Because of ever more stringent limitations on fuel consumption and especially polluting emissions, BMW set up a new low-emission brand with huge costs but long-term profits.
Every single automaker – or at least those who compete on a global level are under a round the clock race to reach new limits on the CO2 emissions across the entire line-up in Europe, Asia and the US.
BMW, the world’s largest premium brand, has taken an interesting road in achieving that – after years ago practiced a sustainable growth policy – each new engine was cleaner and more fuel efficient without sacrificing anything in terms of power.
Now, the German automaker has setup the “i” brand, which so far has been selling the all electric i3 city car and prepares to launch in August the sales of a plug-in sports car that tops the range – the i8.
“It’s taking huge amounts of R&D (spending) for materials, structures and power-trains. I think at the moment it’s (the “i” program) about being a mobile test bed to prove electrification techniques which are being gradually developed and honed. But what is really important, the “i” vehicles are turning into fantastic brand builders for BMW,” says analyst Tim Urquhart from IHS Automotive.
While analysts think BMW is losing money on the “i” program, and the company says it’s already profiting, the truth could be somewhere in the middle, as just for setting up the “shop”, BMW spent around $2 billion. Still, many agree that BMW seems to follow Tesla’s approach, building a business from scratch around the new principles of e-mobility, which could bring huge profits for the brand in the long-run.