BMW expects to hit 50% all-electric sales target 'well ahead' of 2030

BERLIN -- BMW said it expects over 50 percent of its vehicle sales to be all-electric models well ahead of its 2030 target.

By 2025, a fourth of sales will be all-electric, the automaker said, rising to a third by 2026 -- an ambitious leap from the 1-in-11 ratio seen last year.

After doubling sales of battery-only powered BMW and Mini brand cars last year, BMW said sales of full-electric vehicles will likely account for 15 percent of total deliveries this year, up from 9 percent.

BMW expects full-electric models to account for at least 20 percent of total sales by 2024 and 50 percent "well ahead of 2030."

The automaker on Wednesday confirmed preliminary results for 2022 that were released last week, including an 8.6 percent margin in the autos business on earnings before interest and tax of 10.6 billion euros ($11.37 billion) and cash flow of 11.1 billion euros.

BMW forecasts an 8 percent to 10 percent margin for its autos segment in 2023, up from last year's 7 percent to 9 percent target, as sales of its most expensive vehicles such as the 7 Series offset weaker pricing for entry-level luxury models.

The company expects stable demand in premium markets in 2023 despite inflation and rising interest rates.

BMW said global deliveries will likely increase slightly after dropping 4.8 percent last year due to supply-chain disruptions, although it expects global markets to cool. It indicated that prices for new and used cars will settle after increases in 2022.

Still, BMW expects growth in the "mid-double digits" percentage range for its 7-Series and Rolls-Royce models

"Our order books are very high still after high demand last year, which will will carry us through the next couple of months,” CEO Oliver Zipse said in an interview with Bloomberg Television. "We currently have one of the youngest product portfolios in the industry. That gives us a lot of pricing power."

The company forecasts a slight decrease in registrations in Europe. It said order books were becoming less full after reaching exceptionally high levels, particularly in Europe, in late 2022, when shortages and logistics bottlenecks dampened deliveries.

BMW finance chief Nicolas Peter said he expects energy and chip supply to stabilize but higher costs for materials and logistics will continue to weigh on profits this year. BMW faced an additional 2.5 billion euros ($2.7 billion) headwind last year from the surge in prices.

Still, the company said it planned to keep prices stable, after years of dealing with rising costs by passing them on to customers.

Zipse said he could also envision a hydrogen-powered vehicle going into production by mid-decade.

Key to making that happen is an expansion of the hydrogen fuelling network, which was mainly in the hands of the heavy vehicle transport industry.

"We see hydrogen-electric vehicles as a meaningful complement to e-mobility, even with something of a time lag," Zipse told a news conference dedicated to the company's annual results.

BMW is one of the most prominent advocates among automakers of hydrogen fuel cell technology as a worthwhile option alongside battery-powered cars.

The BMW iX5 Hydrogen test vehicle, with a range of 500 km (310 miles) and an ability to refuel in three to four minutes, was being tested in various countries, BMW said.

Zipse said BMW will make direct sales to customers a key part of its future sales model and plans to sell the BMW brand in Europe directly from 2026 onwards.

The company had already tested the so-called agency sales model as a pilot project in South Africa and in China for the Mini, and would start direct Mini sales in Europe next year, Zipse said.

Reuters and Bloomberg contributed to this report