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BMW Delaying Mass EV Production Because There's Not Enough Profit

Technology / 4 Comments

If you're not earning money, what's the point?

Although it was kind of late to the electric vehicle game compared to some other automakers, BMW is quickly making up for lost time and will soon launch more EVs of its own. However, according to Automotive News Europe, BMW CEO Harald Krueger has announced the automaker will delay the mass rollout of EVs until 2020 because current EV technology is simply not profitable enough for volume production. In other words, Krueger will wait until the technology improves because no one likes losing money.

"We wanted to wait for the fifth generation to be much more cost competitive," Krueger told analysts in Munich on Thursday. "We do not want to scale up with the fourth generation," he said. The recently updated i3s is the German automaker's only EV at the moment, but that will soon change with the Tesla Model S rivaling i4 electric sedan, which was recently announced, enters production. It turns out the cost advantage between BMW's current fourth- and fifth-generation EV tech is a "two-digit number," according to Krueger. "If you want to win the race, you must be the most cost competitive in the segment, otherwise you cannot scale up the volume," he added.

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Although many electric vehicle advocates may criticize BMW for lagging behind in the EV segment, Krueger and co. are still absolutely making the right business decision here. Investing money where the return is guaranteed to be minimal makes no sense. Best thing to do is wait until the technology is in a stronger position. At this point, BMW is going all-in with EVs, having recently announced an $8.6 billion increase in R&D spending. The goal is to bring 25 electrified vehicles to market by 2025.