BMW Sees European Electric Car Demand Holding Up as China Pulls Back

(Bloomberg) -- BMW AG is seeing stronger demand for its electric vehicles in Europe than it expected, helping offset a decline in orders in its biggest market China, production chief Milan Nedeljkovic said Friday. 

“We expected at the start of the year that orders in Europe will decline, but it developed in the opposite way,” Nedeljkovic said to reporters during a tour of BMW’s German plant in Dingolfing, where the carmaker started serial production of the i5 electric sedan.

Europe posted an 11th consecutive month of growth in passenger car sales in June, led by a 55% surge in orders for EVs, which outpaced diesel sales for the first time in the European Union. In the same month, overall car sales declined in China as the country’s economic recovery stumbled. 

Orders for new BMW cars are currently declining in China, as expected, Nedeljkovic said. But US demand for its models is growing. In Europe, uptake of fully electric vehicles drove order growth, while demand for combustion-engine cars was flat, he added.

BMW wants electric cars to account for 15% of its deliveries this year and expects fully electric models to account for half of total sales well ahead of 2030. 

The 340-horsepower i5 can drive 580 kilometers (360 miles) on a charge and is the brand’s third fully electric sedan variant after the flagship i7 and the i4 coupé. BMW also offers three battery-powered SUVs with the iX1, iX3 and iX.

Going forward, BMW is betting that its “Neue Klasse” electric vehicle platform, due to arrive around 2025, will accelerate sales. With the new EV platform, the car maker aims to cut battery costs by half and increase range and charging speed 30% compared to current models.

To help finance the shift to electric vehicles, luxury-car makers like Mercedes, BMW and Audi are trying to sell more of their most expensive models and offer pure-electric variants at higher prices. With Tesla Inc.’s price cuts, downward price pressures could also increase for BMW’s electric vehicle offerings. However, Nedeljkovic said BMW doesn’t plan to lower prices for its EVs. 

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