BMW CEO says Electric Cars won’t be profitable at first

BMW CEO Norbert Reithofer says that he is not expecting new vehicle and powertrain concepts like the Megacity Vehicle and electric drive to immediately contribute to the BMW Group’s revenues.

In the Institute for the Automotive Industry in Nuertingen, Germany, Reithofer said: “It may be that you don’t earn any money with such technologies during the first product cycle. Here, conventional drive has to cross-subsidize the new technology.”

Even thought electric cars will be more expensive, it will just cover up for the research, development, testing, and productions costs. Reithofer admits that electric cars will be expensive in the beginning.

The first to venture into a full electric drive by BMW will come in the form of the Megacity Vehicle released in 2013. This subcompact vehicle will be built in Leipzig, Germany. A passenger compartment will be available. The Megacity Vehicle will also has a front end drive module made from aluminum, but it will also rely heavily on carbon fiber parts — light yet very expensive at the moment. This mixture of components removes weight for the batteries. Even if it costs a lot more that ordinary steel parts, BMW will not give up its development of carbon fiber components because they believe that this is the future of automobile body construction.

As for now, BMW will continue to rely on conventional drives with gasoline and diesel engines so that their overall profitability will not suffer. Reithofer predicts that “in 2020, electric vehicles will be 5 to 15 percent of the electric vehicle market. So we will have a long transition.”

Source: Autonews