BMW will prioritize the production of electric vehicles (EVs) amid the chip crisis and the Ukraine-Russia conflict. According to a report from Reuters on Thursday (17/3/2022), BMW cut its auto division’s profit margin forecast for 2022.
BMW expects the chip crisis to continue throughout the year. The German automaker has warned of supply chain disruptions due to Russia’s invasion of Ukraine.
BMW, which sold 2.52 million vehicles last year, hopes to sell more cars this year. However, due to various obstacles facing the automotive industry, BMW now expects output to be equivalent to 2021.
“However, his goal of higher-end electric vehicle production remains unchanged,” said Chief Technical Officer Frank Weber.
The company targets sales of electric vehicles to double to more than 200 thousand this year. BMW is targeting 2 million electric vehicle sales by 2025.
Strategically, BMW will form five new partnerships for battery factories in locations close to electric vehicle assembly lines in Europe, China and the NAFTA region, said Head of Purchasing Joachim Post.
BMW suspended production at several German plants following Russia’s invasion of Ukraine, but will return to full production next week.
The Ukraine crisis and COVID-19-related disruptions in China have forced automakers from Toyota to Tesla to close factories temporarily and raise prices. Many warn of further changes if things are unstable.
BMW said that meanwhile it was still able to procure some spare parts from Western Ukraine and engaged suppliers from other countries to keep the production line running.
Rising raw material prices are likely to cost the company hundreds of millions of euros this year. However, BMW said it would keep its Ukrainian supplier in the medium to long term.