As rivals map their exit strategies, BMW refuses to write off combustion engine cars

July 3, 2021, 11:00 AM UTC

This week BMW hoped to celebrate the first of many flagship iX electric crossovers running off the assembly line in its refurbished Dingolfing plant in Bavaria. 

The Tesla Model X rival that is expected to ship to customers at the end of this year is only BMW’s third battery-powered model in eight years, but it should put to bed any doubt that the automaker cannot compete with other popular zero-emission cars.

However, the German automaker ended up dodging a dreaded question about an end of production: namely, when it would build its final gasoline-burning car.

Unequivocally committing to a timeline can grab media headlines, send a signal to capital markets, and encourage suppliers to make investments. Other premium brands including JaguarVolvo Cars, and BMW’s domestic competitor Audi have already taken the step.

“An expiry date for combustion engine cars is not sensible in my view,” Milan Nedeljković, head of production for the BMW Group, told reporters on Friday. 

He went on to describe the “enormous growth targets” the company had for its upcoming battery-electric vehicles now that it can offer more than just its slow-selling i3, a pint-size city car launched in 2013, and the more recent China-built iX3.

The iX xDrive50, which retails from €98,000 in Germany, should be able to drive over 600 kilometers on one charge in Europe and over 300 miles in the U.S., based on EPA testing. Thanks to two electric motors with a total output of 370 kilowatts, it can accelerate to 100 km per hour (62 mph) in under five seconds.

Yet BMW has emphasized its plug-in hybrids, which marry an internal combustion engine with a small lithium-ion battery, capable only of short trips before relying on gasoline again.

Nedeljković also refused to be drawn in on the various exit strategies of BMW’s competitors.

“It’s very difficult to predict how quickly demand for electrified vehicles increases and for combustion engine cars decreases, and as long as that’s not clear, not only is it risky to predict that date, it’s not even sensible,” he said.

Eye on the European Green Deal

Fewer questions are more hotly debated in the industry than the long-term future of cars with internal combustion engines, as much depends on how far governments will go to incentivize new technology. The higher price tag puts electric cars out of the reach of many buyers, and gaps in charging infrastructure discourages others.

On July 14, the European Commission is set to unveil what might very well be the world’s most comprehensive and ambitious climate legislation package for the EU, the third-largest light vehicle market after China and the United States.

The European Green Deal, which will affect every industry, is expected to include steep cuts in fleet emissions for new cars by 2030 that can only be reached by the wide-scale mass deployment of battery-powered electric models like the BMW iX.

This prompted Audi to declare late last month the final new gas-powered car it develops will launch in 2026, after which only electric models will debut. The last combustion engine car Audi builds will be built no later than 2033. 

Sister brand Volkswagen likewise committed to an end date with a staggered phaseout starting with Europe in 2033 and gradually spreading to China and the U.S. 

BMW has been reluctant, however, in part because of its lack of investment in a dedicated platform for battery-powered EVs that can fully utilize the benefits in terms of interior space and design. Only in March did the company present a concrete plan to prioritize battery-powered electric vehicles over those with combustion engines

“As long as there is a demand for combustion engine cars, we will build them,” Nedeljković said.

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