VW, BMW pick different platform paths to reach electric goals
September 10, 2020
BMW CEO Oliver Zipse in August continued his strong defense of the company’s strategy to stick with what it calls “the power of choice” when it came to platforms. He told analysts during the company’s half-year results call that building factories dedicated to a single electric platform was just too costly when EV market share in Europe was still below 10 percent.
“We are convinced if you are not able to include EV structures into your normal industrial structures, your cost base will go out of range,” he said.
The time to launch an EV dedicated platform, he said, was in the second half of the decade when EVs are expected to account for more than half of the European market. “But for at least for the next six to seven years we are exactly spot on with our strategy,” he added.
BMW has made the right call, said Arndt Ellinghorst, head of automotive research at investment bank Sanford C. Bernstein. “There is still a perception that BMW’s flexible platform approach is a disadvantage as it compromises the BEV [battery-electric vehicle] product,” he wrote in a new report. “A dedicated battery-electric platform offers some advantages in battery packaging and interior/exterior design, but a vast majority of customers either won’t notice or even appreciate these differences.”
The strategy “should enable BMW to deliver its 8 percent to 10 percent margin from 2022 onwards,” he added.
The head of the automaker’s powerful workers union disagrees with the company’s strategy. “Only with our own e-architecture can we fully exploit the advantages of an electric vehicle,” Manfred Schoch told Germany’s Der Spiegel magazine in June. Schoch said a dedicated electric platform is needed if BMW wants to avoid being overtaken by competitors.
BMW will roll out more electric versions from its existing model families as part of its strategy, including the next-generation 7-Series flagship sedan as well as the 5-Series midsize family and BMW X1 compact crossover.
The VW ID3, which will be VW Group’s first MEB-based car, has started to arrive at European showrooms. It is the beginning of plan to have 50 full-electric VW Group models available globally by 2025. Some of the ID3’s platform mates are being revealed, including the ID4 and Skoda Enyaq iV compact crossovers.
Scale is key to VW Group achieving returns on the platform. To help reach a margin-making volume with MEB VW Group is signing up other automakers to use it. Ford Motor was the first to agree as part of a wider ranging tie-up. Ford’s MEB-based car car will arrive in 2023.
In addition, electric vehicle startup Fisker has said it is in talks with VW Group to use MEB, although a final agreement hasn’t been reached.
Other EV startups such as U.S.-based Lucid and UK electric van specialist Arrival are touting the packaging advantages of their electric-only platforms, which they say benefit from being free of any legacy engineering.
However, not all startups are sticking solely with electric power. China’s Li Auto, which recently went public with a stock offering that valued it at $14 billion, has chosen a more flexible platform that can incorporate hybrids.
Said Ellinghorst: “We wonder why this is appreciated for a startup while BMW, with all its engineering experience, is facing ongoing criticism for its approach.”