“First, with the ongoing development of the charging infrastructure and increased availability of a range of EV options, I believe the demand for EVs will continue to grow in 2023. As more drivers transition to EVs, this bigger volume of EVs on the road combined with increased competition in the EV space, will further accelerate the goal for electromobility to become mainstream.
Second, we believe that digitalisation and connectivity will continue to gain traction in the year ahead. Such topics demand agile team structures as well as fast decision-making and implementation. For example, at the BMW Group, we have been making use of smart logistics, virtual reality systems and artificial intelligence because we believe that innovative technologies are an essential component for unique customer experiences and sustainable business development.
While the automotive industry is not immune to economic cycles, the luxury segment tends to be rather resilient when the market is experiencing some turbulence. The aim is to keep the momentum going when times are challenging and come back in full force once the situation becomes more favourable again.
Sustainable mobility is another key topic that will only continue to grow in importance, but it is just as critical to push the envelope to make a bigger difference. For example, the BMW Group is commencing production of its BMW iX5 Hydrogen model. The first-ever Sports Activity Vehicle (SAV) featuring hydrogen fuel cell technology will be used as a technology demonstrator for locally carbon-free mobility in selected regions from next year.
As of last September, the BMW Group delivered over 128,000 EVs to customers globally – more than twice the number for the same period in 2021. With our fast-growing range of products and strong demand for new electric models, we expect sales of EVs to increase significantly. By the end of 2025, we aim to have more than two million fully-electric vehicles on the roads.
This year, including pre-production vehicles, the company has 15 fully-electric models in production, and we will continue to up the pace in 2023 with new EV models such as the first-ever BMW i5.
In Singapore, we expect the demand for our EVs to continue strong into 2023, particularly with the recent launch of the first-ever BMW i7 and the BMW i4 and BMW i4 M50 last year; two extremely popular EVs with demand exceeding supply.
The difficult chip supply situation means individual adjustments are still being made to our production programme, with a corresponding impact on sales. We expect semiconductor components to remain in short supply in the coming months.
Ongoing semiconductor bottlenecks could lead to further production adjustments at our plants. However, thanks to its highly flexible production system and flexible work-time models, the BMW Group is able to make adjustments at relatively short notice.
Our aim is to ensure supplies continue to reach our plants. To secure semiconductor supplies in the long-term, we are also adopting new long-term approaches involving direct agreements with chip suppliers such as INOVA Semiconductors and GlobalFoundries to secure supplies.
It is difficult to predict what will happen with the COE, but based on industry insights, we expect it to remain high as we enter 2023. While it may impact when our customers make their purchases, it is not keeping them from seeing and experiencing the latest models that we have to offer.
It is also an opportunity for us to provide our customers with options, such as BMW Flow (leasing) or Access by BMW (subscription), which will allow them to still drive the BMW they want, but at a much lower initial investment.”