BMW to increase R&D spend to manage CO2, e-mobility

BMW 4-series car

BMW anticipates its research and development budget, when determined as a portion of sales, to increase in 2018, its CFO informed a German paper.

“Decreasing CO2 emissions, electrifying engines and autonomous driving are the major challenges for our market over the next years,” the automaker’s Chief Financial Officer Nicolas Peter informed Boersen-Zeitung in an interview released on Saturday.

He stated that R&D spending would represent about 6 percent of sales this year, boost of 5.5 percent in last year.

“Next year, too, ought to see a higher ratio,” Peter reportedly said.

BMW anticipates sales to grow a little this year compared to the 86.42 billion euros ($96.82 billion) in last year, suggesting R&D spending of over 5.19 billion euros this year.

For several years, automakers have struggled to lower the expense of electrical vehicles, which have failed to gain traction with customers in part due to their cost. At the same time, they are required to cut the emissions of their fleets and face decreasing demand for diesel vehicles.

German Chancellor Angela Merkel, in her weekly Saturday podcast, also stated it would be preferable for Europe’s biggest economy to produce battery cells for electrical automobiles locally and decrease dependency on Asian providers.

“And if are part of the research, likewise with regard to the models, then I believe it improves the outlook of bringing modern-day production of next-generation cells back to Europe and Germany,” Merkel said.

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