Automakers are working toward building only electric vehicles in the future. The transition is already underway, and different plans for completing it are emerging. BMW said recently that its move toward EVs would not lead it to abandon “the lower market segment.”
BMW CEO Oliver Zipse made the remarks at a Bosch auto suppliers event, Reuters reported. It’s wrong for a premium automaker to leave the lower market segment, according to the brand’s boss, who added that the segment “will be the core of your business in the future.”
That’s different from Mercedes-Benz’s approach, which announced earlier this year that it would focus 75 percent of its investments on bigger and more expensive vehicles. BMW’s German rival isn’t completely abandoning the lower market segment and compact cars, but it is pulling back after the automaker admitted that it might have been too ambitious with its compact car strategy.
Mercedes plans to cut its entry-level lineup from seven models to four and has already decided to eliminate the A-Class in the US market. The company intends to rejigger its lineup into three categories: Entry Luxury, Core Luxury, and Top-End Luxury. The first electric model in the Entry Luxury segment will launch in 2024 and ride on the company’s dedicated MMA platform.
While BMW has no plans to abandon the lower market segment with its EVs, tightening emissions regulations could kill off smaller, gas-powered models in the meantime. A report from earlier this year suggested that BMW models riding on the UKL architecture could not easily accommodate new hybrid powertrains, which automakers are using to cut emissions and improve efficiency.
However, building smaller electric vehicles does come with its challenges. The amount of range an EV offers still matters to many customers as the charging infrastructure remains lacking in many areas. Smaller cars have little room for big, heavy batteries, adding even more design and packaging complexities. It will get easier to design and build the lower segment electric models and compact vehicles as batteries become more efficient (smaller, more power dense, and lighter), and the charging situation improves.