While this is a time of retrenchment in electric vehicles (EVs) and alternative powertrains for automakers, BMW appears to be heading in the other direction, Automotive News enterprise editor Dave Guilford writes. Entrepreneurs are “flaming out” (figuratively and sometimes literally) and some major automakers are pushing EVs farther back on the product pipeline as excitement wanes among car shoppers.
With two small-scale electric vehicle test projects (the finished Mini E and the ongoing ActiveE programs), BMW sees global market trends changing and believes EVs will make play a significant role. “We consider electric mobility a technology with the potential to achieve emission-free driving pleasure,” BMW CEO Norbert Reithofer said in a statement accompanying BMW’s third-quarter earnings.
Reithofer reaffirmed the company’s commitment to electric drive technology and to corporate sustainability. He talked about BMW’s commitment to using recycled materials, offering end-of-life recycling and integrating renewable energy into its manufacturing process.
So, what’s in it for BMW? Stringent regulatory requirements are in place from the European Union and US governments, and that’s taxing for luxury carmakers looking for high profit margins and well-loaded luxury cars. For BMW, there’s something larger looming on the horizon.
Projections from United Nations are gaining attention from automakers like BMW – that “megacities” are flourishing around the world. The UN sees the world’s population clustering into megacities with populations of more than 10 million. By 2015, there could be 35 cities at that size, totaling nearly 360 million people.
BMW has been taking the concept quite seriously since 2007, when it initiated its BMW Megacity Project. The BMW i3 electric car came from this initiative and we will likely see a new version at the Los Angeles Auto Show later this month.
BMW is hoping electrified versions of its high-performance luxury cars will bode well in these megacities where consumer demographics are expected to be right for global business, wealth and consumption. There are also regulatory moves that cities are taking to reduce traffic congestion and smog, such as the city of London adding a congestion charge of 10 pounds – about $16 US – a day for drivers to gain access to the center city.
BMW sees densely populated megacities holding opportunities for companies willing to get creative and adapt to change such as new forms of mobility. BMW is partnering in a car sharing program, DriveNow, in Germany and San Francisco. German luxury rival Daimler also takes car sharing seriously through its fast-growing Car2go subsidiary.