BMW bullish on BEV market

THE message from overseas business papers is grim: after a brief goldrush period, it appears that market sentiment towards battery electric vehicles (BEV) is not as shiny as some OEMs might have hoped.

According to reports from the Financial Times citing data from HSBC, demand from early adopters is almost entirely satisfied, sales growth has slowed and Teslas are being parked on grass.

Supply constraints, which kept demand strong in the ‘chipageddon’ era, also appear to be over for most, with Hyundai’s local arm recently cleaving up to $12,000 off the RRP of its 2023 Ioniq 6 to clear the deck ahead of the arrival of the 2024 range.

But are these indicators of an EV market well and truly coming off the boil? According to BMW Group Australia, definitely not. 

BMW is pushing harder on the BEV button than ever, with the arrival of the i5 boosting the brand’s local portfolio to 12 pure-electric models. It is not stopping there either, with plans to put three more BEVs – including the new iX2 small coupe-SUV – into Aussie showrooms by the middle of 2024, for a total of 15.

Crucially, six of them will exist below the $89,332 Luxury Car Tax (LCT) threshold which also unlocks Fringe Benefits Tax (FBT) savings for company car and novated lease drivers.

The G60 5 Series has also signalled a profound shift in strategy, being the first new-generation BMW model to launch in Australia with more electric variants than combustion-powered ones.

According to BMW Australia head of product planning Brendan Michel, the company expects demand for its swelling BEV portfolio to stay strong

“I can’t speak for other markets and whether they’re seeing it start to plateau, but we’ve seen the national BEV market triple so far, year-to-date,” Mr Michel said to GoAuto following the recent G60 5 Series launch in Melbourne..

“We’ve also seen the government announce the fringe benefits tax incentive for BEVs below the Luxury Car Tax Threshold, so that’s something we’ve picked up and ran with very, very hard. We’re planning to have six BEVs below that LCT threshold, which next year we’re expecting a big shift in our mix towards BEVs. 

“I can’t speak for 2025 and beyond, but we expect to see big growth in the short-term.”

To drive that growth, Mr Michel said a strategy of achieving cost parity with combustion options is important.

“The way we’ve attacked our BEV pricing in Australia is that we’ve priced it within our own internal combustion portfolio. So there’s not a big surcharge to go from a petrol or diesel into a BEV from a BMW point of view – you can get an iX3 BEV for the price of an X3 30d, for example,” he explained.

“We’ve done our best to make that transition and take the pricing equation out of it to make that step easier for our customers.”

BMW Australia has had a good year in the BEV space, selling 1869 of them across its line-up to the end of September – not including plug-in hybrids – with the iX, iX1 and iX3 doing most of the heavy lifting.

That puts BMW ahead of all-electric rival Polestar for the same period (1789 sales), though behind compatriot Mercedes-Benz’s BEV tally of 2022 cars.

But what of the overall market? While BEV sales have more than tripled in year-to-date numbers (23,869 sales to the end of October 2022, 71,800 for the same period this year), the rate of growth has slowed.

That much should be no surprise – with last year’s growth rate being just shy of a whopping 500 per cent, it is not hard to see why that growth could not be sustained – but with this year’s BEV sales growth being just over 200 per cent the graph is definitely not as steep as it once was.

Even so, while other markets might be seeing plateauing demand for BEVs, Australia is still enjoying something of a boom for now.

From the consumer’s perspective that’s arguably a win, with Australian supply likely to benefit as a result.