BMW CEO says politics will not rule its EV decisions

LAS VEGAS — BMW Group CEO Oliver Zipse vowed last week that the company will do what makes business sense and not be forced off-course by political agendas.

Munich-based BMW is under pressure to rethink its supply lines and production footprint concerning EV parts and batteries to qualify for a new tax credit meant to promote North American production.

Zipse said that market demand, not politics, will guide BMW's future investment in the U.S.

"We would not change in a substantial manner our strategy because of current politics," the CEO said at a media briefing at CES 2023. "Our cars have a life cycle of maybe seven years, sometimes even longer. That's roughly two or three administrations."

Zipse illustrated the perils of reacting to political winds during the Trump administration.

“We discussed with the previous administration … and they would try to force us into the implementation of a combustion engine plant in the United States, which we don't have today," Zipse said.

Had BMW gone along, he said, it would have been misguided, given the industry's pivot away from fossil fuels.

"For God's sake, we didn't do that," Zipse exclaimed. "We have our own mind, and sometimes you must follow your strategy."

Like some foreign automaker bosses, Zipse expressed frustration with the Inflation Reduction Act that ties EV tax credits to North American production and sourcing of key parts and raw materials.

He believes the law tips the advantage to U.S. automakers with more expansive domestic production and supplier networks.

"We would ask for a level playing field as long as you are serving an American customer," Zipse said. "Europe does not make any differentiation where the car comes from. You get an incentive or tax break if you sell a car in Europe."

In some ways, he said, BMW is already as American as apple pie.

The luxury automaker operates an assembly plant in Spartanburg, S.C. — its largest in the world — which employs more than 11,000 people. The 7 million-square-foot production hub stamped out more than 416,000 crossovers last year, with about 40 percent of them exported to world markets.

"For the past eight years, we have been the largest exporter in value from the United States to the rest of the world — more than any American manufacturer does," Zipse said. "We are an American producer 100 percent."

BMW is now plowing $1.7 billion into building a new generation of electric vehicles in South Carolina. Production of BMW's Neue Klasse platform EVs will begin there mid-decade along with battery pack assembly.

"If we put that big investment into the country and we would not be part of the IRA umbrella, that would be a disappointment," Zipse said. "When a level playing field is disturbed or at risk, then it becomes for politicians a dangerous thing because there is always a backlash."