BMW has pledged to continue making petrol cars alongside electric vehicles, as the German luxury carmaker warns of potential disruption in the US electric vehicle market.
The Munich-based manufacturer, which owns Rolls-Royce and Mini brands, revealed it would be taking a “cautious approach” to the global transition towards electric vehicles by developing a broad range of powertrains.
The pledge follows news from President Donald Trump who announced major U-turns on electric vehicle targets for the US.
The newly elected leader cancelled Biden’s 2021 executive order which set a goal to have at least 50 per cent of new vehicles sold in 2030 electric, effectively removing the reliance on petrol and diesel cars.
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BMW pledged to stick with petrol models while US removes electric car targets
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Now BMW board member Jochen Goller explained that it would be “naive to believe that the move towards electrification is a one-way road”.
Goller told The Financial Times: “I think it would be a rollercoaster ride. This is why we are investing in our combustion engines. We are investing in modern plug-in hybrids. And we will continue rolling out electric cars. We anticipated that people wouldn’t want to be discriminated against because of the powertrain.”
The move by BMW also follows a similar position taken by Porsche which revealed last week that it would expand its petrol car range despite the UK pushing towards electric vehicles and net zero goals and looming penalties.
Under the Zero Emission Vehicle mandate car manufacturers would need to have 100 per cent of new car sales electric by 2035 with at least 28 per cent electric by this year, or they could face £15,000 penalties per non-compliant vehicle.
In November, Porsche’s finance chief Lutz Meschke said: “We are currently looking at the possibility of the originally planned all-electric vehicles having a hybrid drive or a combustion engine.
“We are currently in the middle of making conceptual decisions. What is clear is that we are sticking with the combustion engine for much longer.”
Last week, Porsche warned that as a result of it sticking with petrol cars the group expects profit margins to be roughly 14.8 per cent lower than anticipated with figures coming it between £32.5billion and £33billion this year.
Looking at BMW however, analysts detailed how the car company is “better positioned” than its competitors to meet the EU’s stricter emissions targets without resorting to deep discounts on electric vehicles. The targets would require all new car sales to be electric by 2035.
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The company also has said it has “strong protection” against potential US tariffs, with 65 per cent of its US sales coming from locally manufactured vehicles.
UBS analyst Patrick Hummel, added: “From an operational standpoint, I think BMW, outside China, is very well placed. They’re pretty much where they need to be in terms of the EV share in the mix.”
However, BMW faces significant challenges in the Chinese market, which is currently dominating the electric car field. The company saw its sales decline more than 13 per cent last year to 714,530 cars. The drop was more severe than rivals Mercedes-Benz and Audi experienced in the world’s largest automotive market, experts stated.
Meanwhile, Citigroup analysts warned that BMW remains “vulnerable to intensifying price pressure” in China’s already overcrowded market.
The analysts explained: “But we still see a growing market, and therefore, our ambition is clearly that we want to participate in a growing market.”
