BMW Hedges on Hybrids, Via Partnership with Peugeot
BMW and France’s PSA Peugeot Citroën issued a press release this week stating that the two companies, the longtime partners in engine development, would begin developing hybrid technologies together. Bloggers jumped to the conclusion that the move is a sign of strength and shows a renewed commitment about electric drive vehicles. They immediately started guessing about which models would get hybrid or plug-in hybrid drivetrains.
Is it going to be a hybrid 1-series? Will it be a gas-electric Mini? Maybe a hybrid Mini Clubman or even a Mini Countryman crossover SUV with a plug-in hybrid system?
(Actually, the conjecture started in October when BMW made a nearly identical preliminary announcement about the tie-up with PSA.)
It makes for a fun blog post to guess at possibly-could-be-maybe future vehicles, but of course, there’s no real evidence to back up those images in the crystal ball. According to the press release, the new venture, dubbed BMW Peugeot Citroën Electrification, vaguely states that the two companies will work on battery packs, generators, power electronics and chargers, and software for hybrid systems—the generic stuff that all hybrids need. Executives offered banal quotes, talking about “competitive advantages” and “cost structures.”
The announcement is more accurately interpreted as a sign of weakness—a fearful response to falling way behind in the hybrid space. In other words, instead of taking a bold step and making an investment, these companies don’t have to really commit to a full R&D budget and time commitment. After all, BMW is not a big company and would find it challenging to pursue the full range of advanced auto technologies all at the same time.
Have We Seen This Before?
BMW played the same card in 2005, when it glommed on to the hybrid technology project with General Motors and Daimler-Chrysler that yielded the two-mode hybrid system. At the time, Burkhard Goschel, BMW’s head of development, said, “The creation of a shared technology platform for hybrid drives will allow us to more quickly integrate the best technologies on the market.”
Six years later, what did this “quick integration” produce? One vehicle: the $90,000 BMW X6 SUV hybrid. How many of those did BMW sell in 2010? Ahem, 248 units. That puts its 2010 hybrid sales at No. 25 out of the 27 hybrids currently on the market. No. 26 was the $104,000 Lexus LS 600h L, followed by BMW’s other hybrid, the $103,000 BMW Hybrid 7 (using a system not developed in the G.M.-Daimler partnership), in dead last place.
As a point of reference, BMW sold 11,727 of its clean diesel vehicles in the U.S. in 2010— 7,925 units of the BMW X5 SUV and 3,892 units of the BMW 335d The company sells more of its diesel SUVs in month than all its hybrids in a year.
More Hope for EVs
If BMW’s hybrid efforts have been completely lame, at least it’s pure electric program has shown some life. The company has put a lot of effort into the Mini-E and ActiveE test programs—and the electric production model, the Megacity, is slated for 2013. With regard to the “BMW Peugeot Citroën Electrification” joint project, it’s more likely to yield components for that promising EV than a mainstream affordable hybrid Mini or 1-Series.
Most of all, the tie-up with PSA is a cost-saving hedge to keep hybrid development slowly moving forward at BMW, just in case regulations or market forces push the company to get serious about hybrids, rather than continuing to issuing press releases every few years about another joint development project.