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      11-17-2020, 08:12 PM   #1
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BMW CEO on 2025 and Beyond - CLAR Evolution Not Only Electric

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Oliver Zipse excerpts from Bayerische Motoren Werke AG Earnings Call Transcript-Nov. 5, 2020
https://seekingalpha.com/article/438...all-transcript
Quote:
Our perspective for the second half of the decade of the 2020. We expect demand for fully-electric vehicles to continue to increase significantly from 2025 onwards. Exactly then, just at the right time, we will launch Phase 3 of our transformation. Here in addition to electrification, the focus will be on extended digital connectivity and also volume capability. In 10 years, we aim to have more than 7 million electrified BMW Group vehicles on the roads, 2/3 of them fully-electric. The company is already scaling up for this both strategically and technologically. Therefore, we have established two new cross- functional areas internally to coordinate, shape and take company-wide responsibility for key areas of transformation.

First, in-car digitalization. Over 20 years ago, we began focusing on digitalization in our vehicles. And to this very day, we have brought 40 million connected vehicles to roads worldwide. They collect 25 million bits of traffic information daily. Now we are strengthening digital across the company and creating a new central decision- making function. All key software functions have been pooled into the new Digital Car unit since October and reports directly to the Board member for development, Frank Weber. Our vehicles are managed devices, they are always up-to-date with the latest services and features. We’re continuing to expand our very successful Operating System 7 to support this. And it goes without saying that our user interface is easy to operate because technology should serve the user and digital technologies are at the heart of BMW, hardware and software, are equally important to our customers.

And secondly, underlying product development and its implications for our vehicle architecture from the middle of the decade. Our new cluster architecture is geared mainly, but not only towards electric drivetrains. This area reports directly to me. It is organizationally connected to all divisions, from markets, finance, procurement, development and production, all the way to sales and marketing. This gives us greater leverage and makes us much faster, also in our cooperation with partners. The objective is for the new architecture to create an overall optimum. Our new plant in Hungary, among other plants, will play a key role in this, ramping up the new architecture from the middle of the decade.

Let me give you some perspective of how we think about architectures. They are renewed every five to seven years. And our current architectures we have, they are twofold. It’s a front- wheel architecture and the rear-wheel architecture. And especially in the second renew phase where we are now going into we flexibilized these architectures quite successfully, by the way, because we were able to introduce it with the current setup. Now we go almost biologically into the next phase after 2025. And the question is, what kind of character do these successor platforms have? And I think due to the very high-volume of electric vehicles, they will be more aligned towards electric demand. They will not be electric-only. They must start electric-only. And so it’s very much a successor architecture, but under new boundary conditions. And we call that Phase 3 because, for us, is a continue.

What kind of customers do we have? And there is no such thing as the battery electric customer or the PH customer or the combustion engine customer, every customer is quite different. So it’s a matter, and that is the topic of Power of Choice that we let the consumer decide what is best for his needs. The customer in Oslo, due to the very good charging infrastructure is much more likely to drive a battery electric vehicle than a customer in Naples because there’s no charging structure at all. So it’s both in Europe and what we try to do that for every customer, for every customer need and taste, we have something to offer him. And that strategy is working excellently for us. All the BEVs we are offering, they are more or less sold out currently, even an underestimated product like the MINI BEV, it’s going extremely well in the market, and we expect the same thing for the BEVs to follow. The same is even more true for the PH, because a lot of customers whether they’re on the business fleet side or on the private customer side, they feel interested. They would like to try out what is actually electromobility. They want to – they don’t take the risk of making a big bet on charging infrastructure, they want to blend into. And that has proven very successful to also because BMW plug-in hybrids are excellent to drive. From all customer tests we get, BMW PHs are one of the best in the market around. So we would like to convince our customers.

And not to forget, this line of the equation is always forgotten that there is still a combustion engine market, which is extremely efficient towards CO2 reduction. That’s always forgotten. And it’s in Europe and United States. And also in China, today, the majority of the market. And at least for 2021 and 2022 and 2023, that will be the case. And the rest we will see. And I allow myself to say we will see because our company is structured in a way that we can follow the market. If it’s more, you do more. If it’s less, we do less. And that is, I think, the big hidden trick in how we see our business.

