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BMW’s Neue Klasse EVs Aim To Be Profitable As Gas Engines Get More Expensive

In every way possible, from design to performance to financial stability, the original Neue Klasse (“New Class”) cars of the 1960s and ’70s defined what we understand BMW to be today. That BMW’s next generation of electric vehicles bears the same name underscores how important they are to the German automaker’s future as well. And in time, the hope is that these EVs will reach the same level of profitability as BMW’s internal combustion engine cars—which, by the way, are not getting cheaper to build.

Very much the opposite, said Frank Weber, BMW’s management board member in charge of development on a media roundtable this week after the debut of the new Vision Neue Klasse X. That car, its sedan counterpart and the new ground-up EV platform both use are very big deals for BMW, Weber said.

And the company certainly does not plan on losing money on them.

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BMW is doing surprisingly well in the EV race

The maker of the Ultimate Driving Machine is still offering combustion vehicles and hybrids, but its EVs tend to overperform on range. Moreover, they made up 15% of BMW’s total global sales last year, which is much higher than most rivals. Its next-generation “New Class” EVs aim to do even better.

“Once this is in high-volume—which means it’s very difficult to have this from the first day on—when everything is in full swing and running at the capacity it was designed for, then you will see margin parity [or] the same profitability level with the combustion engines,” Weber said. 

BMW’s Neue Klasse platform and its next-generation technology are designed for that purpose, Weber said. He explained that these projections are expected in the next four years or so, with Neue Klasse production running at “full volume” around 2027. 

Reaching cost parity and profitability levels on par with gas engines is a major priority of the auto industry as it struggles to transition to a mostly electric future. By some estimates, automakers are, on average, losing around $6,000 on each EV sold at $50,000. Luxury automakers like BMW, Porsche and Audi have fared better thanks to their higher price tags. Meanwhile, even luxury startups have their own challenges of achieving the scale needed to survive long-term. 

Weber added BMW’s EV profitability goals account for an anticipated cost increase in making combustion engines as well. That’s because of ever-stricter environmental rules in the U.S., Europe and China, all of which mean gas and diesel engines have to run more cleanly, a cost increase BMW will have to deal with over time.  

“Future emission regulations also will add significant cost to the combustion engine,” he said.

For now, BMW finds itself in a surprisingly good position to undertake that transition. Its current lineup of EVs, like the BMW i5, i4 and iX, are profitable, a company spokesperson told InsideEVs. 

And while it has not committed to an end date for its combustion engines as other automakers have, it has ended production of them at its historic headquarters in Munich and had an extremely successful 2023 on the EV sales front. Last year, BMW pulled off a record 376,183 global electric sales, a relatively high 15% of its total volume. 

Meanwhile, Weber said, BMW offers a range of powertrains—combustion, hybrid and EV—in its lineup, and right now that variety approach seems to be working. 

“There is a type of uncertainty in the market that we are observing,” Weber said. “For us, it is really key that you find the right solution” for your individual needs, he added. 

Even so, the Neue Klasse platform is a quantum leap over BMW’s successful current EV offerings. The platform has been developed from the ground up with all-electric vehicles in mind, unlike some current models, and it integrates batteries in the structure of the car instead of placing them on a plate that sits on the floor. It will pack new batteries rated at 75-, 90-, and 105-kWh capacities, as well as an 800-volt electric architecture capable of charging speeds of up to 270 kilowatts—which should make these cars among the quickest-charging ones on the road. 

The Vision Neue Klasse X is expected to go on sale in the second half of next year, possibly named the next-generation iX3. BMW officials said it will eventually be built in Hungary, China and Mexico, which should allow it to qualify for EV tax incentives. 

The Neue Klasse EVs will use new cylindrical battery cells capable of more energy density, higher range and reduced charging times compared to BMW’s current EVs. Moreover, Weber said that the Neue Klasse previews whole new families of technologies that will be seen throughout the BMW product portfolio, including hybrid and gas-powered cars. “Everything you see on that car ends up in series production,” he said, which could include more powerful onboard computing, more advanced automated driving functions and potentially other functions. 

“The Neue Klasse will renew all the technologies that will be available throughout the BMW product portfolio,” Weber said. “It is part of our strategy to make this latest technology available to most of our products in a very, very short period of time.”

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