BMW and Volkswagen both claim that profits from their respective electric car platforms will catch up to those from their ICE vehicles far sooner than projected. While Volkswagen originally expected that its electric vehicles would meet profit margins on gasoline-powered vehicles in two to three years, CEO Herbert Diess now claims that the business will accomplish it sooner due to its "strong financial position," despite the current economic environment.
Diess recently said at Volkswagen's annual shareholder meeting they expect the e-mobility business will be as profitable as the combustion-engine business earlier than planned. Through good crisis management, the company is confident they are financially robust and have strengthened their resilience.
Diess did not provide a specific date for when EVs will be profitable on par with ICE vehicles, although he has previously stated that Volkswagen will overcome Tesla and become the world's leading electric vehicle manufacturer by 2025.
Last year, Volkswagen delivered 452,000 electric vehicles worldwide, with the goal of having half of its total production output be fully electric by 2030. It intends to produce 800,000 electric vehicles this year and 1.3 million by 2023.
The Future of VW's EV Fleet
BMW New Models
Meanwhile, BMW CEO Oliver Zipse has indicated that BMW EVs powered on the company's latest Neue Klasse (New Class) electric platform, which will debut in 2025 as an all-electric 3 Series, will be as profitable as vehicles powered by cutting-edge combustion engines.
Zipse made his remarks during BMW's annual shareholder meeting, where he also stated that the company's Neue Klasse architecture will initially be focused on the midsize luxury sector, such as the 3 Series and X3. The Neue Klasse platform's new cylindrical cell shape, which is comparable in design to Tesla's batteries, is expected to save BMW 30% in costs.
According to Zipse, BMW will have eight all-electric cars on the road this year, with EV sales more than doubling in the first three months of 2022 compared to the previous quarter. He stated that the corporation aims to sell two million all-electric vehicles by 2025 and the company added that BMW Group's Mini and Rolls-Royce brands will be all-electric from the early 2030s.
The EV Move
Up until about a year or so ago, Traditional carmakers were derided as relics of the past, clinging to combustion engines despite Tesla zooming past them in terms of technological competence and stock market price. Herbert Diess, the CEO of Volkswagen AG, is altering the discourse.
Last year, Diess ambitiously spoke about his goal to oust Elon Musk as the Technoking of electric vehicles and it transformed VW into a hot EV auto stock.
This has helped VW do a comeback over the scandal that pre-dated Diess. VW admits to manipulating millions of diesel engines to mask how unclean they were little over six years ago. Globally, the corporation paid out more than $30 billion in damages and settlements, and its reputation was irreparably damaged.
When experts published a series of bullish reviews on VW's first dedicated EV for the mass market, the ID.3 hatchback, rating it as the most credible contender to Tesla's Model 3, the tide began to shift. What was still necessary was a shakeup, something that would draw new attention to the organization.
Elon Musk’s View
Musk does not view Volkswagen as a threat nor is he intimidated by the company’s goals. In fact, he has nothing but good things to say. Elon Musk believes that, aside from Tesla, Volkswagen is the firm making the most progress on electric vehicles, according to a Financial Times interview last week.
When asked which electric vehicle company has most impressed him, Elon Musk dodged a direct response, instead offering an unexpected response. He didn't nominate any actual companies, such as Rivian, Lucid, Nio, or others, instead choosing Volkswagen.
From an EV standpoint, any legacy automaker that also develops electric vehicles can be considered a startup, but Musk's choice of Volkswagen over another company is crucial. It could be related to his friendly relationship with Volkswagen Group CEO Herbert Diess.
The two CEOs have congratulated each other on their electric car achievements, exchanged test drives of Tesla and VW EVs, and Diess has even invited Musk to speak to 200 Volkswagen officials via video chat in October 2021. Apart from VW, Musk does admit that he sees tough competition coming from Chinese EV makers in the future.