Companies
BMW is winning big in EVs this year but says adoption is slowing down
Summary
- BMW fell short of its projected EV sales volume targets due to negative customer sentiment in key markets such as China and subsidy cutbacks in other nations
New Delhi: German luxury carmaker BMW has emerged as the third largest electric vehicle (EV) manufacturer globally in the first half of this year, trailing only Tesla and China's BYD. Even as BMW says its superior products helped it gain ground over rivals like Mercedes-Benz, Audi, and Volkswagen, it fell short of its projected EV sales volume targets due to negative customer sentiment in key markets such as China and subsidy cutbacks in other nations.
“The adoption of EVs is very much linked to the countries' EV policies. And we've seen in some markets that subsidies are being reduced due to budget constraints," said Jean Phillipe Parain, senior vice president for the Asia-Pacific, Eastern Europe, Middle East and Africa regions for the BMW Group.
“Where the subsidies are increased, EVs become more popular. To take an example, in a market like Australia, we went from 3% EV penetration in 2023 to probably 25% in 2025 because of the country's EV policy. It is a very clear policy and we see a strong increase."
"But it's true that on a worldwide level due to this budget constraint the adoption has been slower than expected. We had also planned a stronger electric vehicles sales growth so we have had to take that into account", he added.
India market
In the Indian context, BMW EVs are reaching the same level of intracity usage as their IC-engine counterparts here, Vikram Pahwa, president, BMW Group India said.
BMW launched four new products across its Motorrad, Mini & BMW brands in India on Wednesday. The launches included a new electric scooter by BMW called CE04, the new long-wheelbase BMW 5 Series, as well as the new electric Mini Countryman and Mini Cooper S. Deliveries for the products will begin in September.
"We see competitors really struggle with their transformation (to EVs). Porsche EV sales were down 50%, and Mercedes and Audi are also struggling. We believe we have the better products, which is the main explanation for our growth. We also have made 360 efforts involving our dealer partners, infrastructure investment and destination charging", Parain said.
According to Parain, OEMs will have to remain flexible to adjust to the pace of EV adoption in different markets, a strategy also echoed by rival Mercedes Benz.
"I think that flexibility will be key, because while we are sure EV adoption will grow, the pace will remain the question mark"
“But we believe in it (in EVs) We are highly invested in it. We will expand our investments in electric vehicles will introduce very soon a brand new generation of electric vehicles."
Parain also clarified that in the Indian context, the government should focus on incentivizing EVs and not hybrids, so as not to "confuse" investors.
He also said that until charging infrastructure is able to drive customers towards EVs naturally, subsidies will play an important role in nudging customers to choose a new technology.
“You notice when you have strong incentives, you have a stronger adoption and when you remove them, then it slows down. That has been the case in the in Germany, that is probably the case in Australia. Today, without incentives, a customer will go for the technology they know the most and that's probably an IC-engine car. That's why these incentives are very important to engage into this transition," Parain told Mint.
"The problem is that if you change the scheme too much for investors, it's very complicated to plan. If hybrids are also made part of the equation suddenly, that makes the decision for the business case more complicated, because then you can't really predict what will happen and then you don't necessarily decide. I think the government has to be very careful with changes of policies, certain changes of policies", he said.
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