BMW To Remain Committed To The Entry-Level And Compact Car Segment

The automaker is working to build electric-only vehicles in the future. The transition is already underway, and various plans to complete it are emerging. BMW said recently that its move towards EVs will not see it leaving the “lower segment of the market.”

BMW CEO Oliver Zipse made the remarks at a Bosch auto supplier event, Reuters reported. It would be wrong for premium automakers to abandon lower market segments, according to the brand’s boss, who added that these segments “will be at the core of your future business.”

That differs from the approach of Mercedes-Benz, which announced earlier this year that it would focus 75 percent of its investment on larger, more expensive vehicles. German rival BMW did not completely abandon lower market segments and compact cars, but pulled back after the automaker acknowledged that it might be too ambitious with its compact car strategy.

Mercedes plans to slash its entry-level lineup from seven models to four and has decided to eliminate the A-Class in the US market. The company intends to change its lineup into three categories: Entry Luxury, Core Luxury, and Top-End Luxury. The first electric model in the Entry Luxury segment will launch in 2024 and use the company’s dedicated MMA platform.

While BMW has no plans to abandon lower-end market segments with its EVs, tightening emissions regulations could turn off smaller gas-powered models temporarily. A report from earlier this year indicated that BMW models using the UKL architecture could not easily accommodate the new hybrid powertrain, which the automaker is using to reduce emissions and increase efficiency.

However, building a smaller electric vehicle does have its challenges. The amount of coverage EVs offer is still important to many customers as charging infrastructure is lacking in many areas. Smaller cars have less room for large, heavy batteries, adding more design and packaging complexity. It will be easier to design and build low-end electric models and compact vehicles as batteries become more efficient (smaller, more power-dense and lighter), and charging situations improve.

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