German automaker BMW AG is reportedly boosting its electric vehicle development expenditures following a more than twofold increase in its deliveries in H1 2023.
Chief Financial Officer Walter Mertl announced Thursday that customers’ growing interest in EVs prompted the company to allocate more funds than it initially planned as part of its electrification initiatives in the global market.
In that sense, BMW AG’s EV development expenditure surged almost a fifth to $2 billion (€1.84 billion) in Q2 2023.
BEV contributed 13% of overall sales in H1 2023
BMW AG’s battery-electric vehicles accounted for 13% of the company’s H1 2023 deliveries. Apparently, the popularity of the i4 sedan and iX3 SUV primarily aided the BEV sales to surge in this period.
Now, BMW aims to raise its EV sales to at least one-fifth of the total figure. That is unsurprising, given how most automakers attempt to beat the industry leader Tesla in the global market.
Tesla’s lead is significantly due to its major price cuts that affected most of its rivals. Meanwhile, Chinese automakers like BYD are leading in their home market, the key market for German brands like VW, BMW, and Mercedes-Benz.
BMW’s pricing strategy
Unlike Tesla and other automakers that joined the price war, BMW kept its EV prices unchanged. CEO Oliver Zipse told reported that the automaker is “rather content” with its Chinese pricing.
In effect, all of its EV models are profitable, with the potential to grow further with the launch of the 7-series and 5-series BEV variants, as per Chief Financial Officer Walter Mertl.
The company also raised its vehicle sales guidance for the year, considering the potential strong profit of the all-new 5-Series sedan and its electric counterpart, i5.
Despite the strong demand for its luxury vehicles, the company expressed concern Tuesday that its cash flow is declining due to the rising cost of parts and logistic-related issues.
In response, the automaker will boost inventories to make up for the high costs to meet the growing demand, Chief Financial Officer Walter Mertl stated Thursday.
See Also:
- BMW China to localize L3 autonomous driving development
- BMW’s first electric 5 Series sedan finally enters series production
- BMW targets 50,000 EV sales in the US in 2023
- AESC to launch its new power battery factory in South Carolina to supply BMW
- BMW i5 photo circulated ahead of the official launch
Some automakers struggle with logistic issues after the semiconductor shortage is alleviated. It has enabled them to build more vehicles since then.
In effect, BMW Group reported 28% in its EBIT to €4.34 billion in Q2 2023 from the same period last year. It ultimately exceeded analyst forecasts of a €4.23 billion figure.
