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NEWS
BMW chief: get with the EV program
Shareholder and consumer confidence at stake as BMW gears up to enter the fraught EV marketBMW CEO Norbert Reithofer has delivered the industry’s hardest punch yet to counter the consumer resistance hampering EV sales around the world.
With the launch of his company’s i3 just months away, Dr Reithofer issued a statement outlining his vision of the future for the people of Germany – and ultimately the world. The statement set out to tackle the fear, uncertainty and doubt surrounding electric cars the world over. In what was clearly intended as a rousing speech, Dr Reithofer used last week’s AGM to blame what he sees as aspects of the national character for an over-cautious approach to EVs to date.
“Germany is respected and admired the world over for its engineering expertise and powers of innovation, but ‘German angst’ is also a concept the rest of the world is familiar with,” he told shareholders in Munich.
“We like to engage in long and fearful discussions because we Germans tend to see more problems than opportunities, and it is no different with electro-mobility.”
When Bloomberg went in search of a second opinion, Stefan Bratzel, director of the Centre of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, gave this caution around buying EVs a sharper focus. He puts it down to worldwide arrival in the second phase of the new-tech adoption trajectory.
“After the hype, we’re now in a phase of disenchantment on electric mobility,” he said. “In Germany, that’s a good thing because you look at things more pragmatically.”
There’s no sign of any short-term solution to it, either, Dr Bratzel continued. By his reckoning, EV penetration of the total global car market will reach just 2-3 per cent by 2020, with hybrids accounting for about 12 per cent.
This gave Dr Reithofer’s speech more importance than most in rallying the shareholder troops as the company enters a period of uncertainty. By the time he fronts up at the 2014 AGM, the i3 will be on sale and the i8 well on the way.
To that end, even more than is usual for such speeches, it was all about bolstering the company’s self-belief. The message was clear: if there’s one company in the world that can carry off a successful volume EV launch in the face of all that market lethargy, it’s BMW.
“Try it for yourselves, ladies and gentlemen: Google BMW i, and see which company people believe is capable of shaping the mobility of tomorrow,” he said. “Customers trust in our expertise and powers of innovation. They trust that we can deliver ‘sheer driving pleasure’ in our electric cars, too.”
To reinforce things, he supplied details of the company’s growth in recent years, culminating in a record performance for 2012. Over five years from 2007, the company’s global production infrastructure grew from 23 plants in 12 countries to 29 facilities in 14 countries, he said. Its 2012 performance yielded its highest ever shareholder dividends – around a third of its net profit.
By year’s end, 2012, its workforce was 5500 people stronger and its share price up 40 per cent year on year. It’s the only auto maker and the only German – indeed European – company on Forbes’ list of the world’s 500 most admired companies, he added.
Outlining why the i3 (pictured) and i8 deserve the loyalty of shareholders and buyers alike, he told his audience they have the emotional appeal and performance metrics to maintain the brand values. “They are genuine BMWs,” he assured them.
Their high-tech dual-module build method boosts production efficiency by reducing component numbers and build time. They’re also genuinely global cars, he added, tailorable to the different needs of drivers in different markets. This includes putting the i3 to market with an optional range extender engine.
Media and analyst feedback has been “encouraging”, he said. Then, perhaps to prevent accusations of overdoing it, he pulled back. This is not to say the company has put too many eggs in the electro-mobility basket, he said. “BMW i will not decide our future success alone. But the fact of the matter is, we need both, evolution and revolution; continuing development and radical change.”
As much as anything, he explained, the i series cars are intended to secure the future of its fossil-powered line-up by helping BMW comply with fleet-average CO2 regulations worldwide. With political forces calling for a 95g/km average by 2020, dropping to 68-78g by 2025, he’s not confident car makers can achieve such numbers without investing billions expanding into alt-power. BMW currently averages of 138g/km CO2 and consumption of 5L/100km diesel and 6.3L/100km petrol.
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Written byJeremy Bass
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