BMW is expected to double the delivery of pure electric vehicles this year BMW Brilliance will fully merge with the BMW Group

Per reporter: Pei Jianru Per reporter Per editor: Sun Lei

"In the current situation, the BMW Group has three things that are most important: doing what we can to help those affected by [the conflict], ensuring our day-to-day operations around the world, and continuing to systematically implement our long-term strategy." On March 16, CHIPZE, chairman of the BMW Group, said at the 2022 BMW Group financial report annual meeting.

Image source: Courtesy of the enterprise

It is understood that affected by the Conflict between Russia and Ukraine, the production of some suppliers of the BMW Group has been interrupted, which has also caused the BMW Group to suffer from the crisis of supply interruption of some parts. The BMW Group is currently working with suppliers to find solutions to ensure that production is resumed as soon as possible and to minimize the impact with the high flexibility of its production network.

On the same day, the latest data from the BMW Group showed that for the whole year of 2021, the total revenue of the BMW Group was 111.239 billion euros, an increase of 12.4% year-on-year; the group's pre-tax income was 16.06 billion euros, an increase of 207.5% year-on-year; and the group's net profit was 12.463 billion euros, an increase of 223.1% year-on-year.

Among them, in 2021, the BMW Group's automotive business revenue climbed to 95.476 billion euros, an increase of 18.1% year-on-year, and the EBIT margin was 10.3%; the contribution of the automotive business to free cash flow reached 6.354 billion euros at the end of 2021, an increase of 87.2% year-on-year.

On this basis, the BMW Group expects its EBIT for cars to remain at 8% to 10% in fiscal 2022. However, considering the production adjustment brought about by the Russian-Ukrainian conflict and other factors, the figure is expected to be 7% to 9%.

The incorporation of BMW Brilliance's reports can generate a positive impact of more than 7 billion euros

It is worth noting that since February 11 this year, the shares held by BMW Group in bmw brilliance automotive co., LTD. (hereinafter referred to as BMW Brilliance) in China have been changed to 75%. This means that from 2022 onwards, BMW Brilliance's financial statements will be fully integrated into the BMW Group.

"It is estimated that this will have a one-time positive impact of between €7 billion and €8 billion on the Group's financial results. We expect the free cash flow of the automotive business to be at least €12 billion in 2022. However, the above financial results will be partially offset by annual depreciation expense in the purchase price distribution in the coming years, and the technical impact of the initial integration related to the group's internal deliveries will also dampen earnings in 2022, so it is not expected that the EBIT of BMW's automotive business will be materially affected this year. BMW Group director in charge of finance Peter said.

Peter believes that due to the combined impact of geopolitics, parts supply, rising raw material prices, the epidemic and other factors, bmw group's new car deliveries worldwide in 2022 will remain at the same level as last year, and the delivery of pure electric vehicles is expected to double.

In the motorcycle sector, the BMW Group expects its motorcycle deliveries to increase slightly, and the EBIT margin remains within the target range of 8% to 10%. In addition, in the financial services sector, the BMW Group expects its return on net assets to be between 14% and 17%.

It is worth mentioning that in order to promote technological change, the BMW Group also plans to increase its total number of employees worldwide by 5% this year.

As for the shortage of chip supply, BMW Group believes that as in 2021, there are still supply difficulties in semiconductor components, and this situation is expected to improve until the second half of 2022.

During the year, 15 pure electric models were mass-produced and trial-produced

While the main business is growing steadily, the electrification transformation of the BMW Group is still accelerating.

According to the latest plan, in 2022, the BMW Group will mass-produce and trial-produce 15 pure electric vehicle models; the "new generation" model based on the new structure will begin trial production in 2024 and be unveiled in 2025, equipped with the sixth generation of eDrive electric drive system; by the end of 2025, the BMW Group plans to deliver 2 million pure electric vehicles worldwide.

In addition to the iX, i4, iX3 and other models that have already been listed, the BMW Group will also launch pure electric models of the 3 Series, 5 Series, X1 and other series models this year. Among them, the pure electric BMW i7 will be launched in April this year together with the new generation of BMW 7 Series.

"By 2030, at least half of BMW's total global sales will be pure electric vehicles. We are doing everything possible to achieve this ahead of schedule. By then, the annual sales of pure electric vehicles will exceed 1.5 million units. Of course, this also depends on the speed of development of charging infrastructure in different parts of the world, as well as the supply of battery-related raw materials. Ziptzer said.

According to Chiptzer, in order to ensure the production of existing models, the BMW Group has also made full preparations for the supply of key components. For example, in order to ensure an adequate supply of batteries, the BMW Group has increased the purchase of batteries equipped with the fifth-generation eDrive electric drive system from 12 billion euros to more than 20 billion euros.

Not only that, but the BMW Group has also proposed a new standard for production networks – the BMW iFACTORY. BMW iFACTORY represents BMW's strategic vision for production: lean, green and digital, which will be used at all BMW Group plants worldwide, including three vehicle plants and one powertrain plant at the Shenyang production site.

It is reported that bmw group is planning to build a plant in Debrecen, Hungary, will break ground in June this year, the plant will put into production of "new generation" models, will also apply the BMW iFACTORY standard.

In addition, the BMW Group's hydrogen fuel cell technology is also advancing, and the electric drive system based on this technology can also be applied to "new generation" models. This year, the BMW iX5 Hydrogen fuel cell vehicle will undergo small-scale mass production. It is expected that from the second half of the 2020s, hydrogen fuel cell technology will be more and more represented in BMW's drive system portfolio.

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