Once ridiculed, BMW is now proud of not pouring all its money into electric cars and then being ‘disillusioned’, affirming that ‘the wind has changed direction’

“Electricity is a dead-end technology. That should be obvious now,” CEO Oliver Zipse said at BMW’s annual meeting.

Fortune reported that BMW CEO Oliver Zipse recently said that their strategy of slowly approaching electric vehicles (EVs) has proven to be correct amid the market’s “disillusionment” period.

Instead of rushing into producing only EVs like many competitors, BMW still maintains a variety of technologies: traditional internal combustion engines, hybrids, EVs and even hydrogen fuel cell vehicles expected to launch in 2028.

“We have been clear on this issue, even when faced with major obstacles. Now the wind has turned in the company’s favor,” CEO Zipse confidently said.

Sharing the same view, market research firm Gartner calls the current period a “disillusionment period” when new technologies that once caused a stir and were expected to change the entire market do not achieve the expected results.

Similar to Toyota, BMW was one of the earliest companies to predict that electric vehicles would face development difficulties.

For years, executives at the German luxury automaker have warned that car buyers won’t convert as quickly as predicted, despite all the excitement surrounding Tesla.

Now that the wind has changed direction, BMW has told shareholders that it will stick to its commitment to offering customers a wide range of options including internal combustion engine cars, hybrids and even hydrogen fuel cell cars with the first model due to launch in 2028.

BMW believes that no single technology is suitable for all markets and should maintain a variety of powertrain options to accommodate different regional shifts.

“Technological openness also means keeping up with the market, because markets develop at different speeds. Electric vehicles are a dead end technology. That is now clear,” CEO Oliver Zipse said at BMW’s annual meeting.

Wind change direction

Five years ago, a number of brands including Mercedes-Benz, Volkswagen and Volvo announced ambitious targets for when they would switch to electric vehicles. By contrast, BMW’s reluctance to join the electric car trend has led rivals like former VW CEO Herbert Diess to criticize the company for slowing progress.

But in just a few years, the electric car craze initiated by Elon Musk quickly encountered challenges, and this is when car companies like BMW began to have a say.

BMW actually got its start in electric cars with the i3, a small city car with a lightweight but expensive carbon fiber body that was supposed to be a trend-setter but ended up being a financial failure for analysts and investors.

According to Fortune, established car brands have now realized that electric cars are not as “beautiful” as Elon Musk described them as they struggle to convince their customer base of the advantages of electric vehicles.

In the early 2020s, this electric car promotion seemed reasonable when Tesla was popular and CEO Elon Musk suddenly emerged as a successful businessman, becoming a world billionaire for daring to realize his “dreams”.

In 2020, Tesla surpassed all its competitors in the auto industry to become the world’s most valuable automaker despite selling only half a million vehicles that year.

The reason is understandable, investors believe in Elon Musk’s “dreams” instead of actual sales.

The craze has led BMW’s rivals to pour billions into developing dedicated designs capable of powering a wide range of electric vehicles of all shapes and sizes, such as the EVA2 at Mercedes-Benz and Volkswagen’s vaunted MEB platform.

But after a few years, the results left automakers disillusioned as they struggled to explain the technology’s advantages to skeptical customers.

Automakers and consumers alike are beginning to realize that there are still many challenges surrounding the development of electric vehicles that need to be further studied, including whether owners can be electrocuted while charging their cars in the rain.

Mercedes, VW, and Volvo once set a goal of switching entirely to EVs, but now they have had to adjust the deadline because customers are not ready.

Fortune magazine said Tesla’s success was partly due to investor enthusiasm for Elon Musk’s dreams, and partly because the company caters to a customer base that is primarily progressive and eager to be the first to test the latest technologies.

Already, many traditional companies like Mercedes and Volvo have had to abandon their ambitious electric car sales targets.

Disappointed

According to Fortune, slower-than-expected electric vehicle sales have disappointed many and also affected Tesla.

In 2024, Elon Musk’s empire had to adjust down its 2030 sales target as Model Y sales fell for the first time in history as well as estimated a dismal result in the first quarter of 2025.

The cause comes from many factors.

First, China, the world’s largest electric vehicle market, is increasingly squeezing out Western brands that were hoping to successfully transition from traditional internal combustion engines to electric vehicles but ended up being slow to catch up and losing out to local brands like BYD.

Even Tesla, which was third in 2024, dropped to eighth in China last month.

In the US, the government is no longer willing to subsidize the purchase of a more expensive EV with a $7,500 federal tax subsidy per vehicle.

Similarly, Europe has also gradually become indifferent to the electric vehicle industry.

Although Norway has a high rate of electric vehicle adoption, growth is slowing, while the eurozone’s third-largest economy, Italy, has just 4% of its new car market share being electric.

Clearly, the electric vehicle industry is facing many challenges, but even BMW cannot completely abandon this new technology. BMW’s mid-size electric car iX3 is expected to go into production later this year in Hungary at a dedicated factory for electric cars.