are wisely not putting all their eggs in one basket, so to speak. BMW will accomplish this by offering combustion, hybrid and electric versions of its core models — with all three varieties capable of coming from the same assembly line.

BMW's 'future-proof' EV strategy

August 7, 2017

BMW is hedging its bets on the future by planning combustion, hybrid and electric versions of its core nameplates — with all three varieties capable of coming from the same assembly line.

The idea, BMW executives say, is to flex production among powertrain types according to the whims of the market. Today’s uncertain forecasts for electric vehicles are the motivator.

“Nobody knows how many electric vehicles you’ll sell in 2020, 2021 and 2025,” BMW CEO Harald Krueger said. “You don’t know how many plug-in hybrids you will sell, and you don’t know how many combustion engines you will sell. The only answer is flexibility [to] deliver all three.”

The approach can help the automaker avoid having to idle some factories while other plants can’t keep up when demand diverges from forecasts. The strategy also calls for BMW to develop “future-proof” platforms that can handle electric powertrains as well as combustion engines.

The X3 crossover and 3-series sedan are among the first vehicles likely to offer all available powertrain types. BMW has confirmed it will introduce an electric X3 in 2020, and an electric 3 series is expected in 2019 or 2020, after the compact sedan is redesigned. Both the X3 and 3 series will move to BMW's CLAR cluster architecture, a highly flexible vehicle platform that allows for any of the planned powertrains.

"The strategy for the future is to integrate all drivetrains, whether it's purely battery-electric, whether it's a hybrid or a purely combustion engine," said Oliver Zipse, BMW AG board member in charge of production. "You will see battery-electric right after diesel right after hybrid on the assembly line. That's the only way we think to respond to the necessary flexibility because we don't know the demand."

The approach is a major departure from the philosophy employed today. When BMW launched its i3 electric compact and i8 plug-in hybrid sports car in 2013 and 2014, it created dedicated production systems in its Leipzig, Germany, assembly plant.

"It was a plant inside a plant, so to say," Zipse recalled. "Completely separated. That is not our strategy for the future."

Moving to the new integration concept will require investment in BMW's assembly plants, Zipse said. For instance, body shops need to make changes to fit big, flat battery packs into the floor of the vehicle. The company would set up a side line inside the body shop to assemble the differently shaped floors, and everything would then come together in the main framing station, he said.

Because EV batteries are so heavy — around 900 to 2,000 pounds — having battery assembly on-site or very close to the assembly plant also is important, Zipse said. That will avoid the cost and complexity of having to ship such a heavy component.

BMW's plant in Spartanburg, S.C., is starting down the path toward a more flexible production system. The plant assembles the X5 crossover, with a plug-in hybrid variant already integrated into the production line, Zipse said. "You can do the same thing with a purely battery-electric," he said.

The plant has produced about 25,000 plug-in hybrid X5s since production started in 2015, said Knudt Flor, CEO of BMW Manufacturing Co. in Spartanburg. Battery production already is done on-site for that vehicle.

Going forward, Spartanburg will be configured to assemble EV versions of its vehicles. BMW assembles the X3 through X6 crossovers in Spartanburg and will add the X7 large crossover in late 2018.

Spartanburg will be able to produce the full range of combustion, plug-in hybrid and electric powertrains with coming models, Flor said. The X3 would be a "good option" for the approach if there's demand for that powertrain range, he added.

"Everything depends on what the customer demands, but then we need to be able to integrate very fast," Flor said. "We need to have this production-ready."

Even with the plan for electric versions of its core models, BMW will continue its i electric car subbrand. The next new i nameplate will be the iNEXT, with advanced autonomous driving features, in 2021.

But BMW doesn't want to split all EVs into a separate line, Krueger says.

"What might happen is, you can destroy the brand," Krueger said. "You have your old-fashioned business and a modern business, and in between, you've killed the brand."

[spiceyxi]

I wonder what types of compromises they will have to make to fit all versions in one. I would imagine the difference between building an ICE vehicle and full EV would be fairly different.

Or will they just eat the cost in a slightly less efficient plant? Probably would have been much cheaper to do that than build the i brand I guess...

[///M4ster Yoda]

Good news. I was getting worried there for a little while. Started thinking I would be leaving BMW after owning 10+ vehicles (ours + family) over the years. No ICE no DICE!

