BMW can’t be accused of dragging its feet with electrification. An early pioneer with the i3 and i8, after a hiatus the company now has a huge range of pure BEVs, and recently launched the first salvo in its Neue Klasse next electric generation in the shape of the iX3. But BMW also isn’t putting all its eggs in one basket. Chairman Oliver Zipse explains how the company is keeping its strategy flexible, and why that could be a more effective approach to emissions reduction.
BMW’s Multi-Drivetrain Strategy
BMW has recently announced its iX5 Hydrogen prototype series will become a production run for 2028. This will mean that the new X5 will be offered with five different powertrains – regular gasoline internal combustion, diesel, plug-in hybrid, fully electric and hydrogen. As an example of hedging one’s bets, this is comprehensive. Only a Wankel rotary engine and steam power would complete the picture.
“We always said we have a flexible strategy,” says Zipse. “Our core task is to respond to markets.” The BMW Chairman considers it naïve to assume that the market will evolve as expected. “You must have planning, but you can’t assume you know five years ahead what will happen. We have high adaptability.” He cites the resurgence of plug-in hybrids, which wasn’t expected three years previously. “But we prepared for it.” Zipse also admits that while BEVs haven’t been selling as much as foreseen, they’re still almost 20% higher than 2024 and BMW was ready for that, as well as the surprising popularity of its M version cars in the first half of 2025. “You must prepare for different things.”
However, Zipse doesn’t agree with legislation intended to end the life of drivetrains that are still popular in the market, asking: “Why do you have to, on purpose, end something that you already have? If the market says it’s over, stop with it. But if the market says it’s still a viable product, then you spend money to keep that updated.” For this reason, BMW has already updated its internal combustion engines for Euro 7 emissions standards, despite that not being due to come into force until 2027. “We have BEVs and we’re outselling the competition, but at the same time, we are selling plug in hybrids and diesels. If you manage complexity, you safeguard your company.”
No One Technology Fits All For BMW
Focusing on a single technology makes no sense to Zipse. He argues that this is bound to lead to shrinking sales. “If you’re an incumbent with a measurable market size, this is the worst mistake you can make,” he says. Instead, BMW has fostered its variable approach. “We have singular platforms, like the iX3’s electric-only one. But at the same time, we have flexible platforms. This depends on the size of the car. Everything below and including the mid segment, such as the three series, is dedicated platforms. Everything above – five series, x5, or seven – is flexible. Smaller cars have less space inside to be flexible, but with larger cars it costs you almost nothing to stay flexible – maybe 10 kilometers range. Who cares about 10 kilometers range? There’s a disadvantage, but it’s so minor. Customers couldn’t care less, so we do both at the same time, but it depends on the size of the car and the segment you’re in.”
Focusing on the drivetrain alone also limits the decarbonization potential. “Every drivetrain can contribute to CO2 reduction,” says Zipse, arguing against subsidies to encourage public adoption of one drivetrain over another. “If you scale it up, it’s unaffordable, and you have to stop, like we’ve done in Germany, because there was not enough money. Tax incentives and subsidizing power are completely different.” Zipse considers these the best ways to make costs more favorable for drivers. “But no buying subsidy, because you destroy the market, and once you take the subsidies out, you get another distortion of the market.”
CO2 targets are still a good idea, but Zipse argues that there needs to be greater flexibility over how these are achieved. “Today’s regulation is only for tail pipe emissions,” he argues. “Tail pipe is a very simple, inefficient solution, especially when you set an artificial zero date, which causes unpredictable market effects,” says Zipse. “Markets don’t create a last day you can buy combustion. You still might have a residual value of 20-25%.” He argues that up to a decade of sales value could be lost, primarily because it’s easier to explain CO2 reduction via eliminating tailpipe emissions to the public.
BMW’s Total Lifecycle Approach
Instead, Zipse suggests that BMW’s focus on the whole car’s lifecycle will be more effective for real emissions reduction, including supply chain CO2 contributions and the impact of recycling at the end of a vehice’s life. “Our proposal is to replace the electric-only approach with an open technology one,” he says. “Everything counts, so long as it reduces CO2. That can be a normal combustion engine, plug-in hybrid, REX [range extender]. Electric cars are the most important factors, but everything that can contribute to bringing down CO2 should be included. That means don’t put an end date.”
As an example of the how the rest of the world hasn’t bought into setting deadlines like this, Zipse cites how EU combustion engine emissions regulations over the last 40 years have been globally adopted. Often, the delay has been five years in some countries, but universally these standards have proliferated internationally. With the total ban on combustion, however, things have been different. “This time no one followed,” says Zipse. “We’re the only ones in the world that put a complete ban on one technology. If we keep that, people will simply hold onto their old cars for much longer. No replacement, no innovation in the whole industry anymore. Then, of course, the battery technology is dominated by East Asian including China players. There’s no substantial industry in Europe. You must have some kind of localization requirement if you want to sell electric cars. You should get an advantage if you produce that battery here, if you’re Chinese or Korean or Japanese.” This makes the UK’s new Electric Car Grant, which has a carbon footprint element, look like a well thought out strategy.
However, the UK still has a hard 2035 cutoff for combustion like the EU. Zipse considers this even counterproductive compared to an incentive strategy focused on total lifecycle CO2. “It’s the most efficient and fastest way to bring down CO2,” he concludes. “The Chinese call that a soft landing. You bring emissions down by 80% much faster than before.” The last 10 or 20% won’t change so much if you get to the 80% reduction faster. “So that’s BMW’s proposal: a new regime for CO2 reduction, and we try to put that into all political avenues to make it a convincing argument. We are finding more stakeholders who understand the advantage of that approach, and it won’t destroy the industry completely.”
