Munich Shortly before the start of the IAA auto show, BMW is going on the eco-offensive. By 2030, the automaker’s emissions are expected to drop by 40 percent, and half of all materials are to be recycled. The core of the plan is a strong increase in electromobility. In order to be able to build enough electric cars, BMW intends to buy almost twice as many battery cells as previously planned, with around 22 billion euros. “That is extremely demanding – but this is the only way to achieve effective climate protection,” says CEO Oliver Zipse in an interview with Handelsblatt. Only those who have a comprehensive concept for reducing emissions will survive in the auto industry.
Zipses climate offensive stands for the attempt of the auto industry to find support in politics and society. Volkswagen and Daimler are also promising to cut their emissions before the start of the IAA. That is not enough for environmental activists, they announce massive protests in the vicinity of the auto show. Greenpeace and Deutsche Umwelthilfe are also threatening legal action if the car manufacturers do not commit themselves in writing to phase out combustion technology by 2030. BMW boss Oliver Zipse rejects this.
BMW is a pioneer in the fight against climate change. “The allegations made against us are therefore incomprehensible to us, and accordingly we will not sign the required declaration,” said Zipse the Handelsblatt. Daimler also rejects the ultimatum of the environmentalists, Volkswagen wants to examine it first.
Read the full interview here:
Mr. Zipse, let’s take a look at the year 2030. The auto industry has changed the drive, the majority of new cars are electric. Will BMW then still be on the market as an independent company? Definitely yes – and extremely successful. We have a clear vision of the future, in which electromobility plays a central role. In addition, there are the changing wishes of our customers, the requirements of politics, the design of the infrastructure and technological progress. And we are convinced that we have the right business model for this complex world.
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What does your future depend on above all? The currency of the future is the ability to reduce CO2 – over the entire life cycle of the vehicles. This will be dominant from the customer’s point of view, from the point of view of politics and from the point of view of investors. That is why our main topic at the IAA Mobility is comprehensive emission reduction. Directly connected with this is the question of circularity. We will present a vision vehicle that is made from 100 percent secondary material.
A “Bio-BMW”? That doesn’t do justice to the technological complexity that lies behind it. It’s about a vehicle for the circular economy. Humanity extracts 100 billion tons of raw materials from this planet every year. We ask: will a car still have to consist of 70 to 80 percent primary raw materials in the future? Or can we find answers on how these raw materials can be reused to a large extent?
At the same time, you have to reduce greenhouse gases – the two go hand in hand. Climate protection is not just about reducing CO2 on the road. It goes through manufacture and the entire supply chain right through to the use phase of the car. We will increase our efforts and aim to reduce greenhouse gas emissions by 40 percent per vehicle across all of these dimensions by 2030. That is extremely demanding – but this is the only way to ensure effective climate protection.
Vita Oliver Zipse
So a knockout criterion in the auto industry? Absolutely. Because that is what the customer’s acceptance of a company depends on. Anyone who builds electric cars, but ignores the rest, opens a flank. The capital market is now also evaluating entrepreneurial activity in terms of sustainability. That is why we have integrated the annual report and the sustainability report, for example. It is very important to us to combine sustainability with verifiability and transparency.
“We will not sign the required declaration”
Not everyone sees it that way. Greenpeace and Deutsche Umwelthilfe are preparing a lawsuit against BMW. The accusation: You are not doing enough to combat climate change and are supposed to sign a declaration to do more. We are pioneers in our industry when it comes to sustainability and the fight against climate change. We have just tightened our own goal of reducing CO2 significantly – 40 percent CO2 savings by 2030 across all phases of automotive life – and have committed ourselves to a clear course in order to meet the 1.5 degree target. We are thus part of the United Nations’ international “Race to Zero” initiative. The allegations made against us are therefore incomprehensible to us, and accordingly we will not sign the required declaration.
The criticism will continue to accompany you. Who has the best chance in the automotive industry in the future? The one who combines end-to-end sustainability with a profitable growth story. That doesn’t work with simple answers, but includes, for example, all drives, i.e. pure electric vehicles, hybrids and a technological advancement of the combustion engine. Everyone will have their place in different countries and segments. This also applies to the fuel cell.
Hydrogen is hardly efficient for use in cars, so if you compare the entire life cycle – including the energy-intensive production of the high-voltage battery in electric cars – the picture is quickly put into perspective. And the faster politicians want to get people to switch to electric drives, the more important it is to have a second good alternative.
But it remains a niche market, and many might see it that way. However, we are convinced that with the use of hydrogen we can provide pragmatic answers to a complex problem. That is why we plan to bring a vehicle to customers in the second half of the decade. Thanks to the fast refueling process, hydrogen vehicles enable the advantages of electric drives such as high dynamics, silent driving and zero emissions to be combined with the usual usage behavior. And hydrogen is the only way to store sustainably generated energy and make it usable. We see market opportunities in Europe and Asia as well as in the USA in the medium term.