[c63er]

This is the only way to run things so good for them for waking up.

The entire mainstream lineup should become electrified alongside combustion engines and possibly hydrogen and give us the choice as customers.

Next step get rid of the bmw I brand and then make the 3 series a drivers car again

[Thescout13]

Originally Posted by ///M4ster Yoda

Good news. I was getting worried there for a little while. Started thinking I would be leaving BMW after owning 10+ vehicles over the years. No ICE no DICE!

No Internal Combustion Engine, no Diesel Internal Combustion Engine? I am so confused!! Haha but I am with you in all seriousness

[///M4ster Yoda]

Originally Posted by Thescout13

No Internal Combustion Engine, no Diesel Internal Combustion Engine? I am so confused!! Haha but I am with you in all seriousness

Haha. You got me.

[Agni]

This is just further proof that BMW and other car companies are run by MBAs and their spreadsheets with product/market fit charts. There is little room for innovation. All the "innovation" is done by 3rd parties like Mobile eye and their tech is sold to BMW's competitors too.

Where as, Tesla is run by software engineers and technologists. Sorry BMW but you have no chance. Model 3 is the iPhone of cars and BMW is starting to look like Nokia and blackberry. Tesla hires some of the best engineers, including, recently the GOD of artificial intelligence: https://techcrunch.com/2017/06/20/te...opilot-vision/

[ORIGIN M.]

Originally Posted by c63er

This is the only way to run things so good for them for waking up.

Next step get rid of the bmw I brand and then make the 3 series a drivers car again

Like you know anything about how to run things as a car manufacturer.

BMW will either lead, follow, or get out of the way!

[ron_jeremy]

Originally Posted by c63er

Next step get rid of the bmw I brand and then make the 3 series a drivers car again

You think doing a all in one model, will make for a good driver car of the 3 series?
It´s no car that´s a jack of all trades, or you can use it to everything.
The EV is a fundamental different car to build than the traditional ICE car.
Using this multiplatform , will make the EV unnecessary conservative, and much less flexible than it could´ve been. And the ICE will not be light and nimble as it should.
This should´t be ANY good news for EV buyers, or the ICE buyers, and eventually for BMW itself.
BMW are out on a swim, in deep water - and they are taking the easy road. This is a move Kia are doing, but they does´t have the legacy or is a premium brand BMW is.

[RPiM5]

Originally Posted by Agni

This is just further proof that BMW and other car companies are run by MBAs and their spreadsheets with product/market fit charts. There is little room for innovation. All the "innovation" is done by 3rd parties like Mobile eye and their tech is sold to BMW's competitors too.

Where as, Tesla is run by software engineers and technologists. Sorry BMW but you have no chance. Model 3 is the iPhone of cars and BMW is starting to look like Nokia and blackberry. Tesla hires some of the best engineers, including, recently the GOD of artificial intelligence: https://techcrunch.com/2017/06/20/te...opilot-vision/

While I do agree with what you are saying about "innovation" I do think that BMW or most other car companies compared to Tesla are misunderstood. You can't quite compare a car to something that is purely a piece of technology. The mobile phone is a piece of technology that can change what it is fundamentally and still be successful and viable in the future. One day we may not even need to aurally talk to each other through a technological device, instead we will have some other means of communicating. But for the automobile, it's different. An automobile will always need to be thing for personal transport on terra firma. That is until the day comes when we have flying cars.

BMW is a car company. Tesla is a car company too and not a technology company. Google is a technology company. So is Apple. Even though cars have become more technologically advanced, it can never be a pure piece of technology as long as it has four wheels.

With that said, I think BMW is executing the right strategy here with all their people who have MBA's. A BMW should always be a BMW, meaning that a 3-Series should always be a drivers car that can out-handle and provide the best driving experience against any of its competitors no matter if it is ICE, Hybrid, or pure EV. Tesla's on the other hand are indeed almost marvels of technological innovation, but if you've ever driven one, the steering feels dead, the handling isn't great, the ride comfort and interior comfort are ok, and the luxury, ergonomic, and aesthetic aspects are still far behind the German Big Three. Tesla is more like driving an iPhone than it is driving a car, it's true and that's OK, because that's what makes Tesla a Tesla. A BMW, Audi, or Mercedes on the other hand, is like driving a luxury car first and driving a piece of technology second.

