BMW AG said operating return for its automotive business is expected to decline this year, as the fallout from the war in Ukraine affects supply chains and weighs on the global economy.
Returns from automaking would be between 7 percent and 9 percent, the company said yesterday.
That is down from more than 10 percent last year.
Photo: Reuters
The automaker said it expects auto deliveries to remain at last year’s levels of about 2.5 million as the ongoing violence in Ukraine hurts production.
In the absence of the war, BMW said it would have targeted 8 to 10 percent profitability for its automotive business.
The company also said it does not see the semiconductor shortage improving until the second half of the year, a problem that has idled production lines for the industry around the globe.
BMW said it expects 15 fully electric models to be in production this year, including the rollout of the new i7 sedan.
The company also said it is developing new battery technology and could deliver early on its target of having fully battery-powered vehicles making up half its global sales by 2030.
BMW previously said that it expects sales of fully electric vehicles (EVs) to double this year, as the company’s i4 coupe and iX sports utility vehicle go on sale in major markets.
Overall earnings for BMW, including its finance and motorcycle segments, should increase significantly this year, the company said, helped by the full consolidation of its Chinese joint venture BMW Brilliance Automotive Ltd (華晨寶馬).
Separately, Mercedes-Benz Group AG opened a battery factory in Alabama months before the luxury automaker starts assembling electric sports utility vehicles nearby in an effort to challenge Tesla Inc in the US EV market.
The German manufacturer is to produce lithium-ion batteries at the new Bibb County plant, and start making all-electric EQS and EQE sport utility models at its existing factory in Tuscaloosa in the coming months.
Mercedes also announced a partnership with Chinese-owned battery company Envision AESC (遠景動力), which it said would set up a US cell facility that would supply modules by the middle of the decade.
“We’re on a very fast track to turn over a whole industrial footprint toward EVs,” Mercedes chief executive officer Ola Kallenius told Bloomberg Television.
He said the automaker “can’t make enough” of its newest electric models, which include the flagship EQS sedan introduced last year.
Mercedes has budgeted 40 billion euros (US$43.8 billion) this decade for electrifying its lineup to defend its position in the premium auto market.
The company said it has invested US$1 billion in Alabama between the battery plant, logistic centers and the production lines it has upgraded to make EVs.
The Tuscaloosa factory would be able to flex production between combustion engine, plug-in hybrid and fully electric drivetrains.
“We’re going to see, over the next two to three years, the electric share of that production just go up and up,” Kallenius said.
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