BMW iX2 to supercharge German brand’s EV sales

The 2024 BMW iX2 has laid down another price-focussed pillar in the German brand’s ambitious growth plans for electric vehicles to account for half of its sales within a few years.

But some of the cheapest prices for the dual-motor version of BMW’s new small electric SUV may be short-lived in the face of an anticipated increase to the government’s luxury car tax threshold when the new financial year ticks over on July 1.

BMW Australia product planning chief Brendan Michel believes the two iX2 models that each limbo under the LCT threshold will coax about half of all X2 buyers to the EV side of the four-variants line-up as BMW continues to outpace key German rivals in the switch to EV.

He says the electric car market is evolving quickly – buoyed by vehicles such as the popular iX1, the iX2’s sister model – and along with the imminent introduction of the federal government’s new 2025 fuel-efficiency standards he expects sales to supercharge over coming years.

“The market is moving fast… it’s not just a small niche segment,” said Michel at the launch of the BMW iX2 (watch this space for our first local review on May 1).

Figures supplied by the Federal Chamber of Automotive Industries (FCAI) show that 24 per cent of the record 5844 BMWs sold in the first three months of 2024 were EVs.

While Volvo is leading the way in traditional luxury brands transitioning to EV (with 31 per cent of its Q1 sales being electric) BMW is way ahead on outright prestige EV sales – at least if you exclude Tesla.

In comparison, 18 per cent of Mercedes-Benz’s sales and just three per cent of Audi’s sales were electric during the same period.

As two of the six BMW models below the LCT threshold – in turn allowing them to take advantage of the government’s fringe benefits tax (FBT) exemption that can save buyers thousands annually – Michel believes the iX2 variants will play a significant role in luring buyers to the EV side.

“They’re cracking prices within our own internal hierarchy,” he said, adding that he is anticipating an even three-way sales split between the entry X2 xDrive20i, flagship X2 M35i and dual-motor iX2 xDrive30 that for now is the sole EV in the range.

He believes that could shift to a four-way split with the mid-year arrival of the more affordable single-motor iX2 eDrive20, in turn making the EV sales split within the broader X2 range close to 50-50.

“We had to be very aggressive with our pricing and our spec level in our new electric cars and that’s what we’ve been able to achieve.”

However, BMW Australia product and pricing manager for X cars (SUVs), Daniel Silverwood, cautions that an anticipated increase in the LCT threshold could flow through to the iX2, with the dual-motor model being the likely candidate for a price increase.

“Once we know what the likely luxury car tax change is then we do need to consider what that means for the portfolio,” he said.

Having remained largely steady for years, the LCT threshold for fuel-efficient vehicles increased by $5527 from FY22 to FY23 and by $4416 from FY23 to FY24.

A similar increase could see the slender $2800 difference between single-motor and dual-motor versions of the iX2 – just 3.3 per cent – grow to levels more akin to other markets, with BMW effectively having more headroom to move while still leveraging the generous tax benefits.

In the UK, for example, buyers of the iX2 xDrive30 pay 11.3 per cent more than the iX2 eDrive20.

Michel says BMW “will look at separation” between the two iX2 model variants in future, but he said no decisions would be made until details of LCT threshold changes were announced.

“We haven’t planned anything like that – we just have to wait and see,” he said. “We’ve got a strategy in place with what we currently know. Until further changes, then that’s when we’ll change our strategy.”

Meanwhile, BMW is working to secure more supply of its iX3, the battery-electric version of the X3 mid-size SUV.

Michel says there are wait lists stretching out four to five months for the Chinese-made electric SUV.

The iX3 currently accounts for 38 per cent of all sales of the popular SUV that is the brand’s second best-selling nameplate (behind the X1).

“We’re selling every single one we can get our hands on… the car’s going very, very well,” said Michel. “We’re trying to secure more.”

He said he wasn’t expecting to learn about the potential for additional allocation for a couple of months, but that he was pushing to get supply to better meet demand.

Michel also pointed out that the iX3, which is priced from $89,100 before on-road costs, is $8800 cheaper than the 30i –the top-seller in the X3 line-up.

Granted, the iX3 is two-wheel drive – with a single motor driving the rear wheels – whereas most X3 variants drive all four wheels.

But it’s still impressive that an EV is the second biggest seller in the range. Part of the success of the iX3, he believes, is its similarity to the petrol-powered models.

Being based on the same architecture and sharing the same body, cabin layout and technology means there’s a familiarity that luxury buyer like, he said.

“It’s so familiar to our customers… coming out of a petrol or diesel X3,” said Michel, adding that familiarity is an important part of the BMW EV appeal.

“The car looks the same, the interior is the same, all the tech in the car, it’s the same operation from our internal combustion cars… infotainment’s the same.”

It’s all part of the ambitious plan for BMW to continue growing its EV sales by responding to increasing consumer interest in the electric car space.

Key to the BMW push will be the imminent arrival of several all-new ‘Neue Klasse’ models that will introduce the company’s latest-generation EV architecture and battery/motor tech.

Currently showcased as concepts – including the recently revealed Vision Neue Klasse X – Neue Klasse will form the basis of the next-gen 3 Series and X3, as well as the various derivatives including the 4 Series and X4.

In total there are at least six models planned off the Neue Klasse fundamentals by 2030 – and each promises big advances.

“They’re talking 30 per cent higher density in the batteries, 30 per cent better range, 30 per cent faster charging than what we’re currently seeing… so the future looks really good and really bright for us,” said Michel.

He added that those kind of advances will be crucial steps towards BMW selling more EVs than petrol/diesel vehicles.

“I would say when this Neue Klasse comes along… we’ll be close to that,” he said.

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