BMW doesn't need to become Tesla, it needs to be a BMW. I really wish they never got rid of their old slogan "The Ultimate Driving Machine" because a BMW should always be exactly that, with the emphasis on the "Driving" experience, and not just being able to go from point A to B where the "Driving" experience doesn't matter.

BMW is playing it safe, and that is good. They are right, that no one can predict yet how things will play out. We have entire countries that already want to do away with purely combustion engine vehicles in years to come, but that will be difficult and although companies like Tesla are paving the way, there will be difficulties in making everything electric in the future. Such as where all of the material comes from to make the batteries, such as Cobalt from the Democratic Republic of Congo, and other rare materials such as zinc, magnesium, cadmium, manganese, and cobalt oxide.

https://www.theguardian.com/environm...-cobalt-mining

I think that BMW's strategy is the ideal solution to an uncertain future. Streamline production that so that all three types of power-trains can be produced and curtail any production inefficiencies as soon as possible in order to maximize production and save money in the long term. BMW's strategy to also keep the i Division going as their true "Innovation" branch is a great thing too. This is the part of BMW that will compete directly with Tesla. They don't need to have the entire line up products try to be Tesla-fighters, instead give the consumer a choice where they can buy a Tesla or they can buy a Tesla-like BMW that will definitely offer more luxury, more design aesthetics, and more comfort/ergonomics than a Tesla.

The only question that now remains is the future of ///M Division. Will they stay pure ICE, or will they go Hybrid like Mercedes plans to do, or will they go pure Electric? Time will tell, my bet is that 8 years from now, we will see our first Hybrid BMW M5, and then another 8 years after that we may see pure Electric ///M Cars, but I hope they never go pure Electric.

I am just looking forward to the next generation G20 3-Series myself. The only BMW I look forward to buying in the future is a 6spd Manual M340i, if they will make one and bring it to the United States. Especially now that they've discontinued the 6-Series, the G20 M340i is the only car on my radar, I do think that the new 8-Series will be too ugly for me and also too much money. Plus they'll probably not put V12 engine in the new 8-Series and that is a real bummer to me.

[stvding]

I don't care about ICE car dying. As long as EV is quick enough, i will be fine

[JorgenM]

Originally Posted by RPiM5

The only question that now remains is the future of ///M Division. Will they stay pure ICE, or will they go Hybrid like Mercedes plans to do, or will they go pure Electric?

The answer is very obvious: of course they will go pure electric. I've never cared about M cars, but in the future I might do

[evanevery]

"Flying Cars"

Flying cars are neither a good car nor a good airplane. They compromise and fail on both fronts.

Similarly, It would be a major compromise to design a common platform for both electric and ICE drivetrains. The vehicle infrastructure is just way too different. A more humble brand might get away with it but BMW will lose their edge if they try this...

If they want to develop a really good EV, then they need to design it from the ground up.

The i3 is "meh" currently, but could serve this purpose moving forward (with much better range). The i8 is a curiosity and not going to be the answer for the mass market (even though I have a reservation on an i8 Spyder allocation).

Tesla is making pure electrics and they can't keep up with the orders. (They have over half a million reservations for the new Model 3). I fail to see how that market is going to diminish. BMW should make a pure electric and make it good. No compromises. The market will buy it...

I used to own a Volt (3 yrs) and am now a very happy Tesla Model-X owner (1 yr)... I don't see ever NOT owning an electric again!

[Agni]

Originally Posted by RPiM5

While I do agree with what you are saying about "innovation" I do think that BMW or most other car companies compared to Tesla are misunderstood. You can't quite compare a car to something that is purely a piece of technology. The mobile phone is a piece of technology that can change what it is fundamentally and still be successful and viable in the future. One day we may not even need to aurally talk to each other through a technological device, instead we will have some other means of communicating. But for the automobile, it's different. An automobile will always need to be thing for personal transport on terra firma. That is until the day comes when we have flying cars.

BMW is a car company. Tesla is a car company too and not a technology company. Google is a technology company. So is Apple. Even though cars have become more technologically advanced, it can never be a pure piece of technology as long as it has four wheels.

