At BMW, flexible architecture is a must

Premium automakers are now divided in their strategies for building electric vehicles.

Mercedes-Benz and Audi are developing dedicated EV architectures to better compete against a growing threat in the segment, California's Tesla.

But BMW is following a different path, and its new management team will not change course and follow the pack.

CEO Oliver Zipse believes BMW's integrated platform, which can underpin both EVs and models with internal combustion engines, gives the automaker a unique selling point for customers — the flexibility to have a model with either electric powertrain or gasoline engine.

It is a conservative EV investment strategy that Zipse has carried over from his predecessor Harald Krüger.

It is partly driven by the issues luxury makers face in their European home market. Automakers there will be under pressure to invest heavily to meet new regulations to cut their fleet emissions nearly in half by 2030, from 95 grams per kilometer to 59. A decade from now, BMW expects that every second car it sells in Europe will be either a plug-in hybrid or a battery-electric vehicle to meet that target.

Udo Hänle, who recently transitioned from his job as BMW's senior vice president of production strategy to a new senior role in engineering, explains that the resulting market upheaval makes product flexibility more attractive.

"In our view, market forecasts are too uncertain to warrant inflexible, electro-only platforms," Hänle told Automotive News Europe. "What we don't want is for our plants to operate below capacity."

The approach makes financial sense to BMW because in the early years of the market's transition to electrified vehicles, factories will need to be able to quickly respond to changing demand for combustion-driven and battery-powered vehicles.

"Building a new plant would cost roughly €1 billion ($1.1 billion), whereas ramping up existing facilities to produce battery-electric vehicles will amount to a three-digit-million investment, mainly for body shop and assembly," Hänle said.

BMW will retain its portfolio strategy of one architecture for front-wheel-drive vehicles and one for rear-wheel-drive vehicles. That common distinction in the combustion engine world doesn't exist on EV-only platforms.

Critics say BMW's strategy is putting a premium on finances over innovation and could lead to uncompetitive products. Hänle argued that won't be the case.

"We are not going to compromise on anything that will impact the customer," he said.

BMW experimented unsuccessfully with a purpose-built EV with the i3, which arrived in 2013. The automaker concedes that the i3's construction and unique body-on-frame layout was costly, and it won't carry it over to subsequent EVs.

In November, Zipse extolled the virtues of the group's more cautious approach, even billing it as a competitive differentiator.

"We don't believe it is at all necessary [to have a specialized platform] to achieve the desired product characteristics," said the CEO, who took over in August. "Instead, you can accomplish these very well with an intelligent platform that fulfills all the requirements."

Audi's parent company, Volkswagen Group, takes a different view.

It believes that engineers can take full advantage of their freedom to develop traits unique to Audi's dedicated PPE EV architecture, including its 800-volt system that lowers weight, saves space and enables ultrafast recharging.

Similarly, Mercedes is developing its EVA2 platform that will underpin the upcoming EQS sedan.

Zipse believes BMW's integrated platform will not force trade-offs, such as limited electric range.

"It's not the case that you have to make compromises if you plan long in advance," he said.

That argument against EV-only architectures will have to face the challenge of a European market that is growing more demanding. The European Union is determined to break its dependence on fossil fuels that contribute to climate change by going fully carbon neutral by 2050. To facilitate this, new EU Commission President Ursula von der Leyen said in December that she plans to propose even more punitive 2030 fleet emission targets.

If that happens, BMW could have to reconsider the value of maintaining platforms that still accommodate gasoline engine models.