I'm wondering why. Since it's from WSJ don't expect it to give us the real reason. As the saying goes if you don't want to cannibalize your product someone will do it for you.
It looks like they are behind the power curve. They need to make investments in future technology but their profits are already being diminished by the technologies already here. They don't have the resources to re-tool and re-train/re-hire a workforce. They won't be the only legacy automakers who face the same predicament. I'm not saying they can't do it, but the longer they wait the harder it gets.
The idea that Tesla has no intellectual property and know structural advantage because anything they have now can "be easily reproduced by existing automakers in a much shorter time" is a myth that ignores the reality of institutional inertia.
The in incumbents thought the EV market is limited to hardcore tree huggers, ooh boy were they wrong!
The car in the picture. Yuck! What’s with that butt grill?
@SO agree the car pictured is "Butt UGLY" IMHO.
Yes they were wrong @El Mirio! Go Tesla!
Yeah, I'd say that picture at the top of the article is reason enough for failure. You should warn people, I threw up a little in my mouth when I saw it.
The other problem for them and the other "luxury" brands is as they transition to EVs, what makes their cars what they are, goes away. The "heart and soul" of a car is the drivetrain. BMWs are known for their excellent 6 cylinders. Much of the feel of a German car is via it's drivetrain. Take that away and what is the difference between a BMW and a VW....? I know someone that loves and has several V-12 Mercedes. The stump pulling power and silky smooth running of the V-12 is unique, unless you compare it to an EV....
To sum up what the Germans in particular are going through is the same thing a 8 yr old goes through when he/she is told there is no Santa Claus. Everything you thought was true and went about your daily life believing, is over.
BMW’s ‘DNA’ was driven involvement, refinement, and luxury.
In 2011, when they switched to the F platforms from E, they lost part of the DNA, the driver involvement. When they brought out some compliance electric cars, they dumbed down the DNA further. I drove an i3 when it came out. It was like riding in a cheap Chevy compact SUV. The road, wind noise, numb steering..
BMW is confused which direction to go in.
Their latest G platforms are supposedly bringing back the driver involvement. I have to drive the latest 3 series to confirm that.
However, I already have an analog for the erstwhile 3 series. It’s called Model 3. When I looked into Tesla around 2010, I wanted an electric 325i. 8 years later, I got it. I don’t need to look at what any other carmaker does anymore!
BMW- "Batteries Might Work"
End of an era.
BMW - They are made in South Carolina "Bubba Makes Wheels!"
10B pre-tax euros doesn't sound too bad for "bleak".
10B is BMWs entry fee to the EV card game. Not the size of the stake they'll need to actually meaningfully participate.
And represents their entire "profit" before interest and tax.
So yes, its represents a large wad of money at stake.
BMW sold a flat 2.5 million cars, in 2018, for total revenue of over 85 million Euro.
By end of 2019 Tesla will sell 0.5 million cars a year, and 1 million a year by end of 2020.
One is in stellar growth mode as it has no legacy ICE car sales to protect, the other in "not so much" growth mode, with 2.5 million legacy ICE car sales per year it needs to protect - in order to fund their future 10B entry fee.
Which one do you think is positioned best for that future?
They decided to make the announcement now, that trade disputes and what not can be blamed. What CEO is willing to admit they've made strategic miscalculations about Tesla? That their core competitive advantage is turning into huge liability and they are sitting on billions worth of infrastructure that is becoming obsolete.
They need to write off tens or hundreds of billions invested in R&D and production of ICE cars and to replace major engineering experties too. They could not afford to do it in a few short years but then again they would not be able to survive if they take more time to do that either. I hate to be in their shoes athough that's just the way things like this always play out.