And up to now and every day, we look forward, it’s proven to be the right strategy for us. That is why I try to tell you the three phases. We started 2013, and then we said, well, this is becoming mainstream. That is why we have now 2021 and 2022 with new cars coming up. And then I tried to make the connection into the third phase, which was always quite clear to us. For us, that was always quite clear that there is a third phase coming when the next architecture step is due. And we don’t talk about platforms. I think there is a big mistake to think that there are platforms, which must always be distinct. And watch next week’s NEXTGEN when we will tell you much more about the iNEXT that is neither a platform, this is part of bigger architecture.

And always, technological progress, every year going on, you have new technological advances. And of course, every five years, you update your architecture. And the Phase three, I was talking about, is a very natural next step in our architecture base because we would renew the architectures anyway. And as markets progress with more digital in the car, and at the same time, with more EV emphasis, this is quite natural that the next architecture will have the best technology at that time. So for us, it’s quite a natural phase, and that is not anything new. And I don’t – we still don’t think that the world is separating immediately and very quickly in two completely different phases, the combustion world and the EV world, it’s about architectures, competence overall, and it’s not only about EV, it’s much more about user interface, digital competencies, connectivity and, of course, the right drivetrain for the right customers in the world. And our current market success tells you also a bit what can be successful.
Emphasis added.

https://www.autonieuws.be/uitlaat/59...-van-bmw-group
Quote:
Exclusive: Autonieuws spoke with Oliver Zipse, CEO of BMW Group
Car news : Diesel is under pressure today. In certain countries there is talk of a ban on diesel engines within a few years. What is your opinion on the future of that passenger car drive? Will BMW continue to develop it?

O. Zipse: “While we sell our brands in 140 countries around the world, diesel is a significant part of our sales. Although the demand for diesels in the main markets for it, Europe but also Japan, has fallen by no less than 40 percent over the past five years, the demand for diesels is stabilizing and we still sell 500,000 cars with diesel engines every year. That means there is still significant demand, and as long as that demand exists, we will continue to develop and offer diesels. We really believe in diesel technology, because of the combination of low consumption and the very low emissions of the RDE 2 models that meet the latest Euro standards, both in terms of CO 2 and polluting emissions. Today we develop diesel engines that have almost no non-CO2 emissions have more. Add to this the fact that diesels have the greatest driving range and are therefore extremely suitable for frequent drivers, and you realize that we can continue with that technology for a while. Fortunately, if diesel bans are introduced in certain regions, our flexible architecture strategy allows us to quickly switch to other powertrains. That flexibility is a real asset. ”

Car news: Between all the battery-electric violence, with the iX3 and the i4 and iX coming on the market next year, you are also developing a hydrogen X5 that is expected in 2022. Do you see a future for passenger cars with a fuel cell?

O. Zipse: “In addition to battery-electric cars with large battery packs, which will already make up a third of our product range by 2025, we will indeed continue to invest in electric cars with a fuel cell that converts hydrogen into electricity. We especially see potential for that technology in the higher segments such as that of the BMW X5 and X7, where a purely battery-electric drive would result in overweight cars due to the weight of the battery pack. Especially when you know that cars in that segment often also pull trailers. A car with a fuel cell certainly makes sense there. Add to this the fact that not all regions - just think of densely populated Japan - will be infrastructure-ready just as quickly for electric cars that need to be charged on the electricity grid and it becomes clear that BMW must also offer hydrogen-powered cars. We will therefore continue to work on it, although it will take until the second half of this decade before an extensive range is available in this area. ”

Car News: Is the fact that the European Commission has not yet taken a decision on the technical standards and the introduction date of the Euro 7 standard an obstacle to the development of new combustion engines?

O. Zipse: “We know in which direction these requirements will go and are technically ready to take the next step. We are therefore continuing to develop new engine generations and are committed to continuing that development as long as there is a demand for cars with an internal combustion engine. In any case, staying at the forefront of technology is an asset and will help us stay on top. In any case, it will take many years before the market will no longer need combustion engines. As always, we adapt quickly to new standards, so no, that is not a real obstacle for us. It would only be really bad news if we stopped developing even more economical and efficient combustion engines now. ”

Car news: How do you feel about self-driving cars? Is the iX that you just presented as an electric top model and concentrate of technology ready for Level 3 autonomy?

