While it was an early EV pioneer with the little M3, BMW fell behind rivals like Tesla and Mercedes-Benz in recent years. Now it’s making up for lost time rolling out an assortment of all-electric models, including versions of its iconic 5 Series and 7 Series lines. To get insight into the Bavarian automaker’s EV strategy Headlight.News caught up with Shaun Bugbee, Executive Vice President of Operations for BMW of North America during a visit to Spartanburg, South Carolina, home of the automaker’s U.S. manufacturing center.
Bugbee joined BMW in 1997 as a manager at its Group Financial Services Operations. He served in a variety of positions before moving to Munich in 2013 where he served in several global positions. Bugbee returned to the U.S. in 2016 and became an EVP a year later.
He sat down with Headlight.News to talk about the company’s electrification plans in the U.S.
This interview has been edited for brevity and clarity.
Headlight.News: BMW was an early EV pioneer but then fell behind. Now, with an assortment of new models, like the i4, iX, i7 and, soon, the i5, you’re suddenly gaining traction again, even as the overall U.S. EV market flattens out.
Bugbee: Part of our increase has come from the i4. Forty percent of 4 Series sales are electrified. It’s a pretty big number. We see the BEV transformation based on customer demand. We have (offerings) in a number of segments. But the velocity of demand is for the i4. We’ll grow again in Q4, and it’s really because of product first.
Headlight.News: You mentioned recently that you’ll have six EVs produced in the United States this decade. What else can you tell us? The new i5 uses a platform that also handles gas and plug-in hybrid powertrains.
Bugbee: We’re not yet speaking about exactly which models those are but those six will be (produced) out of Spartanburg.
Headlight.News: Will those new models use a similar design or an EV-only platform like the one in the new BMW iX?
Bugbee: If you follow anything about the Neue Klasse (ED: a next-generation, electric-only model now in development) It’s a different approach That would also be integrated into … the six vehicles that are coming out.
Headlight.News: BMW is doing well in the plug-in hybrid segment which, overall, hasn’t generated much momentum in the U.S.
Bugbee: If you look at our year-to-date numbers, PHEVs are 7.5% of sales, and about half of that is the X5. But there’s also (PHEV versions of) the 3 Series, 5 Series and 7 Series. It’s an important part of our strategy. I think we have a good foothold.
Headlight.News: You’re not worried about the slowing growth in the EV market? We see some automakers, like Ford, saying they’re slowing down their EV programs.
Bugbee: It’s definitely slowing but, from our perspective, there’s still growth in the market. The question is one of supply. We don’t operate alone in the market. And you’re seeing an oversupply in the market. We’re able to flex up and down based on how we see the U.S. market developing. (But) what you describe as a slowdown is really the market going from a period of very, very strong growth to growth that’s a little more measured. We’re seeing many more customers coming in who are new to the (EV) market.
Headlight.News: Mainstream customers are clearly different from the early adopters willing to accept some of the challenges EVs pose. You mentioned in a presentation that it’s up to the BMW dealer to get those customers comfortable with the idea of buying EVs.
Bugbee: We’re dealing with that through training and education. Our dealers are buying in on electrification. If they’re talking to someone who’s never considered a BEV before, it’s a different discussion than with someone coming in who’s already had one. They already know a lot about what they want. Natural human nature is that if you’re not comfortable with something you’ll want to talk about something else. We used mystery shoppers and salespeople with the best intentions were talking about things that don’t exist, like Level 4 charging. So, we’ve spent an inordinate amount of time training our sales people.
Headlight.News: You’ve talked about “needs assessment,” having dealers understand what potential EV customers need, and addressing concerns like charging. That’s a big one now; “charging anxiety” seems as much an issue as “range anxiety.”
Bugbee: From a range anxiety standpoint, most of our vehicles are 300 miles and up. To address charger anxiety we’re forming interfaces with companies like Electrify America (and forming alliances with Shell Recharge and Tesla). And we’re working closely with our partners because we know that the reliability of the charging network as it sits today is suboptimal. We can calibrate from our side using (in-vehicle) telematic to see how many successful and unsuccessful charging sessions customers have had. From a customer satisfaction perspective it’s definitely not good. So, we’d like to talk (to charging company partners) about what we can change and improve.
Headlight.News: Here’s the thing: should potential buyers actually be worried about range and the ability to find public charging?
Bugbee: If you’re someone that has to drive 75 miles every day and your car has 280 miles range, then it could be a big problem. If you have somebody that commutes 30 miles it’s not much of an issue. I think what we have to do is educate (the consumer).
Headlight.News: You’re partnering with six other manufacturers (ED: including GM, Hyundai and others) to create your own charging network (which will have 30,000 public chargers in place by 2030). How important is that alliance? You’ve already got three partnerships in place with Electrify America, Shell and Tesla.
Bugbee: Even if all three of those worked perfectly it wouldn’t be enough. A lot of their chargers are on highways and commuter routes. That’s where our new new initiative (will work) once it becomes visible. It will waylay some of the fears consumers have.
Headlight.News: To wrap up, is BMW considering adding another U.S. plant for future EVs?
Bugbee: We’re not going to be opening up a new plant in the U.S. before 2030. There us no plan for an additional U.S. plant. This (Spartanburg) plant is the largest plant in the BMW Group network today.
Headlight.News: Okay, I really will wrap up with this: the 800-pound gorilla has shown it’s not infallible. It had a bad quarter. It’s losing market share. Do you feel comfortable you make a dent into Tesla?
Bugbee: I wouldn’t say I feel more comfortable but we are solidly in second place in (U.S.) registration data with only three models (already on sale), I think we can gain customers with the right product. We like our position.