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A New Era, a New Class: BMW Group steps up technology offensive with comprehensive realignment – uncompromisingly electric, digital and circular

... said Oliver Zipse, Chairman of the Board of Management of BMW AG, in Munich on Wednesday. “We have a clear roadmap for making the transformation of our industry a real competitive advantage for BMW in the coming years: uncompromisingly electric, digital and circular.”

Electric, digital, circular – a clear roadmap for transformation

The BMW Group is driving the transformation towards fully electric connected mobility in three phases. The first phase involved pioneering the e-mobility venture with Project i, embracing the new technology and ultimately transferring electric know-how to series production. Over time, this technology has become integrated across the entire product portfolio, particularly in the form of plug-in hybrids. Apart from the electric drivetrain itself, other key factors driving the transformation include software and the digital interaction with the vehicle.
Back in 2014, the BMW Group created the option to book and pay for services online, directly from the vehicle via the BMW Connected Drive store. Moreover, since 2018 BMW drivers have been able keep their vehicle software up to date via remote software upgrades, similar to downloading the latest software for a smartphone.
The second phase of the transformation began with the option to choose the preferred type of powertrain – from combustion engines through to fully electric power – in one and the same model. The prerequisites are smart vehicle architectures and a highly flexible production network that enable maximum interchangeability between the various drivetrain forms when optimally combined.

World's largest fleet featuring over-the-air upgrades on roads by end of 2021

In terms of digitisation, the BMW Operating System 8, which is scheduled for launch in 2021, is the most powerful in-vehicle data processing system the BMW Group has ever developed. The new operating system makes every BMW a digital powerhouse with the ability to perform over-the-air upgrades at amazing speed.
This year, the BMW Operating System 8 will be installed for the first time in the all-electric BMW iX*, forming the basis for the eighth generation of BMW iDrive – the simplest and safest operating concept to be installed in a vehicle. Both technologies will be subsequently rolled out across the various model series. The number of vehicles that can be updated with remote software upgrades also continues to grow rapidly. By the end of 2021, with well over two million units, the BMW Group will have the world's largest fleet of vehicles capable of installing new or upgrading existing functions over the air.
Going forward, the BMW Operating System 8 will also be capable of providing customers with an even broader range of functions on demand that can be subsequently ordered and installed over the air. Moreover, customer offers will be structured more flexibly, enabling functions to be purchased outright or rented for three years, 12 months or just one month.

Breadth over niche: fully electric models to cover around 90 percent of current market segments by 2023

The combination of smart vehicle architectures and a highly flexible production network will enable the BMW Group to have around a dozen fully electric models on roads worldwide by 2023. This year, the three models already on the market – the BMW i3*, the MINI SE* and the BMW iX3* – will be joined by two key innovative models, namely the BMW iX* and the BMW i4, the latter three months earlier than originally planned. “The launch of the BMW iX* and the BMW i4 will signalise the start of our technology offensive in 2021: these two all-electric vehicles will set the benchmark for BEVs going forward,” said Zipse.
Fully electric versions of the highly popular BMW 5 Series and the BMW X1 will follow in the years to come, together with other models such as the BMW 7 Series and the successor to the MINI Countryman. Based on this strategy, the BMW Group will have at least one fully electric model on the road in around 90 percent of its current market segments by 2023. “We are consciously adopting a broad approach with our all-electric offering rather than staying niche,” Zipse stated.
The strategy will enable the BMW Group to maintain an optimal balance of attractive products and efficient capacity utilisation at its plants, even if demand in certain markets shifts completely towards fully electric vehicles in the coming years. This will give the BMW Group a strong competitive edge in the years ahead.
By the time the second phase of the current transformation reaches its peak in 2025, deliveries of fully electric models will have grown by an average of well over 50 percent annually and therefore more than tenfold compared to 2020. By the end of 2025, the BMW Group will have delivered around two million fully electric vehicles to customers worldwide.

Transformation creating opportunities – the BMW Munich plant is a good example

The BMW Group's plant in Munich, where production of the fully electric BMW i4 is set to commence in 2021, is a prime example of how a forward-looking approach to transformation can bolster competitiveness in the long term. The current production of combustion engines in Munich will be relocated to the Steyr (Austria) and Hams Hall (UK) locations in a step-by-step process, which is scheduled for completion by no later than 2024. By 2026, new vehicle assembly facilities will be built on the existing engine production site, based on the new cluster architecture specifically geared towards electric drivetrains. The BMW Group is investing some € 400 million in these measures.
Employees at the existing facility will be either deployed in other planning and production areas at the Munich plant or transferred to other Group locations in Bavaria. Alongside a raft of other measures, the BMW Group is in the process of expanding its e-Drive production competence centre in Dingolfing from currently 1,200 to up to 2,000 employees. Moreover, in order to meet future requirements across all relevant fields from e-mobility through to data and analytics, the BMW Group is embarking on the biggest qualification offensive in its history, with some 75,000 participants undergoing further training in 2021 in Germany alone. This massive undertaking continues the Group's longstanding tradition of transforming plants and locations when needed, while at the same time safeguarding jobs for the future.

