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The Tokyo Mobility Show – formerly the Tokyo Auto Show – is always an interesting time. This year, we saw several interesting new EVs and hybrid vehicles. Honda has even reanimated the Prelude nameplate. But with Oliver Zipse in attendance, you know there will always be some interesting BMW insights. We sat down with the BMW boss to learn more about the company’s plans in Japan and South Korea, about their efforts in the field of hydrogen, and the future of Neue Klasse, among many other topics.
Future of Hydrogen and the BMW/Toyota Partnership
Zipse opens by stating the obvious. The Tokyo Mobility Show features primarily Japanese OEMs – why is BMW’s attendance important? He says that the East Asian market is not only the most demanding regarding customer relations and quality expectations – they’re also heavy technology industries. This significantly impacts BMW’s tech partner Toyota – and, by extension, BMW themselves. “South Korea, Japan, and China, they consider hydrogen the missing link in emission-free mobility,” Zipse says.
He’s also quick to note that Japan and China both have a game plan for hydrogen power in place. Admittedly, it may be in its infancy. “The more you go eastward in the world,” he starts, “the more hydrogen becomes one of the elements – not the only the element – but one of the elements. That’s the reason we’re here.”
Facing down a question that gets asked at least once daily on the internet, Zipse is adamant that hydrogen power is an important niche. “If you’ve lost the capability to build top-notch benchmark technology in your cars, you will lose market share,” he says. “Hydrogen is just another drivetrain offering – nothing peculiar, it’s the same car.” He goes further. “If you think your car architecture must depend on one drivetrain, okay. We will see the results – you will lose market.” Zipse says their partnership with Toyota allowed both OEMs to grow by 6% last quarter.
Hydrogen, But Still a BMW
Of course, the pursuit of alternative fuels – and market share – doesn’t mean sacrificing what makes a BMW special. We’ve heard this before, frequently surrounding EVs, from many different sources at BMW, but Zipse drives the point home. “It’s a real BMW with real BMW behavior. You don’t split your company in half, or something. Hydrogen is just one element in there,” he says, pun probably unintentional. “It’s not a new strategy. is not a new platform. You make yourself independent of the drive train. That’s the BMW strategy and it works.”
Value and Scalability in Hydrogen – and the BMW Work Truck?
“We don’t have to scale,” Zipse starts. “The investments in the hydrogen industry are much bigger than in electric cars.” He thinks automakers are missing the big picture by solely looking at battery electric vehicles. From the steel industry to air travel industries to the obvious “big fish” shipping industry, hydrogen has a role to play everywhere. “If you only look at the car business, then, of course, you say, ‘Well, it’s too small’. But that’s not the point. Hydrogen will not have its origin in the car industry.”
Fuel cells have a lot to do with the scalability of hydrogen, too. Assembling and arranging the fuel cells correctly makes packaging either impossible or convenient for the consumer. “It will come through the light duty vehicles, that’s where it starts,” Zipse says. Light duty vehicles using fuel cells will run a high utilization rate, he thinks. They’re not too heavy and can be efficient, requiring quick refuel times instead of long recharges.
Finally, Zipse muses a bit on the more practical nature that work-oriented vehicles take on. “This industry has always been a very unique industry. It’s nothing like passenger cars. First of all, they’re driven fully by used case and cost per kilometer,” he says. Certainly a far cry from a luxury vehicle like most BMWs we see on sale today. He’s unsure which – between hydrogen, hybrid, and EV – powertrain comes out on top for work vehicles. “Batteries are simply too expensive” for light-duty vehicles, but “large trucks are different.” He thinks the marketplace is still very young, and there’s plenty of time to explore. “I’m not an expert. I’m just listening and seeing what’s happening.”
BMW is a Happy Company
Anyone who’s seen a BMW vehicle redesign in the last few years might be under the impression that the automaker is having a bit of an identity crisis. That is not the case, according to Oliver. Surveys circulated throughout the company have returned the highest results ever, he says. So, everything you see coming out of BMW is apparently a complete team effort. The surveys comprised over fifty questions touching on subjects like workplace pride and corporate strategy. “We keep an openness,” Zipse says. “To have a breadth of capabilities without putting all your eggs in one basket is what employees really like.”