With that said, I think BMW is executing the right strategy here with all their people who have MBA's. A BMW should always be a BMW, meaning that a 3-Series should always be a drivers car that can out-handle and provide the best driving experience against any of its competitors no matter if it is ICE, Hybrid, or pure EV. Tesla's on the other hand are indeed almost marvels of technological innovation, but if you've ever driven one, the steering feels dead, the handling isn't great, the ride comfort and interior comfort are ok, and the luxury, ergonomic, and aesthetic aspects are still far behind the German Big Three. Tesla is more like driving an iPhone than it is driving a car, it's true and that's OK, because that's what makes Tesla a Tesla. A BMW, Audi, or Mercedes on the other hand, is like driving a luxury car first and driving a piece of technology second.

BMW doesn't need to become Tesla, it needs to be a BMW. I really wish they never got rid of their old slogan "The Ultimate Driving Machine" because a BMW should always be exactly that, with the emphasis on the "Driving" experience, and not just being able to go from point A to B where the "Driving" experience doesn't matter.

BMW is playing it safe, and that is good. They are right, that no one can predict yet how things will play out. We have entire countries that already want to do away with purely combustion engine vehicles in years to come, but that will be difficult and although companies like Tesla are paving the way, there will be difficulties in making everything electric in the future. Such as where all of the material comes from to make the batteries, such as Cobalt from the Democratic Republic of Congo, and other rare materials such as zinc, magnesium, cadmium, manganese, and cobalt oxide.

https://www.theguardian.com/environm...-cobalt-mining

I think that BMW's strategy is the ideal solution to an uncertain future. Streamline production that so that all three types of power-trains can be produced and curtail any production inefficiencies as soon as possible in order to maximize production and save money in the long term. BMW's strategy to also keep the i Division going as their true "Innovation" branch is a great thing too. This is the part of BMW that will compete directly with Tesla. They don't need to have the entire line up products try to be Tesla-fighters, instead give the consumer a choice where they can buy a Tesla or they can buy a Tesla-like BMW that will definitely offer more luxury, more design aesthetics, and more comfort/ergonomics than a Tesla.

The only question that now remains is the future of ///M Division. Will they stay pure ICE, or will they go Hybrid like Mercedes plans to do, or will they go pure Electric? Time will tell, my bet is that 8 years from now, we will see our first Hybrid BMW M5, and then another 8 years after that we may see pure Electric ///M Cars, but I hope they never go pure Electric.

I am just looking forward to the next generation G20 3-Series myself. The only BMW I look forward to buying in the future is a 6spd Manual M340i, if they will make one and bring it to the United States. Especially now that they've discontinued the 6-Series, the G20 M340i is the only car on my radar, I do think that the new 8-Series will be too ugly for me and also too much money. Plus they'll probably not put V12 engine in the new 8-Series and that is a real bummer to me.

The BMW you describe died circa 2012. My e92 n54 335i M was the best car I have ever driven. I made the mistake of getting a 435i, the electric steering is numb and a piece of garbage. Sure, BMW can improve it as they have with M2, but they are super slow with improvements.

Tesla updates the software, specs, and, prices on an almost monthly basis. Plus taking out the middleman of dealerships is such a big boon. No one likes going to a car dealership, their sales tactics are stuck in the 19th century.

You are also comparing a Tesla circa 2014. I used to think the same, I test drove a 2014 Model S and thought the interior was junk, hated the touch screen, and there was no drive feel. And then last month I test drove the 2017 Model S, its like a night and day difference in interior materials, drive feel, steering, etc. Tesla has improved it so much that its like a multi generational jump.

Don't believe me? Here is the preview of model 3 from motor trend on the handling.

What’s blanching, though, is the car’s ride and handling. If anybody was expecting a typical boring electric sedan here, nope. The ride is Alfa Giulia (maybe even Quadrifoglio)–firm, and quickly, I’m carving Stunt Road like a Sochi Olympics giant slalomer, micrometering my swipes at the apexes. I glance at Franz—this OK? “Go for it,” he nods. The Model 3 is so unexpected scalpel-like, I’m sputtering for adjectives. The steering ratio is quick, the effort is light (for me), but there’s enough light tremble against your fingers to hear the cornering negotiations between Stunt Road and these 235/40R19 tires (Continental ProContact RX m+s’s). And to mention body roll is to have already said too much about it. Sure, that battery is low, way down under the floor. But unlike the aluminum Model S, the Tesla Model 3 is composed of steel, too, and this car’s glass ceiling can’t be helping the center of gravity’s height. Nearly-nil body roll? Magic, I’m telling you. Magic. And this is the single-motor, rear-wheel-drive starting point. The already boggled mind boggles further at the mention of Dual Motor and Ludicrous.

