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Friday / 14 June 2024
HomeFeaturesPetrol cars have peaked – Electric is the future

Petrol cars have peaked – Electric is the future

BMW says demand for its luxury cars powered by gasoline reached its highest point last year and expects all-electric models to lead future growth.

The German premium-car maker has well-filled order books for battery cars with a target of half a million vehicle sales this year, roughly a fifth of total deliveries, Chief Financial Officer Walter Mertl said.

BMW group EV sales jumped 75% last year, driven by models like the i4 sedan and as overall sales growth has slowed in the US and some European countries.

“The tipping point for combustion engines was last year,” Mertl, 49, said on a call with journalists, with regulation to cut carbon dioxide emissions capping any expansion. “Future volume growth will primarily come from battery-electric vehicles.”

After years of surging year-on-year deliveries, the pace of demand acceleration for EVs has become less clear.

While the market is still getting bigger, carmakers have had to cave to Tesla’s price war and many consumers are still on the fence due to a lack of charging infrastructure and high price tags.

Carmakers including Ford and General Motors have scaled back ambitious rollout plans, and BMW competitor Audi last month said it’s paring back how many models it’ll bring to market to avoid burdening factories and dealers amid the slowdown.

EVs made up 9.4% of total sales at the Volkswagen premium marque, trailing the BMW brand at 15%.

BMW saw strong EV orders during November and December, said Mertl, with demand in Europe set to keep growing. The manufacturer hasn’t seen any pullback, and expects the new i5 sedan and additional Mini brand EVs to boost sales, he said.

“The current sales plateau of combustion cars will continue and then fall off slightly,” he said.

Next year, the company is shifting to new vehicle underpinnings, dubbed “Neue Klasse” in a retro throwback to popular models built in the 1960s and early 70s. The new technology targets halving battery costs compared to the carmaker’s current generation to help lift EV margins.

By the end of the decade, BMW’s EVs will have higher returns than its combustion-engine cars, Mertl said.

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