The future of BMW rests on a new range of 'Neue Klasse' electric cars – and the technology they will donate to petrol models – as it faces a new threat from China.
BMW says the biggest investment in the company's history – €10 billion ($AU17.8 million) on 40 new or updated models within the next two years – is necessary to keep it competitive against rivals from Europe and China.
The German car giant last week revealed the iX3, the first model in the 'Neue Klasse' – a family of electric cars developed from the ground-up with new underpinnings, styling, technology, and driving ranges up to 800km.
The technology debuted in the electric cars will spread to all future BMW models – including petrol, diesel and hybrid vehicles – from the small 1 Series hatch to the X7 SUV.
It is intended to help fight not only its conventional European prestige competition, but also a wave of Chinese upstarts promising more technology at a lower price, as well as Tesla.
The €10 billion investment – spread across the model range – is the highest in the company's history.
"When you ask our CFO he will tell you it is a horrible amount," BMW board member for development, Joachim Post, told Australian media in Munich.
Asked if BMW would be in financial trouble if the project fails, he told media: "It will not fail.
"We [have been] building cars ... [for] more than a hundred years, we are in this business, and we know how to make cars.
"We just believe in the strengths of our organisation, in the ideas and the power of our engineers ... All these ideas, once you have driven the car and you see that sheer driving pleasure on a completely new level, that's my belief."
The iX3 is the first model in the roll-out, offering 805km of claimed driving range, an all-new exterior, and a futuristic cabin with instruments and vital data projected along the bottom of the windscreen.
Due next year is the i3, an electric alternative to the 3 Series petrol sedan, with more models to come – including petrol cars to appeal to buyers not ready for electric propulsion.
"You have not the risk that you are dependent how steep in which country electric demand is going or not," Post said.
"We are flexible to deliver the best technology for the customer needs in different country, whether infrastructure is going more slowly, or the energy prices [are] too high for customers."
BMW executives equate the record investment to "skipping one generation of cars", and necessary to remain competitive over the next decade.
"It's really new technology, a major leap in every car, and that keeps us confident that we are well prepared. If I think to some others, I would be in a situation not prepared for that," he told media.
While the growing dominance of China in the electric-car market is now apparent, it was not as prevalent when the decision was made in 2021 to proceed with the Neue Klasse project.
"We are coming from innovation, from technology, to say what is coming up for future, what could be feasible, how we can be successful. Because we are BMW, we stand for innovation for features, for functions," the executive said.
"The second point is for sure, we have seen the technology development, especially in China, goes with a fast speed, and to be successful also in that market, technology integration is very important.
"It's a competitive market and there are some cars from China coming up which are good cars ... It is good that we have made a decision to be on the technology jump and to be prepared for that.
"And let me say: I won't be in a situation like others to be not prepared in that matter for the whole fleet, like some are."
Chinese electric cars are now subject to tariffs in Europe, after a European Union investigation found they were being unfairly subsidised by the Chinese government to hit lower retail prices.
"You can see that," Post said of the threat China poses to the automotive industry in Western Europe.
"When the Korean brands came to Europe, [it was the] same discussion. To be competitive in the market, to have an attractive product, attractive features, functions and all over, and have a heritage on the brand, is important.
"The Chinese are going abroad, especially Asia. They will also come to Europe. But to be honest, they also have to earn money for the future.
"And when you look what's going on in the Chinese markets [an EV price war], not all of them are really earning money. They have a reality when they come to Europe. We will see what's coming up."
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
