BMW says it could sell a million electric vehicles with government incentives, as European new-car CO2 emissions continue to rise

BMW says it could build “hundreds” of battery-electric models if demand was there, in response to a report that Europe’s automotive CO2 levels had risen for the second year in a row.

“There is no customer requests for BEVs,” BMW’s director of development, Klaus Frölich, told a shocked round-table interview in Munich yesterday. “There are regulator requests for BEVs.”

Frölich’s insight to BMW’s attitude towards full-electric cars coincides with evidence that Europe’s new-car CO2 emissions have increased by 1.6 per cent since 2017.

That led the head of Europe’s Transport and Environment lobby group to accuse car-makers of holding back their EVs in favour of more profitable SUVs.

“Rising sales of polluting yet very profitable SUVs. Carmakers suppressing choice and availability of electric models – only 25 battery/hydrogen models available in 2018,” he tweeted.

That drove Frölich to fire back that Transport and Environment overlooked a lack of EV demand in Europe.

“If we have a big offer, a big incentive, we could flood Europe and sell a million cars but Europeans won’t buy these things,” Frölich insisted.

“What they [Transport and Environment] ignore is that the European customer is not prepared to take the risk on an EV because the infrastructure is not there, resale is not known.

“Customers in Europe do not buy EVs. We pressed these cars into the market and they’re not wanted.

“We can deliver an electrified vehicle to each person but they will not buy them.”

A major hurdle is a lack of government incentives for EVs across Europe and another is that high electricity costs in some countries have eroded the running cost advantages of EVs.

“You change the customers with incentives, not change the cars. In Munich it’s 50c per kWh and a four-cylinder diesel is cheaper to drive than an EV. It’s below 20c per kWh in France.”

BMW insists it will have 25 electrified cars (those with a plug, in BMW-speak) by 2025. It says it will increase its electrified vehicle volumes by 30 per cent a year from 2021 and it is turning its focus more and more to plug-in hybrids.

Frölich insists that BMW’s planned way forward is to offer EVs, which are in bigger demand in the US and China, but to concentrate heavily on plug-in hybrid (PHEV) models with 80km of pure EV range.

“We think the customers in Europe they are reluctant to buy BEVs and the plug-ins are the better option. The PHEVs are built on the same architecture as the BEVs, so the ‘Eagle Wing’ battery goes into the floor and we can give them extra range by adding battery modules.

“Europeans are very reluctant to buy a BEV, but the Europeans have fewer cars in the garage than a BMW customer in the US.

“In the US they can have different cars for different purposes, like pick-ups and SUVs and smaller cars, but often the households in Europe have only one car so they are reluctant to rely purely on a BEV.

“PHEV gives them full freedom and 80km of EV range.”

Frölich also moved quickly to shut down accusations that car-makers were too slow to react to the EV push in Europe, particularly.

“I think we are coming at the right time because we don’t have enough consumers who buy these cars. We need €70,000-€100,000 and this is not the market segment where you can make volumes.

“You have to pay for range, this is what people don’t seem to understand,” he insisted.

“You have a 180d and an M4 and the price difference is the performance. With an EV the price difference will be performance and range.

“The difference between 350km and 600km of EV range will be 10,000 euros. You put them both out there and see how many people will buy the 600km car.

“All this range discussion is complete bullshit because it’s an economic proposition of how much you can afford.”

BMW considers itself to be “five years ahead” of other European brands in EV development, and Frölich himself headed up the initial strategy investigations into EVs.

“Where they [Transport and Environment] are correct is that a lot of companies started EV development in 2015 and make a lot of speeches about it now. We started on October 15, 2004.

“I was the head of strategy and it was the start of enabling electrification. The learning car was the X6 mild-hybrid.”

But there is some truth in Transport and Environment’s accusations that cost is a major factor holding back EVs and plug-ins until the EU’s new 2021 emissions regulations kick in.

“They [PHEVs] are not more expensive than BEVs. They are thousands more expensive than internal-combustion cars but we can’t charge that to customers and those regulations are reducing our profit pool,” Frölich says.

“We can’t have the same margin on those cars. We know. The level is between the internal-combustion margin is halfway more.

“But if we charged the customers for that cost, we would have downsizing with customers going from a 3 Series to a 1 Series customer.”

Part of the problem for the rise in CO2 emissions in Europe was down to the demise of diesels and petrol power becoming the most popular for the second year in succession.

The European Environment Agency, which issued the CO2 emissions warning, said car emissions were up 1.6 per cent as petrol car sales rose from 7.6 million to 8.5 million, and even emissions from new vans rose 1.3 percent.

Only 302,000 plug-in cars were sold in 2018.

“Although the gap between average CO2 emissions from diesel and petrol cars is narrowing, it is still significant – especially as almost one million more new petrol cars were sold last year compared to 2017,” European Automobile Manufacturers Association (ACEA) Secretary General, Erik Jonnaert, explained.

“Amidst the strong push for alternatively-powered vehicles, we should not write off the latest generation of diesel cars, which not only emit less CO2 than their petrol counterparts, but also deliver low on-road pollutant emissions in practice,” he said.