Picture: BMW

Munich, Germany - BMW has transformed its “i” division into a development centre for self-driving cars, a major strategic shift for the unit previously focused on making a family of lightweight electric vehicles.

While Tesla's Model 3 will hit showrooms in 2017, and as rivals Porsche and Audi are working on pure electric cars for release by 2019, BMW seems to have put them on the back burner; its next electric car is not due until 2021.

The company has changed tack after its only fully battery-powered car, the i3, failed to gain traction with the public, with only 25 000 sales in 2015. By contrast, Tesla has already taken more than 370 000 orders for its Model 3.

Now, rather than seeking to match the likes of Tesla and Porsche with a new zero-emissions sports limousine for release within the next two years, its main focus will be on developing an electric car with the next generation of technology: autonomous driving.

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In an interview at BMW’s headquarters in Munich, board member in charge of development Klaus Froelich said he had relaunched the i division in April as a unit devoted to producing cars that drive themselves.

“It is now in ramp-up stage,” he said. “We call it Project i Next.”

The revamp also follows at least three high-profile staff defections from the i division during 2016. Powertrain group manager Dirk Abendroth, product management vice-president Henrik Wenders and engineering vice president Carsten Breitfeld, head of the i8 vehicle programme, were poached by a Chinese electric vehicle startup.

As part of its autonomous driving push, BMW is hiring experts in machine learning and artificial intelligence. It is also integrating the functions of existing computer driven assistance systems such as cruise control, emergency braking, lane-keeping support and automatic parking.

Ride-hailing

With a fully autonomous vehicle, Froehlich said, BMW could launch a ride-hailing business without having to pay drivers, giving car companies a competitive edge over ride-hailing companies such as Uber and Lyft which are eroding car sales by making part-time use as convenient as ownership.

Toyota said in May it would invest in Uber, and Volkswagen announced a $300 million (R4.6 billion) investment in Gett, a smaller ride-sharing company.

Froehlich said BMW might also partner with a ride-hailing firm, particularly in markets such as China, but its strategy on potential partnerships with companies in this space was still being worked on.

Sales of highly autonomous vehicles - ones where permanent active input from the driver is not required - are not expected to gain traction until 2020, but could then rise to around nine million a year by 2025, according to analysts at Exane BNP Paribas.

Froehlich said China, the world's largest car market, was likely to be the market where autonomous cars would first emerge on a large scale.

“China is extremely fast implementing technology. Last year more electric cars were sold in China than in all the other global markets combined,” he added.

BMW is also considering expanding in the area of reserving parking spaces and electric car charging stations over mobile phones, a market which is still fragmented within countries. It has already invested in ParkNow and Parkmobile, two digital parking and payment services.

Froehlich said: “We want to be an active part of a consolidation process in this facet of the industry.”

Reuters

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