Neue Klasse – Biggest Transformation For The Company
But what about the future and Neue Klasse? “This moment is exceptionally clear, and the opportunity it presents is unique,” says Zipse. “It’s a remarkable coincidence that many life cycles align precisely. Simultaneously, the electric market has matured enough to accommodate a new architectural shift. Timing is crucial – being neither too early nor too late is key,” added the BMW boss.
The technology is also maturing faster than ever before. “When we consider the car, we must not confine it to just being a vehicle; it’s a confluence of technology clusters,” Zipse said. “Autonomous driving underscores the convergence of the latest technologies, and the sixth generation of cells, taking on an atomic scale, is pivotal for scalability. We must avoid pursuing something that can’t be scaled effectively. The technology should be cost-effective, and energy density should have advanced sufficiently. This convergence allows us to integrate everything into our architecture as lifestyles evolve.”
The BMW boss also says that the company must address the growing concern of driver distraction. Recent BMW moved away from physical buttons and switches, and more into touch and voice controls. As you’d expect, customers are not thrilled with the changes. So what will the future bring? “Operating menus located below the line of sight is worse than using a handheld device, as it diverts your attention from the road,” Zipse told us. “This calls for a reimagining of the central information display and a more user-friendly multifunctional sphere. Our BMW Panoramic Vision, spanning from pillar to pillar, is an industry innovation that ensures your eyes stay on the road.”
Of course, this is not an easy task since BMW still needs to provide the Ultimate Driving Experience. “We’ve shaped everything around this core principle [Ultimate Driving Experience], creating a driver-centric interface. It involves decades of research to find the right balance, incorporating technologies like voice recognition and artificial intelligence to minimize distractions and transform the car into a companion.”
Is The Sedan Market Dying?
In the last two decades, the crossover and SUVs market have been consistently growing, accounting for a majority of BMW’s sales. So why is the Munich-based automaker teasing the Neue Klasse family of cars with an electric sedan instead of the iX3 crossover? “It’s very difficult for people to understand that there will be revitalization of this of the classical limousine,” says Zipse. “It will not vanish, the limousine will not vanish,” he added.
Germany-China Relations
In the geopolitical landscape, there is an aggressive rhetoric from Europe, particularly against China. How does BMW navigate this geopolitical climate where Europe seeks to decouple from the Chinese economy? “Well, if the goal is to reduce global risks, the solution lies in cooperation rather than decoupling,” Zipse states. “I often think of the periodic table of elements. I ask myself where all these elements come from, and the automotive industry is intricately tied to these elements and raw materials, which are not evenly distributed across the world.”
“Restricting access to specific technologies would hinder technological progress and innovation, which are essential for reducing CO2 emissions and moving towards a circular economy. It’s all technology-driven. To achieve this, we must work together and promote free and fair trade. We are committed to advocating for these principles and ensuring they are upheld, even if it means aligning with our partners. In the electric car industry, what’s essential is that every region supports the sector, be it through incentives, investments, or other means. However, it’s crucial to exercise caution in investigations, as measures that are intended to protect one’s interests can quickly backfire.”
BMW and e-fuels
It’s a known fact that the main impact of e-fuels is on existing fleets, so is BMW investigating this field? “BMW’s approach isn’t limited to just one technology, but encompasses a broader perspective,” the BMW boss says. “With 1.2 billion cars currently in operation worldwide, it’s unrealistic to expect them to disappear overnight. Therefore, the focus is not solely on new cars but on the existing fleet as well. In Europe alone, there are 260 million cars, with approximately 13 million new cars being sold. To make a meaningful contribution to climate change, attention must be directed towards the existing fleet of 20 million BMWs worldwide, as this is crucial for achieving maximum efficiency in reducing CO2 emissions. The main argument revolves around recognizing the importance of addressing both new and existing vehicles in the pursuit of sustainability.”
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