BMW expects sales of its electrified cars to surge in the next decade as the technology hits the mainstream, putting it in a race against Tesla and Mercedes Benz.
Plug-in hybrids and all-electric cars across the BMW and Mini brands could account for between 15 and 25 per cent of sales in about 10 years, BMW CEO Harald Krueger said in an interview. To put it in context, that's potentially more than half a million cars based on 2015 sales of 2.25 million vehicles, and compares with a 2 per cent share of deliveries now.
"With more range and more infrastructure being available, you'll see more electrified vehicles," Krueger said during a visit to Los Angeles. "We need some time for this movement and development, but it's nothing that'll go away."
Automakers are under pressure to sell more battery-powered vehicles to make good on heavy investment in the technology and meet tightening emissions regulation. Volkswagen, Opel and Renault are among the European automakers readying models that can drive several hundred miles on a single charge. Volkswagen's I.D. concept - due to go on sale by 2020 - will have a range that's almost twice as long as Tesla's upcoming Model 3.
BMW, which has an all-electric car and a plug-in hybrid that make up its more environmentally friendly "i" sub-brand, was one of the first European manufacturers to produce a standalone electric vehicle. Last month, it unveiled plans for a battery battery powered Mini and an all electric version of the BMW X3 crossover, indicating that the company considers the technology ready for a mainstream rollout.
After claiming the first-mover crown among major carmakers, BMW's efforts slowed as limited driving range and high costs made buyers wary. The i3, which came to market in 2013, costs about $42,400. BMW also offers seven models with plug-in hybrid technology, such as the 7 series and the i8.
As ranges improve and costs drop, competition is intensifying. Mercedes-Benz, set to overtake BMW this year as the world's best-selling luxury automaker for the first time in a decade, predicts electric vehicles will account for as much as 25 per cent of its deliveries by 2025. Mercedes plans to produce at least 10 all electric models by then, and is working on a coupe-style SUV that's part of a new standalone sub-brand dubbed EQ.
European automakers are responding to the threat posed by Tesla, which has proved that cars can be eco-friendly and cool at the same time. The U.S. company is boosting output at its California factory with the aim of making 500,000 vehicles a year by 2018.
Tesla's more established rivals have emphasized plans to manufacture electric models on production lines that also make cars with combustion engines, setting them up for a flexible response to growing demand.
"Electric cars are very important for the future - if you'd like to offer sustainable mobility solutions then you need electrified products," said Krueger. "But in the next couple of years you'll still have combustion engines."