O. Zipse: “The architecture and technical components of the iX are indeed fully ready for Level 3 autonomy where the driver no longer has to play an active role on certain routes. However, we have to take into account that we sell our cars all over the world and the legislation in this area varies quite a bit from country to country. In the United States, more is possible in this area than, for example, in Europe. Germany allows us to offer Level 3 autonomy at speeds up to 60 km / h, but it is not possible above that. Technologically we can handle more, but it may not be rolled out yet. In any case, a uniform European legislative framework would be very useful in that sense. ”

Car news: BMW has several production facilities in the United Kingdom? What are the possible consequences of a “no deal Brexit”?

O. Zipse : “We hope to get clarity soon. It could already have been there and is expected soon. At the moment we cannot comment on possible consequences, but it is clear that we prefer a trade deal to an unregulated Brexit. We do indeed have a significant footprint in the UK, with the MINI factory in Oxford, Rolls Royce in Goodwood, MINI in Swindon and BMW in Hams Hall, and we hope to keep it in the future”.
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Last edited by BMWGirlFL; 11-18-2020 at 01:40 PM..
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      11-18-2020, 11:43 AM   #2
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I like how BMW caters to ALL the markets and isn't trying to shove one type of technology (architecture) down our throats. There is so much to choose from in this brand and why I will stay with them when the day comes that going all electric makes sense.

GM
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      11-18-2020, 11:46 AM   #3
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Quote:
Originally Posted by GMCHEM83 View Post
I like how BMW caters to ALL the markets and isn't trying to shove one type of technology (architecture) down our throats. There is so much to choose from in this brand and why I will stay with them when the day comes that going all electric makes sense.

GM
Ugly grilles & they ain't shoving anything down my throat! Ever!
First Audi, then Lexus, now Bmw. Next?
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      11-18-2020, 12:26 PM   #4
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Didn't the UK pass a law that all new cars should be electric by 2030? Maybe I'm totally wrong on this but my point is that auto makers may not have much choice soon so they might as well push this avenue and innovate here.
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      11-18-2020, 12:32 PM   #5
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From 2025,Active Sound Design only will remember us the combustion engine lovely notes.
Sad,i'm so sad!!!
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      11-18-2020, 12:53 PM   #6
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Future (near future) of car is electric. Which isn't that much of a bad thing. I think they still may be able to build fun electric cars if they choose a right chassis. I hate to say this but Sometimes I have more fun driving my i8 in electric mode with its lossy electric power than my crazy M5!
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      11-18-2020, 01:13 PM   #7
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The EV is definitely the near future of the automobile. Virtually every manufacturer is in advanced R&D for at least some of their models to be EV sooner than later and the number of upstarts close to delivering new products is simply unparalleled.

BMW appears well positioned to transition into the EV market smoothly. I like their concept of building EV and ICE together because they can more quickly deliver the vehicles that are most in demand, without extensive retooling or negative impact on their workforce. I’m really looking forward to the future M offerings in EVs.
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      11-18-2020, 01:37 PM   #8
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Quote:
Originally Posted by GMCHEM83 View Post
I like how BMW caters to ALL the markets and isn't trying to shove one type of technology (architecture) down our throats. There is so much to choose from in this brand and why I will stay with them when the day comes that going all electric makes sense.

GM
I agree. They need to stop letting China dictate their designs for the rest of the world. Keep that shit in China and let the rest of the world enjoy proper car designs.
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      11-18-2020, 01:44 PM   #9
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Sure I see myself driving an EV, probably a bimmer. But I suspect I'll always have something with an ICE & MT in the garage just to enjoy the good old days of driving

Dang I'm getting old
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      11-18-2020, 03:36 PM   #10
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With all the controversy over the bugs bunny Edsel grills, how can he not discuss them in the call?
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      11-18-2020, 09:02 PM   #11
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Quote:
Originally Posted by GMCHEM83 View Post
I like how BMW caters to ALL the markets and isn't trying to shove one type of technology (architecture) down our throats. There is so much to choose from in this brand and why I will stay with them when the day comes that going all electric makes sense.

