Automakers are positioning themselves into two camps when comes to their electrification strategies -- those that are building dedicated EV platforms and those that are incorporating battery-driven powertrains into revamped versions of existing architectures.
The different paths are well illustrated by the choices made by two automakers: Volkswagen Group and BMW Group.
VW Group chose to invest 7 billion euros ($8.26 billion) into the all-new, EV-only MEB architecture, banking on market growth for economies of scale. BMW Group, meanwhile, has espoused the cost- and complexity-reducing benefits of offering electric, plug-in hybrid, gasoline and diesel versions of the same car on the same platform.
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More automakers have revealed their choices in recent months. In July, for example, PSA Group announced its new Electric Vehicle Modular Platform, or eVMP, which is designed for battery sizes ranging from 60 to 100 kilowatts and will be rolled out by 2023.
While PSA calls it a new platform, the automaker admits eVMP has "extended carryover" from its EMP2 platform, which helped keep development costs to a minimum by avoiding large-scale factory retooling.
PSA CEO Carlos Tavares said during the automaker's financial results webcast in July that the cost of the eVMP would be in the "hundreds of millions" of euros, far less than the multi-billion euro cost of developing a platform from scratch.
Alliance partners Renault and Nissan are also going down the platform modification route by creating the CMF-EV architecture from its widely used Common Module Family underpinnings. CMF-EV will be first used by the Nissan Ariya electric SUV due in Europe late next year.
Electric only
| Automakers using all-new stand-alone EV underpinnings | ||
| Company | Platform name | |
|---|---|---|
| VW Group | MEB, PPE | |
| Hyundai | E-GMP | |
| Mercedes | EVA2 | |
| GM | not available | |
Source: Companies |
||
Renault displayed the platform on the Morphoz concept earlier this year. The French automaker said that using CMF-EV resulted in the Morphoz's wheels being pushed more toward the corners to incorporate a flat underfloor battery pack. A benefit from this is that it increased interior space in the concept.
GM has chosen a dedicated platform. The company announced in March a flexible new global electric architecture designed around its new Ultium batteries built in partnership with LG Chem. GM touted the platform's seemingly endless flexibility, proposing its use in SUVs, cars and pickups and commercial vehicles with battery sizes ranging from 50 to 200 kilowatt hours.
Echoing VW Group with its MEB strategy, GM said the key to its profitability was scale, partly through its own brands but also others. In April it announced it would co-develop EVs for Honda, and this week said that it would build startup Nikola's Badger electric pickup using Ultium batteries.
Using the platform first will be the Cadillac Lyriq electric SUV, due in late 2022, as well as the coming Hummer EV.
Also choosing a dedicated platform is Hyundai Motor Group. Its E-GMP will be first used on the Hyundai Ioniq 5 midsize SUV, due late next year in the U.S. The platform will be shared with sister brands Kia and Genesis.
Multiple choice
| Automakers either adapting legacy platforms to accommodate EVs or creating new, multi-energy architectures | ||
| Company | Platform name | |
|---|---|---|
| PSA | eVMP | |
| Renault-Nissan | CMF-EV | |
| BMW Group | integrated platform | |
| Jaguar Land Rover | MLA | |
Source: Companies |
||
EV market not yet big enough
BMW CEO Oliver Zipse in August continued his strong defense of the company's strategy to stick with what it calls "the power of choice" when it came to platforms. He told analysts during the company's half-year results call that building factories dedicated to a single electric platform was just too costly when EV market share in Europe was still below 10 percent.
"We are convinced if you are not able to include EV structures into your normal industrial structures, your cost base will go out of range," he said.
The time to launch an EV dedicated platform, he said, was in the second half of the decade when EVs are expected to account for more than half of the European market. "But for at least for the next six to seven years we are exactly spot on with our strategy," he added.
BMW has made the right call, said Arndt Ellinghorst, head of automotive research at investment bank Sanford C. Bernstein. "There is still a perception that BMW's flexible platform approach is a disadvantage as it compromises the BEV [battery-electric vehicle] product," he wrote in a new report. "A dedicated battery-electric platform offers some advantages in battery packaging and interior/exterior design, but a vast majority of customers either won't notice or even appreciate these differences."
The strategy "should enable BMW to deliver its 8 percent to 10 percent margin from 2022 onwards," he added.
The head of the automaker's powerful workers union disagrees with the company's strategy. "Only with our own e-architecture can we fully exploit the advantages of an electric vehicle," Manfred Schoch told Germany's Der Spiegel magazine in June. Schoch said a dedicated electric platform is needed if BMW wants to avoid being overtaken by competitors.
BMW will roll out more electric versions from its existing model families as part of its strategy, including the next-generation 7-Series flagship sedan as well as the 5-Series midsize family and BMW X1 compact crossover.
The VW ID3, which will be VW Group's first MEB-based car, has started to arrive at European showrooms. It is the beginning of plan to have 50 full-electric VW Group models available globally by 2025. Some of the ID3's platform mates are being revealed, including the ID4 and Skoda Enyaq iV compact crossovers.
Scale is key to VW Group achieving returns on the platform. To help reach a margin-making volume with MEB VW Group is signing up other automakers to use it. Ford Motor was the first to agree as part of a wider ranging tie-up. Ford's MEB-based car car will arrive in 2023.
In addition, electric vehicle startup Fisker has said it is in talks with VW Group to use MEB, although a final agreement hasn't been reached.
Other EV startups such as U.S.-based Lucid and UK electric van specialist Arrival are touting the packaging advantages of their electric-only platforms, which they say benefit from being free of any legacy engineering.
However, not all startups are sticking solely with electric power. China's Li Auto, which recently went public with a stock offering that valued it at $14 billion, has chosen a more flexible platform that can incorporate hybrids.
Said Ellinghorst: "We wonder why this is appreciated for a startup while BMW, with all its engineering experience, is facing ongoing criticism for its approach."
