A decade ago Tesla was an automotive outlier with only one model and preaching a zero emissions message your average car buyer wasn’t yet ready to hear. But in 2023, those car buyers and other automakers are taking Tesla very seriously. So seriously that two of the biggest and best known, BMW and Volkswagen, are funneling billions of dollars into electric car programs to keep pace with the American upstart.
BMW, of course, was at the vanguard of the modern EV revolution with the subcompact i3 introduced in 2013. But it never really capitalized on that head start, preferring to focus on hybrid cars rather than develop a family of EVs. Volkswagen also dipped a toe in EV waters with the e-Golf in 2014, but it was the dieselgate scandal that followed a year later that really persuaded the Wolfsburg firm to put its might behind electric power.
Maybe it’s the lingering shame of that episode that explains why, of the two companies, it’s Volkswagen and not BMW that’s so focused on an electric future. BMW is keeping its options open, backing e-fuels to extend the life of combustion engines and developing hydrogen cars. But even still, BMW expects more than 50 percent of its new car sales to come from EVs well before its internal 2030 target and is spending big to make that happen.
Related: VW ID.2all Concept: A $27K EV That Beats Tesla To The Punch
BMW revealed this week that it allocated a record €7.8 billion ($8.3 bn), or 5.5 percent of its revenue, on capital expenditure, and overall investment will grow to potentially 11 percent of revenue this year as the company prepares for the launch of the Neue Klasse generation of EVs. One of those cars was previewed by the i Vision Dee concept seen above, a precursor to a future 3-Series, but the first Neue Klasse car to arrive is a compact SUV in 2025.
But even that $8 bn investment is beer money compared with what VW is throwing behind its EV transformation. According to The Wall Street Journal, the company has announced it will spend €180 billion ($191 bn) over five years, with two-thirds of that cash being swallowed up by the development of electric and digital tech on cars like the new ID.2, seen below in concept form.
Both BMW and Volkswagen will be hoping that those big investments will be enough to keep pace with Tesla, though for VW especially, Elon Musk’s firm is far from the only threat. Chinese EVs are only now starting to infiltrate western markets, but five years from now their presence might make even keeping up with Tesla seem like an easy race.