Neue Klasse poised to set standards in digitisation, electrification and sustainability

The third phase of transformation will take effect from 2025 onwards, at which stage the BMW Group’s product range – which has grown successfully over decades – will be realigned on the basis of the Neue Klasse. The Neue Klasse will be characterised by three key aspects: a completely redefined IT and software architecture, a new generation of high-performance electric drivetrains and batteries and a radically new approach to sustainability across the entire vehicle life cycle. These strands are interwoven within an overall vehicle architecture that has been uncompromisingly optimised for electric drivetrains, setting a new benchmark in terms of digitisation and electrification, while at the same time ensuring that the characteristic flair of a typical BMW is transferred to future vehicle generations.
“The BMW Group is never satisfied with what it has achieved so far – that's what sets it apart from the rest of the field. This spirit will characterise the Neue Klasse: high tech on four wheels for customers intent on experiencing in just five years' time how mobility will feel in 2030,” said Zipse.
The Neue Klasse models will thus provide a completely novel user experience never before seen in series production vehicles. So-called “regionalisable technology stacks” will be capable of optimally customising a vehicle’s operating system to suit the varying requirements in each of the world’s major regions and their digital ecosystems, providing continuous upgrades to ensure that the operating system is always fresh. At the same time, the digital first approach systematically integrated in the Neue Klasse will enable an increasing proportion of revenues to be generated over the vehicle's life cycle via individually configurable and bookable features going forward.
The aerodynamic design of the Neue Klasse will be uncompromisingly aimed at electric vehicles with proportions that differ from the past, including a more spacious interior. These innovative features are to be combined with a new generation of electric drivetrain based on a completely newly developed, highly integrated high-voltage battery concept with an optimised cell design. In the Neue Klasse, this unique combination will mean significant leaps in terms of low electricity consumption, with the ultimate aim of matching the range and manufacturing cost of state-of-the-art combustion engines.
The new generation of powertrains will be based on highly scalable modules capable of covering all market segments and Neue Klasse variants from high-volume series through to exclusive high-performance M models. An electric drivetrain based on the hydrogen fuel cell is also a distinct option going forward. The typical BMW driving experience will be additionally enhanced by focusing on the design features of fully electric vehicles, including options for state-of-the-art driver assistance systems and highly automated driving.

Paradigm shift: secondary first and circular economy are goals for future product generations

With its Neue Klasse models, the BMW Group intends to raise the significance of sustainability to a radically new level. Apart from switching to renewable energy to power its own production processes as well as those within the supply chain, the BMW Group will also focus on greatly reducing resource consumption in general. In light of the growing scarcity of finite resources and rising raw materials prices, this step is absolutely imperative in terms of efficiency, but also a crucial lever for promoting sustainability from the BMW Group's perspective going forward. “In 2017, for the first time, mankind extracted more than 100 billion tonnes of raw materials within a single year – a trend that we also need to counteract in the automotive industry,” said Zipse. “Those wishing to use the earth’s scarce resources to drive their business model will need good reasons to do so in the future.”
Accordingly, the proportion of secondary materials used to manufacture the Neue Klasse (such as recycled steel, plastic or aluminium) will be sharply increased with a view to minimising the extraction of primary raw materials. With this principle in mind, the BMW Group is examining a paradigm shift based on a secondary first approach in development – in other words, using secondary materials wherever quality and availability factors allow. “We are intent on ensuring that the 'greenest' electric car on the market is made by BMW,” said Zipse.
In doing so, the BMW Group can build on more than ten years of experience gained during the development of the BMW i3*, the first vehicle established on the basis of a holistic understanding of sustainability. Alongside other innovations, around 25 percent of the materials used for the thermoplastic exterior parts of the BMW i3* are either recycled or produced from renewable resources. A high proportion of renewable raw materials and recyclates are also used to make the interior.
In future, recycling will be taken into account right from the vehicle design stage. This approach is vital, as one of the main challenges currently faced in recycling processes is to extract the materials in a sufficiently pure form. For example, it is essential that a vehicle's electrical systems can be easily removed prior to recycling – in order to avoid mixing the steel and copper contained in the vehicle's wiring harness. Otherwise, the secondary steel recovered will no longer meet the strict safety requirements of the automotive industry. The use of monomaterials, such as for the seats, also needs to be greatly increased in order to maximise the volume of material retained in the recycling loop. Prior to the IAA Mobility in 2021, the BMW Group will provide a detailed explanation of this circular economy approach. It is also exploring the possibility of cross-industry collaborations to make the goal of the circular economy a reality.

2030: Fully electric models to account for at least 50 percent of global deliveries – all model series to include a fully electric option

The third phase will see a gradual decline in the absolute number of combustion engine vehicles delivered to customers. By contrast, the number of fully electric vehicles the BMW Group delivers is expected to continue growing by an average of over 20 percent annually between 2025 and 2030. Based on its current market expectations, fully electric vehicles are expected to account for at least 50 percent of the BMW Group’s deliveries to customers by 2030. The actual figure is likely to vary significantly from one market to the next and will depend largely on the progress made in the regional expansion of charging infrastructure.
By that stage, across the entire product portfolio, all market segments in which the BMW Group operates will include at least one fully electric model. In fact, a number of segments may well be served exclusively by fully electric models. Accordingly, the BMW Group will also be capable of providing a significantly higher market share of fully electric vehicles, assuming demand develops accordingly. The BMW Group expects to have around ten million fully electric vehicles on roads worldwide over the next ten years or so...

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