And Tesla is not its only new target.
The coronavirus pandemic has taken on a toll on automakers, including BMW. But the good news is that a majority of these companies are emerging from the storm in generally good condition. However, total sales and profits were down in 2020 and the focus is now on recovery. BMW's finance chief, in fact, already has a plan in place to return to its pre-pandemic operating margin target.
Speaking to Reuters, Nicolas Peter admitted new vehicle orders had dropped due to lockdowns but said that "if activity starts again after the middle of February, we should be able to deliver a reasonable first quarter." This could be made possible by a general improvement in market conditions, a new Brexit deal, and BMW's own plans to increase shares in its Chinese joint venture, called BMW Brilliance, from 55 percent to 75 percent next year.
If all goes to plan, this should help BMW return to a pre-pandemic operating margin target of 8 percent to 10 percent. "We're not talking about far away in the future, but it is a goal that we're looking at systematically in the short term," he said. But in order to make this all happen, BMW is doubling down on electric vehicles. The BMW iX and upcoming i4 will play crucial roles in this.
However, this EV-centric focus will come at the expense of some of its pure diesel and gasoline-engine vehicles. In other words, some of those models will be converted to all-electric and/or plug-in hybrids. Peter did not go into detail regarding which models are on the list. This conversion will allow the company to meet strict new emissions targets in Europe and China.
The new Biden administration is expected to enact its own set of new rules. Interestingly, Peter also admitted BMW's EV rivals not only include Tesla but also China's Nio, partly because of its high focus on the digital experience. Peter says BMW this car and driver interaction is a major focus.
BMW also needs to find a way to make EVs more profitable despite the fact they cost more to develop and account for a smaller portion of overall sales. Fortunately, BMW's global EV sales increased last year by 31.8 percent compared to 2019, and plans to double that figure this year.