In a statement made at the IAA car show in Munich, BMW’s Chief Executive, Oliver Zipse, expressed confidence that the forthcoming “Neue Klasse” electric vehicle (EV) range will prove to be just as profitable as the existing battery-powered cars in the luxury automaker’s portfolio. The Neue Klasse, scheduled for launch in 2025, stands as a pivotal component of BMW’s strategy to emulate past achievements and compete with EV pioneer Tesla, who is also making a prominent appearance at this year’s IAA event.
“We are very profitable with electric cars… already today,” Zipse emphasized during his interaction with reporters, highlighting that the Neue Klasse, colloquially referred to as the “New Class,” will maintain and potentially surpass the current levels of profitability. Zipse went on to underscore that BMW intends to remain within its established long-term profit margin target of 8% to 10% for its automotive segment, with the possibility of exceeding this range in certain quarters.
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For the fiscal year 2023, BMW recently revised its EBIT (Earnings Before Interest and Taxes) margin outlook for its cars division, projecting it to fall within the range of 9% to 10.5%, up from the previous estimate of 8% to 10%. This adjustment is attributed to a robust order backlog and improved availability of the company’s premium vehicles.
Zipse also provided insight into BMW’s plans, indicating that the company intends to introduce six new models within 24 months of the Neue Klasse’s debut. These models will encompass a diverse range of vehicles, from “sports activity vehicles” to sedans, all powered by electric drivetrains.
“What they all have in common is the pure electric heart that powers them,” Zipse remarked, emphasizing the electrified focus of BMW’s future offerings.
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Production of the Neue Klasse will commence at BMW’s facility in Debrecen, Hungary, where the company is investing a substantial 2 billion euros ($2.2 billion) in new battery manufacturing and assembly operations specifically tailored for this EV lineup. Subsequently, production will expand to additional facilities located in Munich, China, and Mexico.
The development of the Neue Klasse aims to achieve two significant objectives: reducing battery pack costs by 50% and attaining a 25% increase in range per kilowatt-hour, a crucial metric for evaluating energy efficiency. BMW executives have consistently stressed these objectives as critical milestones in their EV strategy.