GM
It doesn't sound like they are really going all electric but rather it seems electric will just be offered as an additional option to gas engines in the future. I don't think gas engines are going away completely, and will only get more fuel efficient with time.
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      11-18-2020, 09:36 PM   #12
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Quote:
Originally Posted by SatinblkF90 View Post
It doesn't sound like they are really going all electric but rather it seems electric will just be offered as an additional option to gas engines in the future. I don't think gas engines are going away completely, and will only get more fuel efficient with time.
Gas is going away sooner than ppl may think or want. UK wont allow combustion vehicle sales after 2030. Electric or hydrogen or whatever else is the future.
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      11-18-2020, 09:40 PM   #13
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Quote:
Originally Posted by BimR View Post
Gas is going away sooner than ppl may think or want. UK wont allow combustion vehicle sales after 2030. Electric or hydrogen or whatever else is the future.
It says in the article you posted that bmws plans for the future to sell EV alongside combustion engine cars and PHEVs. If they all have to be gone by 2030 then I don't know why they are still planning in 2025 to continue developing gas engines.
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      11-18-2020, 10:51 PM   #14
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Quote:
Originally Posted by SatinblkF90 View Post
It says in the article you posted that bmws plans for the future to sell EV alongside combustion engine cars and PHEVs. If they all have to be gone by 2030 then I don't know why they are still planning in 2025 to continue developing gas engines.
I assume that some/many countries won't follow what UK is trying to do? Here is the US, I don't see how any govt will mandate all electric. Hell we have folks here trying to revive steam engines!

Kinda feel bad for car makers trying to appease everyone.
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      11-18-2020, 11:15 PM   #15
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Quote:
Originally Posted by BimR View Post
I assume that some/many countries won't follow what UK is trying to do? Here is the US, I don't see how any govt will mandate all electric. Hell we have folks here trying to revive steam engines!

Kinda feel bad for car makers trying to appease everyone.
Yep I agree. Majority of the world gas engines ain't going anywhere anytime soon. I believe it's best anyways to leave it up to consumers to choose what's best suited to them while continuing to improve c02 emissions.
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      11-19-2020, 12:40 AM   #16
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Quote:
Originally Posted by BimR View Post
Gas is going away sooner than ppl may think or want. UK wont allow combustion vehicle sales after 2030. Electric or hydrogen or whatever else is the future.
Total electric cars sold are less than 1% right now.

Electric cars NOT going to be the mainstream for many many years. That 2030 rule will get pushed back like it has been over and over again in the past.
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      11-19-2020, 07:01 PM   #17
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Maybe the US will stick with the outdated combustion concept but not the rest of the world and surely not EU. After yesterdays decisions on German Autogipfel (Car Summit) it‘s clear. Or like the ancient Romans said: alea iacta est!
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      11-19-2020, 08:23 PM   #18
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Very interesting. I've been buying BMWs for 20 years, but not sure that loyalty will translate to electric. I look forward with interest to see who does electric best.
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      11-22-2020, 06:12 PM   #19
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Quote:
Originally Posted by ghaffari46 View Post
Future (near future) of car is electric. Which isn't that much of a bad thing. I think they still may be able to build fun electric cars if they choose a right chassis. I hate to say this but Sometimes I have more fun driving my i8 in electric mode with its lossy electric power than my crazy M5!
there is nothing fun about an electric car. the noise is part of the fun. it doesnt matter how fast it is it doesnt compare.
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      11-22-2020, 06:14 PM   #20
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Quote:
Originally Posted by lonestar22 View Post
Quote:
Originally Posted by ghaffari46 View Post
Future (near future) of car is electric. Which isn't that much of a bad thing. I think they still may be able to build fun electric cars if they choose a right chassis. I hate to say this but Sometimes I have more fun driving my i8 in electric mode with its lossy electric power than my crazy M5!
there is nothing fun about an electric car. the noise is part of the fun. it doesnt matter how fast it is it doesnt compare.
Drive an i8
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      11-22-2020, 06:25 PM   #21
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Just as long as they make 'em look like an i8 and not an i3. ;P
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      11-25-2020, 01:23 PM   #22
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Quote:
O. Zipse: “The architecture and technical components of the iX are indeed fully ready for Level 3 autonomy where the driver no longer has to play an active role on certain routes. However, we have to take into account that we sell our cars all over the world and the legislation in this area varies quite a bit from country to country. In the United States, more is possible in this area than, for example, in Europe. Germany allows us to offer Level 3 autonomy at speeds up to 60 km / h, but it is not possible above that. Technologically we can handle more, but it may not be rolled out yet. In any case, a uniform European legislative framework would be very useful in that sense. ”
I'm afraid OEM future focus lies heavily on autonomous driving and I can't see that combine well with making (affordable) cars that are engaging to drive (on public roads).
I hope I'm wrong and I know it's not mutually exclusive but I feel we're already heading that way.

'The ultimate driving machine' has to become 'The ultimate machine to be driven in' or so it seems.
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