VW and BMW: EV profits to match ICE sooner than predicted

Friday, 13 May 2022

BMW and Volkswagen are both saying that profits on their respective EV platforms will match those of their ICE vehicles far sooner than originally expected.

While Volkswagen previously predicted its EVs would match profit margins on combustion engine vehicles within two to three years, CEO Herbert Diess has now said that the company will do it sooner than that thanks to it being in a “robust financial position”, despite the challenging economic environment.

'We expect that the e-mobility business will be as profitable as the combustion-engine business earlier than planned,' Diess said at Volkswagen's annual shareholder meeting this week.

Herbert Diess, chief executive officer of Volkswagen, expects the company’s EVs to be as profitable as its ICE vehicles sooner than originally thought.

'Through good crisis management, we are financially robust and have strengthened our resilience,' he said.

**READ MORE:

Volkswagen expects to build 1.3 million electric vehicles by 2023 and overtake Tesla to become the world’s leading EV maker by 2025.

* Toyota spending $19.3 billion to secure EV battery supplies

* Mercedes, Audi fast-track EVs as Porsche builds new battery factory

BMW CEO Oliver Zipse has said that BMW EVs on the company’s upcoming new platform will be as profitable as ICE models.

* EVs will be cheaper than combustion cars by 2027

* VW gives the auto industry's old guard hope

Diess did not give an exact timeline for when EVs would match ICE profitability, however he has previously said that Volkswagen will overtake Tesla and become the world's No. 1 electric car maker by 2025.

Volkswagen delivered 452,000 EVs globally last year and aims for half of its total production output to be fully electric by 2030. It plans to build 800,000 EVs this year and 1.3 million in 2023.

Meanwhile, BMW CEO Oliver Zipse has stated that BMW EVs underpinned by the company's latest Neue Klasse (New Class) electric platform that is set to debut under an all-electric 3 Series in 2025 will be 'as profitable as vehicles with state-of-the-art combustion engines.”

Zipse made his comments at BMW’s annual shareholder meeting where he also said that the company will initially focus its Neue Klasse architecture on the midsize premium segment, such as the 3 Series and X3.

BMW is targeting cost savings of 30% from the Neue Klasse platform’s new cylindrical cell format, which is similar in design to batteries used by Tesla.

Zipse said BMW will have eight all-electric models on the road this year and that in the first three months of 2022 the company’s EV sales more than doubled compared to the prior-year quarter. He said the company is aiming for a cumulative two million sales of all-electric cars by 2025.

'By 2030, at least half our global sales should come from all-electric vehicles. We are naturally doing everything we can to meet this goal earlier,” he said, adding that BMW Group's Mini and Rolls-Royce brands will be all-electric from the early 2030s.