• Thu. Apr 11th, 2024

After a strong quarter: BMW increases investment in electric cars

ByRita Wright

Nov 3, 2023
BMW can significantly increase sales in Europe and the USA.

BMW further increased deliveries and earnings in the third quarter. Sales increased by 5.8 percent in the third quarter compared to the previous year. Operating profit rose to 4.35 billion euros between June and September. The Munich-based company aims to achieve a return on sales of 9 to 10.5 percent for the year as a whole, compared to 10.3 percent in the third quarter.

“We are therefore clearly on track to achieve the annual targets we raised in August,” said BMW CEO Oliver Zipse in Munich on Friday. For comparison: Mercedes
achieved a return on sales of 14.5 percent in the third quarter, while Tesla only achieved an operating margin of 7.6 percent in the third quarter.

BMW is still benefiting from its well-performing models with combustion engines. BMW sold more cars in Europe and the USA in particular. In contrast, sales in China, BMW’s largest market, fell slightly. While competitor Mercedes is struggling with battery delivery problems, BMW’s global production is running as planned.

The Group is also making progress with electromobility. In the third quarter, sales of electric models (excluding hybrids) rose by almost 80 percent to around 93,000 units. This means that every sixth BMW or Mini sold is now an electric car.

Group CEO Zipse announced that around a quarter of Group vehicles sold worldwide will be electric by 2025. By 2030, this figure should be a good half. Unlike its competitors, BMW has not yet set a phase-out date for petrol and diesel models.

BMW CEO Oliver Zipse.
BMW CEO Oliver Zipse is increasing spending on electromobility. Photo: BMW

However, in order to accelerate the drive turnaround, BMW is significantly increasing spending on new plants and equipment. In the third quarter, investments increased to 1.8 billion euros, bringing the investment ratio to 4.5 percent. Significantly more money is to flow in the coming months, with CFO Walter Mertl forecasting a ratio of six percent for the year as a whole.

The money will flow primarily into the construction of the new plant in Debrecen, Hungary, where the “New Class” is to be produced from 2025. The new family of electric cars will initially start with a compact electric saloon, but other models will then be added very quickly.