By BMW AG's high standards, 2016 wasn't great. While it was a record year in terms of sales, the profit margin of its car business was the lowest since 2010 at 8.9 percent. The company missed analysts' estimates, and the share price dropped. So CEO Harald Krueger's decision to reaffirm the firm's "Automated, Connected, Electrified and Shared" strategy raised more than a few questions: It was the reason for the drop in profitability, after all.
The hyped-up electric vehicle revolution, driven by a fear of being left behind and overzealous regulation, may be forcing car companies to make expensive mistakes. The modern electric vehicle is conceptually inconsistent with how people want to use cars, and in many countries the environmental effect of switching to EVs is negligible.
BMW wants electric vehicles to make up 15 to 25 percent of its sales by 2025. But the Bavarian firm has only sold 70,000 i-series plugin cars since 2013. That didn't go a long way toward covering the €4 billion ($4.3 billion) research and development cost.
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