At the IAA in Munich, BMW is showing a near-production car from its fully electric “New Class” for the first time, which will come onto the market in 2025. CEO Oliver Zipse said at the preliminary premiere on Saturday that the range and charging speed were 30 percent better than those of today’s electric vehicles. The entire vehicle architecture is now completely geared towards electric drive, and because the expansion and recycling of all components is planned during development, the cars are also more environmentally friendly.

BMW does not generally earn less money with its electric cars than with its gasoline and diesel cars, said Zipse. Production is more expensive and costs are higher – but “the assumption that combustion engines are always more profitable than electric cars is completely wrong,” he said. “We make money with every electric car today, and this will be even more the case with the New Class. It will be very profitable.” With software modules for the drive, chassis, electrical system and driving assistance, for example, the new generation of vehicles saves cable harnesses, weight and money.

As a vision vehicle, BMW did not present a sports terrain model (SUV), but a mid-size sedan the size of today’s 3 Series. The first model of the new class will be an SUV from the new BMW factory in Debrecen, Hungary, at the end of 2025. The second model will be launched at the main plant in Munich at almost the same time in early 2026, and then other cars based on this architecture will quickly follow, Zipse said. A smaller BMW is also planned.

BMW wants to determine the purchase price for the cars shortly before the start of series production. “We will not price ourselves out of the market,” said Zipse. There is currently a price war in China in particular, with many new car manufacturers and cheap e-vehicles. In the premium segment, the price pressure is less noticeable, as the rules of the game are different. In China, BMW sales grew by four percent in the first half of the year. Tesla is exiting the premium segment and going into the volume segment, Zipse said. BMW, on the other hand, is keeping its prices and its market share.

BMW wants to sell 15 percent of its cars with electric drives this year, and by 2026 it should be 33 percent. The timing for the start of the “New Class” in 2025 was “perfect” because the industry is about to take a leap in technology, said Zipse. The battery is making a giant leap, and the demand for electric cars will increase significantly in the middle of the decade.

However, the demand for combustion engines will remain very high worldwide for a long time. In contrast to pure e-car manufacturers, BMW can also meet this demand and will continue to grow, said Zipse.

Several Chinese car manufacturers are showing their e-vehicles at the IAA for the first time. At the fair on Wednesday, Zipse will speak at a forum with the CEOs of the Chinese car manufacturers Saic, BYD, Chonquing and Nio as well as the CEOs of Mercedes-Benz and Volkswagen, Ola Källenius and Oliver Blume.

It remains to be seen whether the Chinese car manufacturers will gain a foothold in Europe like the Japanese did in the 1970s and the South Koreans afterwards, said Zipse. But they have a cost advantage and are very strong when it comes to software. The basic segment may no longer be served by European manufacturers with electric cars. But “a BMW drives differently than a Chinese vehicle. It’s not that easy to reach the top of this industry,” said Zipse. Chinese manufacturers would have to build brands, sales and service networks. They have the potential to be aggressive on pricing, but are not currently doing so.

In Munich, the BMW vision vehicle of the new class can be seen from Tuesday on the freely accessible IAA areas in the city center. BMW had once used the term New Class for the compact BMW 1500 sedan, which was presented at the IAA in 1961 and saved the company from skidding at the time. At BMW, the term now stands for the Group’s transition to electromobility, digitization and the circular economy.