German automaker BMW has passed the “tipping point” for combustion engine vehicle sales growth and now most of its sales generates from electric cars, the company’s chief financial officer Walter Mertl, said in a media roundtable, Reuters reported. “The tipping point for the combustion engine is already there. The current sales plateau for combustion cars will continue and then fall slightly,” he said. He also pointed out that the tipping point for ICE cars had been passed last year, noting that the looming environmental regulation will restrict sales of such vehicles.
Mertl added that carmakers are under pressure to ramp up their EV offerings as regulatory deadlines from China to the European Union and some US states will begin to ban sales of new fossil fuel emitting cars from the middle of the next decade. The carmaker achieved 15% all-electric sales share last year and plans to raise that to 33% by 2026. The company plans to roll out six new models in its ‘Neue Klasse’ or EV-only line, a multibillion-euro effort to jump the technology gap.
However, the company’s margins for combustion engine and all-electric cars won’t reach parity before at least 2026, Mertl acknowledged, pointing to the higher costs of introducing new battery technologies for later models. Without elaborating much, he said that discounting is also likely for cars in certain price ranges.
The carmaker is sticking to its previously announced target of selling three million vehicles by 2030 with an 8-10% margin in its automotive segment, he added. It is a conservative goal sitting below its expected 2023 margin of around 10.3%. In September, CEO Oliver Zipse had said that the company would be “at least as profitable” when selling the “Neue Klasse” EVs at scale, bolstered by their lower battery costs and higher efficiency per kilowatt hour.