One constant at major auto shows is the presence of company executives during the show, but that won’t be the case for BMW this year at the 2016 Paris Motor Show.
Instead, the brand’s bosses say their time will be better spent staying home to hash out the company’s EV strategy going forward.
According to Reuters, the massive flood of pre-orders for the Tesla Model 3 has spurred Mercedes-Benz, Volkswagen, and BMW to accelerate their own electric-vehicle plans.
Volkswagen wants to launch 30 electric vehicles in the next 10 years, predicting that they’ll make up 25 percent of Volkswagen Auto Group sales by 2025.
The EV market may be poised for growth as battery costs decrease, range increases, and diesel engines fall out of favor due to Volkswagen’s emission cheating scandal. On the other hand, BMW has struggled to sell its i3 EV city car, delivering just 25,000 last year.
That’s caused executives to be split on whether to invest more resources into a vehicle that’s not selling well, or to be patient and let the market grow. This schism will cause most of the company’s management board to skip the Paris Motor Show’s media days, as they instead meet to decide the company’s next move regarding EVs.
One possible outcome will be a decision on whether or not to build an electric Mini.
BMW may be hesitating to dive deeper into EVs due to the fact that its car division has seen more than 8 percent returns for 25 quarters on a row – making the company reluctant to invest deeper in a market segment that’s seen as a money loser. BMW has tried to jumpstart i3 sales by increasing range, and that’s given sales a lift.
If the company does move forward with an electric Mini, it would likely try to get one to market by 2019, but one challenge is finding a Mini platform that can accommodate batteries, as well as finding the cash to get factories ready for EV production. An electric Mini becomes more of an attractive proposition as governments work to further restrict pollution while also offering more subsidies for EVs and the necessary infrastructure, but BMW won’t be able to make a Mini-branded version of the i3, because it’s cost prohibitive. BMW already does have plans to build a mid-size crossover with electric power.
BMW could possibly expand its non-EV offerings, especially in the performance and ultra-luxury spaces, to offset profits that may be lost by investing in the EV market.