http://www.motortrend.com/cars/tesla...-drive-review/

So no Tesla isn't just a "Tech" company they are a automotive company, the employees who work there are car enthusiasts very much just like us on this forum. They are not building some eco-mobile that is the outcome of MBA's like the i3, Nissan Leaf, and Chevy Bolt are. These companies created profiles of customers who are eco-consious and stuff. I am interested in Tesla not for their "eco" stuff but because the car is an automotive and technological marvel. Plus Gigafactory is something these car companies don't have, Apple wins at iPhone because of their amazing supply chain and manufacturing skills that they impart on their suppliers. Tesla too will win because of the immense innovation in manufacturing.

[ORIGIN M.]

Originally Posted by Agni

This is just further proof that BMW and other car companies are run by MBAs and their spreadsheets with product/market fit charts. There is little room for innovation. All the "innovation" is done by 3rd parties like Mobile eye and their tech is sold to BMW's competitors too.

Where as, Tesla is run by software engineers and technologists. Sorry BMW but you have no chance. Model 3 is the iPhone of cars and BMW is starting to look like Nokia and blackberry. Tesla hires some of the best engineers, including, recently the GOD of artificial intelligence: https://techcrunch.com/2017/06/20/te...opilot-vision/

You clearly know exactly what is really going on in this market.

If BMW delays the 3er and X3 Electric, they are going to have to be towed back to the dock. And Mercedes is going to have them for lunch.

[techwhiz]

Tesla may have hired some great software people and tech people, but they still rely on companies like Nvidia, MobileEye, Velodyne LiDAR. Tesla no more makes all the autonomous components much like Apple doesn't make all the hardware in an iPhone.

The standards are all the same ISO-26262 and ASIL A-D.
How you get there may be varied and different but NXP, Nvidia, Velodyne along with other companies are going to supply most of the the hardware and Tesla along with the others will put a software layer on top.

Nvidia makes the processor core that Tesla is using. -> http://www.nvidia.com/object/tesla-and-nvidia.html

I have worked on processor elements for ASIL-D and previously fault tolerant computers.

BTW - I would love to have a Plug-In X1 Hybrid.

[Agni]

Originally Posted by techwhiz

Tesla may have hired some great software people and tech people, but they still rely on companies like Nvidia, MobileEye, Velodyne LiDAR. Tesla no more makes all the autonomous components much like Apple doesn't make all the hardware in an iPhone.

The standards are all the same ISO-26262 and ASIL A-D.
How you get there may be varied and different but NXP, Nvidia, Velodyne along with other companies are going to supply most of the the hardware and Tesla along with the others will put a software layer on top.

Nvidia makes the processor core that Tesla is using. -> http://www.nvidia.com/object/tesla-and-nvidia.html

I have worked on processor elements for ASIL-D and previously fault tolerant computers.

BTW - I would love to have a Plug-In X1 Hybrid.

Tesla dumped Mobile Eye and started hiring all the AI engineers they can get to build their own algorithms and silicon. Also Nvidia built a custom PX chip for Tesla, so no they are not using off the shelf tech. Apple designs its own mobile chips, which is why the iPad and iPhones have the best specs in all the benchmarks. You need that vertical integration to stay ahead.

Also there is a reason Ford fired their Harvard MBA CEO Mark Fields and replaced him with a technologist who was previously heading their technology division...

[ron_jeremy]

http://www.reuters.com/article/us-co...-idUSKBN1AJ1JS

BERLIN (Reuters) - German carmakers are likely to stop developing new combustion engines in as little as six years as they focus investments in electric cars and self-driving technology, auto supplier Continental (CONG.DE) said.

Companies such as Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) and BMW (BMWG.DE) face pressure to clean up their diesel engines two years after VW's emissions test-cheating scandal broke.