“We grew faster than Tesla”
VW boss Herbert Diess is clearly giving the electric car the right of way – everyone has to find their own way. We are absolutely convinced of our strategy. And we don’t believe that supposedly simple solutions are the right answer to the challenges of our industry.
You have to produce as simply as possible. In 2025 you will go with the “New Class” on a standard platform that is geared towards electromobility. And with the New Class we will see another big leap in terms of digitization, electrification and sustainability. However, the major costs of this industry are in the components – and also in the technical complexity. You have to distribute them in large numbers over the range of models, if possible, in order to use the economies of scale optimally. Take the fifth generation of our batteries: We are rolling them out in all models, in the hybrids and the electric models.
Electric hopefuls BMW i4
The automaker wants to attack Tesla with new models.
(Photo: LAETITITA VANCON / The New York Ti)
Isn’t that exactly the Tesla success story? They have specialized in electromobility and thus conquered a market, and they have a high market share in their segment. For us, however, the global market is the benchmark. And overall, we grew faster than Tesla in absolute numbers in the first half of the year.
On the other hand, Tesla is better in terms of connectivity, the cars are fully networked. Read the comparison tests in the trade press, as BMW regularly comes in first. We have the largest fleet of updateable vehicles in the world, 2.5 million cars. When it comes to connectivity, nobody is fooling us – your impression is not true.
Our impression is that a three-year-old BMW cannot compete with a three-year-old Tesla in terms of connectivity, but this does not apply to the current generation of our vehicles. With our “Operating System 7” we brought our updateable system onto the market in 2018, with the “iX” the successor version is already starting, which processes a data volume that is twenty times higher than before.
Why is Tesla rated twelve times as high as BMW by the stock exchange? There is currently an oversupply of financial resources on the capital market, and this is looking for investment opportunities – including speculative ones. In the eyes of the rating agencies, for example, BMW is rated much better than Tesla. We do believe that given our robust business model, our share price is undervalued going forward. Also because we have an answer to questions about sustainability.
Nevertheless, Tesla has so far been regarded as the benchmark for electromobility. The company also has good battery technology, no question about it. But I prefer to talk about BMW than about competitors.
After the chips, the battery cells could run out. Have you ordered enough from your suppliers? We even added more and almost doubled our volume: This year we increased our purchasing volume from our suppliers from twelve to over 22 billion euros. This applies to electric models whose production will begin by 2024.
“When it comes to battery cells, we don’t buy anything off the shelf”
Wouldn’t it have been better to produce the battery cells ourselves? Today we feel confirmed that we did not enter the market as a producer. If you get on board yourself, you commit to one technology – but we have already brought two new generations into series production since the “i3” was launched. Every new generation that we develop is awarded in competition, and there is a very robust supplier market for battery cells, we do not see any monopoly or oligopoly formation. So we don’t expect any bottlenecks.
Still, you would have the technology in your own hands; we have it in our hands today. When it comes to battery cells, we don’t buy anything off the shelf. Cell chemistry and format are tailored precisely to our requirements; we define the requirements for performance, longevity and costs. We specify the criteria in our research center and then pass them on to our suppliers. In simplified terms, it can be compared with gearboxes: We are the benchmark in this area – but we don’t manufacture them ourselves. We develop them together with suppliers, and there they are manufactured exactly according to our requirements.
With the solid-state battery, you are taking a risk. In the spring you massively increased your stake in Solid Power, because we are convinced that Solid Power is best positioned for this technology. The solid-state battery has the potential to become a game changer because it can deliver superior performance. However, it doesn’t come overnight. We will introduce a demonstrator by 2025. But there are still a few issues to be solved for industrialization. For example the temperature: Cars have to work at minus forty to plus seventy degrees. Solid matter technology still has to develop. The costs also have to go down.
Digitization will also be decisive for your success. With Google and Tencent, very large tech companies are pushing their software into cars – they want control. Can you keep up with that? The software in a car is too complex for that. None of the companies mentioned provide you with safety-critical systems for steering, brakes and drive. However, we work closely with Google, Apple and Tencent in the areas of infotainment, depending on the world region. We are also open to partnerships there because customers have very different expectations from region to region. However, we retain sovereignty over the overall integration and are ultimately responsible for ensuring that all systems harmonize with one another. And of course for ensuring that the customer experience matches a BMW.
What do you want to offer customers? We want your digital world to become one with the car. If you are planning a trip at home, the route from your smartphone goes straight to your car today. The new “iX” opens when you approach the car with your iPhone. Technology should make things easy – and not distract or annoy people. The distraction in the car is now one of the most common causes of accidents. That is why you will find the screens in our cars at eye level, for example, so that your attention stays on the road.
Mr. Zipse, thank you very much for the interview.
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