MUNICH – BMW, the iconic German automaker, is revisiting its historic “Neue Klasse” brand, this time as an electric vehicle (EV), as it seeks to compete with industry leader Tesla. The move echoes a strategic pivot the company made in the 1960s when it launched the original Neue Klasse, setting the stage for BMW’s transformation into a premier automotive brand.
Back in the early 1960s, BMW was facing significant challenges, trailing behind competitors like Volkswagen and Mercedes-Benz while Detroit’s giants dominated the automotive landscape. To turn their fortunes around, BMW bet everything on a new car known as the “Neue Klasse,” or “new class.” The debut of the BMW 1800 in 1962 marked the beginning of BMW’s journey to become known as “the ultimate driving machine” and one of the most successful brands in the industry.
Today, BMW stands at another crossroads and is once again turning to the “Neue Klasse” to chart a new strategic course. At the recent Munich autoshow, BMW unveiled a prototype for a “Neue Klasse” electric vehicle, roughly the size of the current 3-series, one of the brand’s best-selling models. This prototype showcases cutting-edge features like panoramic information “head-up” displays projected on the windshield and retains some traditional BMW design elements, such as the distinctive angle in the rear side windows known as the Hofmeister kink.
“We want to make this vehicle generation so modern that it looks like we skipped one generation,” stated BMW Chief Designer Adrian van Hooydonk. “That is necessary because of those new players that are coming in. You know the debate that’s been going on: Oh, traditional OEM (manufacturer) over 100 years old, can you make this step? We can and we want to.”
BMW is gearing up for a multibillion-euro investment to bridge the technology gap with Tesla and other EV manufacturers that have surged ahead in terms of technology and software-driven features. This move comes despite BMW’s relatively early embrace of EVs with the launch of the i3 compact in 2013, which, while pioneering, never achieved the sales volumes BMW had hoped for and was eventually discontinued in 2022.
Frank Weber, BMW’s chief technology officer, emphasized the scale of the investment, calling the Neue Klasse project “by far the biggest investment in our history” and highlighting the comprehensive technological overhaul across all areas of BMW’s operations.
BMW is investing €2 billion ($2.2 billion) in new battery manufacturing and assembly facilities for the Neue Klasse at a plant in Hungary, making it one of the first factories to start producing these vehicles. When the Neue Klasse enters production in 2025, it will be 13 years after Tesla launched the Model S, marking a significant shift in the automotive landscape.
BMW’s new compact EVs will enter a highly competitive market where Tesla has initiated a price war. BMW has not yet disclosed pricing details for the Neue Klasse but promises a competitive offering. CEO Oliver Zipse stated, “We will not price ourselves out of this market.”
In addition to price competition, Tesla has disrupted the automotive business model by selling directly to customers, offering over-the-air software updates to enhance features, and continuously collecting vehicle data to improve driver assistance systems and other functions.
BMW’s Neue Klasse vehicles will utilize cylindrical batteries with a 48-millimeter diameter and varying lengths, similar to Tesla’s approach in models like the Cybertruck. BMW aims to achieve a 50% reduction in battery pack costs and a 25% increase in range per kilowatt-hour, a key measure of efficiency.
The transformation extends beyond manufacturing. BMW is reconfiguring its main assembly plant in Munich to produce the Neue Klasse vehicles, which will eventually replace existing combustion models, including the 3-series sedan and X3 utility vehicles. The software systems and battery technology underpinning the Neue Klasse vehicles present significant challenges, with BMW developing four “super brains” to control propulsion, driver assistance systems, infotainment, and other functions.
Stephan Durach, senior vice president for connected company development, noted BMW’s commitment to head-up displays projected on the windshield as an alternative to the large video screens used by competitors like Tesla and Mercedes. This shift has required significant adjustments to the vehicle’s architecture.
As BMW embarks on this ambitious journey with the Neue Klasse, it is clear that the company is determined to reassert itself as a pioneer in the automotive industry, poised to challenge Tesla’s dominance in the electric vehicle market. Only time will tell if this strategic pivot will once again position BMW as an industry leader.