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BMW Making A Serious Bet That Could Determine Its Future

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If things go well, BMW could end up being extremely profitable. If not, BMW could encounter a disaster.

To an outsider looking at Germany’s auto manufacturers, it would appear that each of the three, Daimler, the Volkswagen Group, and BMW, are working hard to develop the next generation of electric cars so they can prepare themselves for a transition to a battery-powered era. The insider, on the other hand, sees that each of these three automakers is taking a different approach towards meeting that goal.

Volkswagen is taking the biggest leap, investing billions in electric-only platforms that take advantage of the flexibility of the EV powertrain but require huge changes in the way cars are developed. But, as Automotive News reports, BMW’s soon-to-be CEO Oliver Zipse wants to steer his company in another direction. Instead of building a myriad of EV-only platforms, BMW wants to ease into this whole electrification business rather than invest in it too heavily and risk losses if the transition doesn’t take place quickly enough.

That’s a sentiment the executive relayed to the automotive press during a speech at BMW’s Oxford plant. In it, he detailed how he believes that BMW needs to take a more conservative route and build platforms that can support both gasoline engines and electric powertrains in order to stay profitable.

"If we predict the success of 3 series, we can be pretty much spot on,” he said. "To predict electromobility is much more difficult. If you are not flexible either way, it’s very difficult for you to succeed in the market. Succeeding is staying profitable.” Zipse’s concern is that it’s too hard to predict when consumer demand for EVs will reach a point where BMW will need to focus on drastically improving its electric cars. The alternative, for now, is to build models that support electrification to satisfy that demand, but can also be sold with gasoline engines in case BMW finds that customers aren’t ready to go electric just yet. The downside, however, is that this philosophy means BMW won't be making EVs as competitive as its EV platform-derived rivals.

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The release of the all-electric Mini Cooper SE is evidence of the BMW Group’s caution when it comes to electric cars. Rather than give the Mini a dedicated EV-only platform that could house bigger batteries and enable longer range, BMW retrofitted the Mini’s bones so it could be built as an electric car. Because of that, the Cooper SE is somewhat underwhelming. If BMW wanted to put itself on the map as an EV leader rather than just a casual adopter, it could have taken the more costly approach of building a new electric car platform and making the Cooper SE a direct competitor to the upcoming Volkswagen ID.3.

But that kind of move puts BMW at risk of losing its investment if the car isn’t a success. Of course, there’s also the danger that consumers fall in love with the range and packaging advantages of an EV-only platform and flock to automakers that are building them, which would leave BMW scrambling to develop the architecture to catch up. Only time will tell which strategy ends up winning.

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