Over the last year, the global electric vehicle market has slowed considerably. Though EV carmakers like Tesla and BYD report significant sales in the millions, sales forecasts have fallen short. This is notably true for General Motors and Ford Motor Company, which had to readjust their EV sales predictions. But this isn’t the case for all would-be EV carmakers. Specifically, BMW EV sales has seen a significant increase along with profitability. For some, these developments are a surprise. But for others, BMW’s history and approach to EV production explain their success in the marketplace. It would seem they may have found the right formula for making the transition from gas-powered vehicles to electric ones.
(The EV market is cooling–read all about it in this Bold story.)
In examining the rise in BMW EV sales, the company has several strengths that it has leveraged to gain momentum. This includes not only its background of quality-made luxury cars but likewise its engineering expertise. These aspects along with the use of some economies of scale enabled the company to compete with other EV leaders. In fact, BMW’s new line of electric vehicles expected next year will offer features that match and even exceed those of Tesla’s. Understanding this, it’s worth exploring how BMW rose to the top of the global electric vehicle market so quickly. This might offer some key insights for other automakers in overcoming their current setbacks and struggles.
Recent Gains in BMW EV Sales
In looking back at the 2023 global electric vehicle market, BMW EV sales made significant headway. For the year, BMW sold 376,000 EVs, which represented a 75% increase over sales the year prior. Based on this, total electric vehicle sales accounted for 15% of all BMW sales, which is a 9% annual increase. Plus, unlike U.S. automakers pursuing electric vehicle manufacturing, BMW actually made a profit on its EV segment. These figures placed BMW in second place within the luxury EV class behind Tesla. Though BMW EV sales lag far behind Tesla’s 1.8 million annual EV sales, its progress is impressive. And Wall Street seems to be noting this progress given that BMW shares have increased 17% in value since 2021.
Currently, most of the BMW EV sales take place within Europe. However, this is not the long-term vision for the company. As far as electric vehicle manufacturing, BMW plans to only make EVs in its Munich facility by 2027. And by 2030, it anticipates have an electric vehicle manufacturing plant in the U.S. Though this may not rival BYD’s EV sales in Asia, it could limit BYD’s success in Europe. And BMW could significantly affect Tesla’s grip over EV sales in the U.S. At least within the luxury global electric vehicle market, BMW expects to progressively gain ground. The company will be releasing its “New Class” of electric vehicles next year, which will compete at an even higher level. Amidst a slumping EV market overall, BMW’s headway is indeed impressive.
Explaining BMW’s Current Success
Interestingly, BMW has leaned on many of its existing strengths to advance in the global electric vehicle market. The company’s strong brand as well as its engineering background have helped it greatly in this regard. In fact, BMW has been ranked the top auto brand in the world two years in a row. Understandably, BMW had a steep learning curve when it came to battery and software technologies in EVs. This is where Tesla had an advantage. But by investing in these areas, thanks to the company’s high profit margins, BMW EV sales have increased. And with expertise in automotive manufacturing, which Tesla lacks, it’s likely to continue its upward ascent. This is especially true for those who find the familiarity of BMW’s vehicles comforting within the global electric vehicle market.
(EV production is beholden to lithium ion batteries–read up on possible solutions in this Bold story.)
One of the keys to BMW’s recent success in the global electric vehicle market relates to its manufacturing strategy. Within its Munich facility, electric vehicle bodies are manufacturing the same as those fueled by gas and diesel. The same is true for BMW’s hybrid models. This not only creates EV models that look the same as non-EV ones, but it also saves costs. Economies of scale are enjoyed by having these EV models manufactured with the same equipment and technologies. Many in the electric vehicle industry frown upon this, stating its awkward and inefficient. But based on BMW EV sales and profits, it seems these experts have been proved wrong. Consumers find the familiar look of BMW’s electric vehicles less intimidating when making the switch to EVs. And BMW is able to invest less in its transition to EV manufacturing. Clearly, this has been a big win-win for the company.
Can BMW Rival Tesla in the Future?
The existing electric vehicle models for BMW and Tesla both fall within the luxury car segment. However, Tesla has an advantage presently based on a few factors. Tesla’s Model S sells for roughly $75,000 and has a 400 miles range on a full charge. In contrast, BMW’s i7 EV model costs more than $100,000 and has a range of only 320 miles. While BMW has greater expertise in manufacturing, Tesla has the advantage in battery and software areas. For these reasons, Tesla continues to have a stronghold on the global electric vehicle market. And compared to BMW EV sales, Tesla’s sales are about fivefold greater.
Despite this, BMW has reason to be quite hopeful in BMW EV sales in the years to come. By 2025, BMW will release new EV models including a sedan and crossover SUV. These models will boast 20% more energy storage per pound that its existing EV models. This will increase its full-charge distance range by 30%, erasing shortcomings to the range of Tesla’s models. In addition, these newer electric vehicles will have a lower windshield digital display unique to BMW. This will display speed, weather, range, and other data, and it is fully customizable. Lastly, BMW’s new class of EVs will have some autonomous features as well. Each of these improvements will undoubtedly increase BMW’s rank within the global electric vehicle market. And it will also reduce the gap in EV sales between BMW and Tesla. With this in mind, the next few years in the global electric vehicle market should be quite interesting.
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