The BMW Group reported it more than doubled its sales of electric vehicles in the first quarter as the German automaker’s revenue increased by 18.9% and its net income increased fivefold, topping $3 billion.
“The first quarter shows that our global business model is a successful one, even in times of crisis. We remain firmly on track for continued sustainable, profitable growth,” Oliver Zipse chairman BMW’s board of management said in a strategy
“Our strategy is based on retaining a keen focus on providing attractive high-tech products that are destined to shape the changing world of mobility going forward. With this clear vision, we are already developing the next major technological leaps that will continue to fascinate our customers ten years from now.”
Shift to EVs picking up momentum
The luxury automaker is focused what it describes as digitally connected, sustainable electric mobility through the systematic addition of electrified drivetrain technologies to its model portfolio. Officials set a goal of increasing the company EV sales by an average of more than 50% per year through 2025.
By then, the BMW Group plans to have some 2 million fully electric vehicles on roads worldwide, officials said. This includes all of the company’s brands, BMW, Mini, etc.
The strong demand for plug-in hybrids and fully electric vehicles contributed substantially to the sales performance in the first quarter, with deliveries more than doubling compared to the same quarter one year earlier as sales totaled 70,207 electrified vehicles during the first quarter.
Stronger sales across the board
Higher sales volume in the first quarter 2021 resulted in corresponding increases in automotive segment revenues and earnings.
Worldwide deliveries of BMW brand vehicles increased 36.1%. Mini brand sales increased 16% and sales by Rolls-Royce increased by 61.8% with China, the U.S. and Asia-Pacific contributing most of the growth, BMW reported.
The greatly improved level of revenue and earnings was driven by a combination of higher sales volume figures across all regions of the world, particularly in China, and improved selling prices. Positive effects also came from the robust situation on pre-owned vehicle markets, causing revenues from the sale of previously leased vehicles to rise, above all in the U.S.
The improvement also contributed to earnings growth. In particular, the Group’s share of the profit in the Chinese joint venture BMW Brilliance Automotive amounting to 503 million euros, or $612.1 million, compared with 162 million euros, or $197.1 million, in the first quarter of 2020.
Profitability key and outlook unchanged
Nicolas Peter, member of the board of management of BMW AG Finance said, “Profitability is a key aspect of our transformation journey. Our operational strength enables us to manage the move towards a world of digitally connected, sustainable mobility. With this aim in mind, we are investing specifically in low-emission drivetrain systems and attractive, highly innovative products and equipment.”
Meanwhile, the outlook remains stable despite the continuing challenges posed by the pandemic.
“In light of the current dynamic environment, the BMW Group reaffirms its outlook for the full year, expecting business performance continuing to develop positively. New models and digital services covering various aspects of individual mobility are likely to ensure that demand remains buoyant. Group profit before tax is therefore predicted to rise significantly during the outlook period,” BMW said.
The BMW’s automotive segment is expected to record a solid year-on-year increase in the number of BMW, Mini and Rolls-Royce brand vehicles delivered to customers. The segment’s EBIT margin is set to improve significantly on the previous year’s figure and come in at the upper end of the forecast range between 6% and 8%.However, rising raw materials prices could have a dampening impact on earnings going forward by adding more than a $1 billion in additional expenses to the company’s bill of materials, BMW officials said.