German politicians and car bosses agreed on Wednesday to overhaul engine software on 5.3 million diesel cars to cut pollution. However, environmentalists vowed to press ahead with legal action aimed at banning polluting vehicles.

Continental, which makes regulators for exhaust gas cleaning systems in diesel cars and nitrogen oxide-measuring sensors, expects German carmakers to abandon efforts to develop combustion engines from about 2023.

"A new generation of combustion engines will again be developed but after that (around 2023), a further development will no longer be economically justifiable because more and more work will switch into electric mobility," finance chief Wolfgang Schaefer told Reuters in an interview on Thursday.

Britain and France have announced plans to eventually ban sales of new diesel and petrol vehicles and Tesla (TSLA.O) has launched its first mass-market electric car.

Separately, the CFO said he does not expect German carmakers to push for price cuts to help contain the costs of upgrading diesel engine software and offering scrapping incentives.

Volkswagen, Daimler and BMW are preparing for software updates to cost at least 500 million euros (449.72 million pounds) and for scrapping incentives to be even more expensive, Germany's VDA auto industry lobby said.

"We always have price pressures in our industry," Schaefer said.

"We expect no particular changes this year from what we are used to," he said when asked whether he expected carmakers to seek price reductions in the wake of the diesel agreement.

This somewhat contrasts with Continental stakeholder Schaeffler (SHA_p.DE), which in June cut its annual profit guidance, citing increased price pressures in the automotive sector and higher development costs related to electric cars.

Hanover-based Continental earlier on Thursday reported a 10 percent drop in second-quarter adjusted operating profit to 1.16 billion euros, citing higher raw material costs at its tire-making division.

Continental has had a "reasonable" start into the July-to-September business period, the CFO said, even as the company braces for world car production to slow in the second half of the year, especially in the United States.

"Continental put up a solid quarter with some small puts and takes but on the whole was roughly in-line," said Evercore ISI analyst Chris McNally who has an "Underperform" rating on the stock.

[techwhiz]

Originally Posted by Agni

Tesla dumped Mobile Eye and started hiring all the AI engineers they can get to build their own algorithms and silicon. Also Nvidia built a custom PX chip for Tesla, so no they are not using off the shelf tech. Apple designs its own mobile chips, which is why the iPad and iPhones have the best specs in all the benchmarks. You need that vertical integration to stay ahead.

Also there is a reason Ford fired their Harvard MBA CEO Mark Fields and replaced him with a technologist who was previously heading their technology division...

The Nvidia PX2 is available to all comers.
Toyota, MB, Audi, BMW, Bosch, etc are partnered with Nvidia.
I'm in the silicon business and I have yet to see Tesla start ramping the way you need to to build custom chips with processors and yes, where I am, I'd see it. I have not seen a flood of front end design engineers, verification and other silicon engineers start leaving going to Tesla. There is no value added for Tesla to build their own chips. It's much better to use a platform like the PX2. Getting into the processor game, when that isn't your value add is silly.

Apple may design their own chips. but they are an ARM variant and conform to the same instruction set that Qualcomm chips conform to. There are multiple ways to skin a cat. Apple is using GPU technology licensed from someone else in their chips.


An iPhone is a nice packaging job of commodity components.
Screen by Samsung.
Camera by Sony.
Sensors by Broadcom.
Modems by Qualcomm and Intel.
Etc...
CPU technology licensed from ARM, implemented by Apple.
Software based on BSD, GUI by Apple.

Tesla is great at packaging. They have great battery technology.
Tesla started as a battery and drivetrain company.
Initially it was a rolling chassis of a Lotus.

That's not to say that they aren't going to eat the BMW or anything else for lunch, but the prices have to come down to do that.

A Model 3 has $36K base and by the time you configure one with some "real" stuff you can be at $60K.

Finally Tesla is switching to "vegan" leather.
That alone drops me out of ever buying one.

[///M4ster Yoda]

Originally Posted by techwhiz

Finally Tesla is switching to "vegan" leather.
That alone drops me out of ever buying one.

Vegan leather

Only in California

[ReeferCheefer]

how about investing in reliable fuel pumps, turbos and rod bearings

[MSups6]

Plug in Hybrids are the obvious logical answer. Plus they can be both fuel efficient and performance enhancing.

ev ph and ice all one one line, damn love to see how they do it and the efficiency and reliability that will stem form it.