BMW Puts Electric-Car Development Into Higher Gear -- Report

Could German automaker BMW be accelerating plans for offering a variety of new battery-powered electric vehicle (EV) models? It could, according to reports in the German press and guidance from company insiders.

Harald Krueger, BMW's chief executive, is expected to unveil a revised EV product development strategy toward the end of the month, perhaps coinciding with the biennial global automotive salon in Paris, according to the business newspaper Handelsblatt.

Possible new EVs from BMW include a Mini, a 3 Series and an X4 SUV, on top of a new version of the current battery-powered i3 in 2018. BMW intends to broaden its EV portfolio as a response to a wave of new competitors coming from Tesla (TSLA) , General Motors  (GM) , Volkswagen  (VLKAY) and Daimler (DDAIF) .

The automaker, one of the top builders of premium and luxury models, has been pleasantly surprised by stronger-than-expected sales of plug-in gas-electric hybrid versions of its cars, such as the X5, say insiders.

Reports from earlier this summer speculated that BMW might be emphasizing a push toward driverless technology at the expense of developing more EVs, particularly in light of relatively weak sales last year of only 25,000 i3s. Klaus Froelich, head of research and development, told Reuters he had revamped R&D to increase emphasis on self-driving technology, raising the number of software engineers to 50% of the 30,000-member R&D staff from the current 20%.

BMW is one of the most profitable carmakers worldwide, having delivered an 8% return on sales for more than six straight years. With the prospect of heavy investments looking in alternative propulsion like EVs as well as driverless technology, the company's management wants to make sure it doesn't spoil that record.

Battery technology is changing as they become lighter, cheaper and more powerful, thereby delivering more range between charges. Batteries such as those used in Tesla's Model S are relatively heavy and have been fabricated long, wide and relatively thin, to be located under the cabin, which lowers the center of gravity to improve handling. The latest EV models, such as Chevrolet's Bolt due later this year, borrow the packaging concept.

As batteries and body structures get lighter, it may be possible to try alternative packaging designs. BMW has been experimenting with carbon fiber parts and body panels to save weight and is moving toward lighter allows of steel and aluminum as well.

Earlier this summer BMW lost a number of senior engineers on the electric-vehicle staff, notably Carsten Breitfeld, the former head of the i8 program, who left for Chinese electric vehicle maker Future Mobility Corporation. In an interview with Reuters, Breitfeld described his frustration getting approvals for projects at a large automaker, compared with a startup, where only a relatively few people must agree.

"At the end of the day I get the impression that the traditional car companies, not only BMW, will not really be able to follow the pace and do the big steps which will be needed," he said.

Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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