What is the story of electrification in BMW?
Electrification became a serious option in the US, when fuel cell electric vehicles and battery electric vehicles were established as zero-emission in 2007. We started experimenting with electric cars before that in the 1972 olympics when our cars worked as a pace vehicle for marathon runners. Since then, we have experienced a steep increase in the performance of batteries, right up to the 2000s when it all started becoming more tangible. We were among the firsts to carry these innovations into the market with our test fleet of battery powered Minis in 2008 and then the BMW i3 in 2013.
Do you have a strategy to mitigate CO2 emissions coming from your supply chain?
We are making a premium product and we want to be as safe as possible, so we are exploring new strategies to obtain materials from clean mining.
To make sure battery materials are extracted cleanly, we have been sourcing lithium and cobalt directly from the source. Cobalt for example is sourced from hand-picked suppliers in Australia and Morocco. In addition, we have agreements with all of our battery suppliers, either from Korea, China or Europe; it does not matter where they are producing, if they are suppliers for BMW, we demand 100% renewable energy sources.
In this way, the big footprint that the production of the battery entails is significantly reduced.
The next generation of batteries, which will be used in 2025, will enjoy significant improvements. They will be more efficient in terms of performance s. cost and they will have a radically improved CO2 footprint; this will be achieved through a combination of renewable energy sources and usage of secondary material. As for the latter, we will use materials from production residue to enter the circular economy in the field of the battery.
How important is government policy for the EV market to grow and thrive?
It is rather easy to ban a particular technology - what is complicated is to allocate tax payers’ money to support a determinate policy. For the EV industry to thrive, policies have to start focusing on infrastructure. To an extent, we are part of the infrastructure ourselves, as with Ionity (a consortium of which we are part of with other car makers) we bring charging to the motorways - but this is not enough. We cannot do this in every city and borough council, and an overarching entity needs to provide the planning and location for charging stations, which requires both policy and capital. We will deliver at the supply side; there will be fully electric BMWs for each and every segment in the market. But customers deciding for an EV require confidence in the fact that they will be able to use their cars, and such confidence needs infrastructure. If the customer knows they can charge at home, work and on the public roads, they will respond to the incentives, otherwise, they will not. Only policy can secure this vital confidence to become a certainty.
You have recently commenced in-house production of fuel cells required for the BMW iX5 hydrogen; what is the future for hydrogen in the industry?
In our view, hydrogen is an important option for the future. The main advantage of hydrogen is that you can store energy with a low need of space, the fueling goes faster, and the energy density is higher. There are also considerable challenges in terms of the energy needed to transform energy into hydrogen and then into electricity. We see hydrogen fuel cell technology as a good alternative for heavy cars that are driven for long distances or may be towing substantial weight. Needs of customers will make it more convenient to opt for one or the other, and we will offer both.
Are you optimistic about a successful green transition at a wider scale?
Since we started 2 years ago to tell our suppliers that we needed less CO2, we have been seeing more and more new ideas and offers to bring down the climate footprint; this is a sign of how fast things are changing. We are seeing advancements in the steel industry, in the plastic sector, in alternatives to leather - in everything and anything that is vehicle-related. Also, The uptake of EVs today is much higher than we thought it would be 2 years ago. There is a lot happening, many encouraging signs, and I am very optimistic.
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