BMW AG, the German luxury carmaker, has expressed optimism about its sales of electric vehicles (EVs) in 2024, despite the challenges posed by the global chip shortage, the slowdown in China, and the rising competition from local rivals. The company expects to achieve a market share of 20 percent for EVs in 2024, up from 15 percent in 2023, and to surpass its own target of 50 percent by 2030.
BMW has been investing heavily in its EV portfolio, launching new models such as the i7, the iX, the i4, and the MINI SE. The company claims that all its EV variants are profitable and that it has no intention of lowering its prices to match the aggressive discounts offered by some competitors. BMW also boasts of having a strong order book, with a backlog reaching into the first quarter of 2024.
The company’s EV strategy has paid off in terms of sales and margins. In the third quarter of 2023, BMW delivered 64,647 fully electric BMW and MINI vehicles to customers worldwide, an increase of 83.2 percent compared to the same period last year. The EVs accounted for 15.1 percent of the total sales of 621,699 premium vehicles, which rose by 5.8 percent year-on-year. The company also reported a margin of 9.8 percent for its luxury car business, exceeding analyst expectations.
BMW’s Challenges and Opportunities
BMW faces several challenges and opportunities in the global EV market. One of the biggest challenges is the chip shortage, which has disrupted the production and delivery of vehicles across the industry. BMW has managed to mitigate the impact of the chip crisis by prioritizing its most profitable models and regions, but it still expects a negative effect of 70,000 to 90,000 units on its full-year sales.
Another challenge is the slowdown in China, the most important market for Germany’s luxury carmakers. BMW’s deliveries in China decreased by 1.8 percent in the third quarter of 2023, as demand softened and local manufacturers increased their dominance in the EV segment. BMW also faces the risk of retaliation from Beijing, which is investigating the EU’s allegations of unfair subsidies for Chinese EV makers. BMW’s most expensive models, such as the S-Class and the Porsche, could be affected by the trade dispute.
On the other hand, BMW sees opportunities in other regions, such as Europe and the US, where its sales increased by 12.4 percent and 7.6 percent respectively in the third quarter of 2023. The company also expects to benefit from the introduction of new models, such as the fully electric 7-series and 5-series, which will expand its EV offering in every major segment of its business. BMW also plans to leverage its technological edge, such as its fifth-generation eDrive system, which integrates the electric motor, transmission, and power electronics into a single unit, reducing weight and increasing efficiency.
BMW’s Outlook for 2024
BMW has confirmed its guidance for the full year 2023, expecting a slight growth in deliveries to customers worldwide in the automotive segment. The company also expressed confidence about its performance in 2024, citing its strong order intake, its positive volume development, and its dynamic increase in EV sales.
BMW’s CEO Oliver Zipse said: “Our strong product lineup continues to inspire our customers worldwide. Our fully-electric vehicles, in particular, are benefiting from high demand around the globe. We were therefore able to maintain the dynamic pace of our electromobility ramp-up in the first quarter. The BMW Group is on track for slight sales growth in the full year 2023. The main growth drivers in 2023 will be fully-electric vehicles and models from the high-end premium segment – like the new BMW i7, the new BMW 7 Series, the BMW XM and the updated BMW X7.”