BMW Unwraps Next-Generation EV to Take on Tesla, China’s BYD

BMW AG presented the first prototype of its future electric-vehicle lineup, ringing in a new stage in the fight to catch up to Tesla Inc. and defend sales in its most important market China.

The Vision Neue Klasse concept car, on display at next week’s IAA show in Munich, shows off BMW’s dedicated EV underpinnings due in 2025 — around the time Mercedes-Benz Group AG is introducing its new battery-powered models. Software issues have delayed similar architectures from Volkswagen AG, pushing back key Porsche and Audi vehicles.

With the sleek coupe, BMW is veering away from a decades-old tradition of advertising mainly the performance of its ‘ultimate driving machines.’ Instead, it’s touting a digital display projected onto the entire width of the windscreen as well as software that can process voice commands and hand gestures. The move is a nod to customers in China, who are increasingly going for homegrown brands such as BYD Co. and Nio Inc. that have been better at building EVs with gadgets geared to local tastes.

The Neue Klasse “sets our course for the next decades,” Chief Executive Officer Oliver Zipse said.

BMW, Mercedes and Audi long dominated sales of premium combustion-engine cars in China, but have been caught on the back foot by the country’s rapid shift to electric vehicles.

BYD this year dethroned VW as China’s top-selling automaker, and Mercedes slashed prices for its flagship electric sedan there late last year after disappointing sales. Electric cars and plug-in hybrids are expected to make up 90% of the world’s biggest auto market around the end of this decade, adding urgency for Western premium brands to accelerate their offerings. A price war in China started by Tesla has also upped the pressure.

BMW is growing in China, especially on electric cars, and the carmaker isn’t affected by the price war because of its positioning in the premium segment, Zipse told reporters on Saturday in Munich. The Neue Klasse, he added, will be even more profitable than the company’s current lineup of battery-powered cars.

BMW’s top-end Neue Klasse models will have a range of as much as 800 kilometers (497 miles) and charge from 10% to 80% in under half an hour, numbers that likely won’t make them best in class. Last year, an electric prototype from Mercedes drove more than 1,000 kilometers on a single charge.

But BMW still ranks second in China when it comes to tech features in its cars, according to a recent consumer survey by consultancy AlixPartners. BMW came in behind Geely’s Zeekr but ahead of Xpeng, Tesla and VW.

Despite the new focus on digital features, BMW won’t entirely throw its brand traditions overboard. While most EVs these days offer swift acceleration, the Neue Klasse will be more fun to drive at higher speeds than many competitors, according to Zipse.

“We still believe that we can make a difference in the dynamics of the drivetrain,” the CEO said.