BMW AG is scrapping stick shifts on some models in the U.S., such as the 2-Series Coupe, as the German carmaker streamlines options for customers to stabilize profitability amid higher spending and lower returns from electric cars.
With a wide array of choices, such as more than 100 steering wheels and engine configurations, BMW is looking to cull little-used options after spending on research and development doubled from 2008 to about 5 billion euros ($5.7 billion) last year, Chief Financial Officer Nicolas Peter said Wednesday. The move is part of efforts to offset ramp-up costs for technology such as battery-powered vehicles.
“Our biggest lever is to reduce complexity and lower the amount of choices there are,” Peter told journalists at the company’s headquarters in Munich. “Profitability on electric cars is definitely challenging.”
With the auto industry bracing for a shift to an era of electric robo-taxis, traditional carmakers are facing tough choices on how to allocate resources as any payoff from new technologies could still be years away. To keep a lid on electric-model costs with demand still unpredictable, BMW will add battery packs to existing vehicles — including an electric variant of the Mini in 2019 — rather than invest in more autos like the battery-powered i3.
“Our electrified cars are profitable today, but it’s less than vehicles with combustion engines,” Peter said.