BMW CFO: Combustion Engine Sales Has Peaked. Sales Growth to be Electric Vehicles

[05SCM33]

Via Reuters - https://www.reuters.com/business/aut...es-2024-01-15/

BMW CFO: sales growth is mostly electric as combustion engine 'tipping point' passes

BERLIN, Jan 15 (Reuters) - BMW (BMWG.DE) has passed the tipping point for combustion engine vehicle sales and now generates most sales growth from electric cars, its chief financial officer said in a media roundtable.

"The tipping point for the combustion engine is already there," CFO Walter Mertl said, 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.

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 said, pointing to the higher costs of introducing new battery technologies for later models.

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 3 million 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%.

BMW CEO Oliver Zipse said in September that the company would be "at least as profitable" when selling the "Neue Klasse" EVs at scale, bolstered by their lower battery costs and higher efficiency per kilowatt hour.

[Tejas1836]

"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"

Artificial peak due to .gov restrictions. How can you purchase something that does not exist?
Return the free market and see what happens

[Car-Addicted]

My tipping point for BMW's is rapidly approaching.

[LogicalApex]

Originally Posted by Tejas1836

"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"

Artificial peak due to .gov restrictions. How can you purchase something that does not exist?
Return the free market and see what happens

The government deadline hasn't arrived yet. Consumers can still choose ICE cars and they are increasingly choosing EVs. The market isn't rejecting them.

Even BMW is selling EVs in the US like the i3 and others which lack any tax incentives so there is no government "muddling" involved.

Consumers prefer EVs as they offer a lot of positives.

[Tejas1836]

Originally Posted by LogicalApex

The government deadline hasn't arrived yet. Consumers can still choose ICE cars and they are increasingly choosing EVs. The market isn't rejecting them.

Even BMW is selling EVs in the US like the i3 and others which lack any tax incentives so there is no government "muddling" involved.

Consumers prefer EVs as they offer a lot of positives.

Actually, the rate of consumer adoption of EVs has peaked, as a whole, and is decreasing. Hertz can't drop them fast enough. Ford is abundant in EVs they cannot sell and 400 dealers have opted out of Ford's EV sales program. Ford continues to lose billions and has postponed building EV factories.
https://www.theverge.com/2023/10/26/...ne-q3-earnings

The high end EVs like BMW and Porsche buck that trend however.

Recent Yahoo-Ipsos poll showed "Overall, 57% of respondents said they were not likely to purchase an electric vehicle (defined as either fully electric or plug-in hybrid) the next time they purchase a vehicle. Only 31% of respondents were likely to purchase an electric vehicle, while 11% said they didn’t know."
https://finance.yahoo.com/news/new-y...130040140.html

Consumers don't want EVs, citing cost, insurance premiums, range anxiety, lack of charging stations, charging stations that do not work. I think that there may soon be a lot of used Teslas on the market up north before next winter.

[BMWCCA1]

Originally Posted by LogicalApex

Even BMW is selling EVs in the US like the i3 and others which lack any tax incentives so there is no government "muddling" involved.

Do you know when the last new i3 was sold in the USA? And that car's success was due to tax incentives based on cheap 2-year leases.

I'll have to say that after 47-years representing BMW as my vocation, I think I got out at the right time!

[Ugly Kar]

EV's not doing so well this winter.
https://www.theregister.com/2024/01/...n_deep_freeze/

[F32Fleet]

Originally Posted by Tejas1836

Actually, the rate of consumer adoption of EVs has peaked, as a whole, and is decreasing. Hertz can't drop them fast enough. Ford is abundant in EVs they cannot sell and 400 dealers have opted out of Ford's EV sales program. Ford continues to lose billions and has postponed building EV factories.
https://www.theverge.com/2023/10/26/...ne-q3-earnings

The high end EVs like BMW and Porsche buck that trend however.

Recent Yahoo-Ipsos poll showed "Overall, 57% of respondents said they were not likely to purchase an electric vehicle (defined as either fully electric or plug-in hybrid) the next time they purchase a vehicle. Only 31% of respondents were likely to purchase an electric vehicle, while 11% said they didn’t know."
https://finance.yahoo.com/news/new-y...130040140.html

Consumers don't want EVs, citing cost, insurance premiums, range anxiety, lack of charging stations, charging stations that do not work. I think that there may soon be a lot of used Teslas on the market up north before next winter.

It's peaking at a specific price point. If EVs were selling at Corolla prices u might have a point