BMW increases R&D spending for electric, autonomous vehicles

German automaker BMW will boost research and development (R&D) spending to an all-time high of up to 7 billion euros ($8.6 billion) in 2018 as part of motivation to bring 25 electrified models to market by 2025.

The Munich-based maker of BMW, Rolls-Royce and Mini vehicles stated that regardless of higher spending it aims group pre-tax profit to be more than 10 billion euros in this year, at least in line with 2017’s level.

In its yearly report, BMW also cautioned of a possible effect from trade barriers and any anti-dumping customs duties in the United States and added that Brexit could have an unfavorable long term effect.

Spending on developing electric and autonomous vehicles prompted R&D costs a billion euros higher in 2017, reaching 6.1 billion euros.

Investment will boost by a further high three-digit million euro amount yearly, mainly from the ongoing new model initiative in addition to continued work on e-mobility and autonomous driving, BMW stated on Wednesday.

BMW’s R&D ratio for this year is expected to be between 6.5 percent and 7 percent of sales. In the upcoming two years the R&D ratio is expected to remain above its average target corridor of 5 percent to 5.5 percent range, BMW stated.