BMW Aiming To Save $2.4 Billion Annually For EV Expansion

Like Mercedes-Benz, BMW has confirmed that it will look to slash costs in an effort to raise money for its shift towards electrification.

At the Frankfurt Motor Show, BMW head of purchasing Markus Duesmann says that the company wants to save about 5 per cent on spending on car parts, a bill which typically costs around 40 billion euros annually. It will specifically look to cut the costs of transmission components and other parts to save about 2 billion euros ($2.4 billion) each year, Autonews reports.

Mercedes recently said that it intends on saving about $4.8 billion annually to fund its electric vehicle push and for the same reasons as BMW. Both carmakers admit that there are weaker profit margins on hybrid and all-electric vehicles but believe cost cutting will be an important measure in ensuring EVs reach the market at an acceptably rapid rate.

“The change in the industry that looms large is significant, it's coming and there's no longer the question of when -- it's now. The number of balls we have to keep in the air is huge,” Duesmann said.

Beyond its money saving measures, BMW says it is expanding its range of high-end models with the 8-Series and X7 SUV as a way to counteract the pressure EVs will place on profitability.