One of the things BMW keeps pointing out, amid all talks about electrification, is the fact that the company is focused more on profitability instead of sheer sales volumes. In this regard, the Germans are still ahead of their rivals from Mercedes-Benz, even though the Stuttgart-based company is doing better in terms of sales. It’s the profit the company gets for each vehicle sold that matters the most in Munich and it looks like that’s not going to change any time soon.
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The CEO of the BMW Group, Harald Krueger, said in a recent interview that even though EVs are not nearly as profitable as conventional cars, the company he’s running will still be focused on profitability in the future. The goal of the company is apparently to maintain a 8 percent to 10 percent return on sales at its automotive division. “We’re sticking to our 8 to 10 percent goal and maintain this range, even when electric mobility becomes more widespread,” Krueger told journalists at the Frankfurt Motor Show. “We need to reach that corridor in order to finance our investments in new areas like digitalization,” he added.
The biggest challenge will be to offset the money invested in research and development as electric cars are still in their incipient phase and the technology needed to make them desirable is expensive at the moment. Furthermore, raising the price too high would make them unattractive to the wider audiences they need to appeal to so balancing these aspects might be trickier than expected.
Other companies are doing the same, looking to save some money in all areas they can. Daimler for example recently announced that they are trying to offset expenses worth nearly 4 billion Euros in the years leading up to 2025, to invest this money into their new EQ family of electric vehicles.