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Autonomous Vehicles Harald Krueger

Published on July 7th, 2019 | by Dr. Maximilian Holland

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Tesla Disrupts — BMW Boss Throws In The Towel

July 7th, 2019 by  


BMW CEO Harald Krüger has resigned his post, citing “enormous changes, which have brought about more transformation than in the previous 30 years.” He is referring to the rapid rise of Tesla’s compelling electric vehicles, which are crushing BMW’s car offerings in the US market and are now threatening to disrupt sales in key Europe and Chinese markets as well.

Harald Krueger Harald Krüger / BMW press image

Krüger, 53, leaves the post after less than 5 years in office. Commentators feel that his inadequate and indecisive response to the fast shift of the premium segments towards EVs, especially the rise of Tesla, are a large part of the reason for him leaving the post. Krüger said at the recent BMW Group annual general meeting, held in May:

“At this point, no one can reliably predict how quickly electromobility will progress, or which drive train will prevail.”

Whilst this makes clear that Krüger has deemed it wise to remain on the fence, BMW’s sedan sales have fallen off a cliff in the US market over the past 12 months directly as a result of Tesla’s fully electric Model 3. As we predicted early on and have frequently documented over the past year, the Tesla Model 3 has stolen significant US market share in the premium sedan segment.

Sales of BMW US passenger cars in the 12 months through June 2019 were just 84,467, down 14.5% from 98,752 a year ago. Tesla meanwhile sold around 184,000 Model 3 sedans in the US over the past 12 months, ramping up from just a few thousands over the previous 12 months. Tesla also sold around 22,000 Model S sedans in the US in the 12 months ending June 2019.

Tesla Model 3 / Image courtesy: Tesla

Thanks to the steep production and delivery ramp of the Tesla Model 3 in 2018, overall US sedan sales figures of the world’s leading BEV maker are now over twice the volume of BMW’s US car sales. BMW still does well in the SUV space in the US, but the company certainly knows that its SUVs will come under similar assault in the US in late 2020, with the introduction of the Tesla Model Y.

Against this backdrop, for Krüger to say as recently as May 2019 that, “no one can reliably predict how quickly electromobility will progress,” displays neither the awareness nor leadership expected of a CEO at this level.

There are two potential candidates to replace him: Oliver Zipse, BMW’s head of production, and Klaus Fröhlich, head of development. We recently saw that Fröhlich is, like Krueger, unconvinced about the shift to EVs. It would therefore make little sense for Fröhlich to step into Krueger’s role. The German newspaper FAZ has Zipse down as the favorite to take over the CEO position.

BMW i3 / Image courtesy: BMW

BMW had an early start in the EV space with the release of the i3 in 2013, but has since squandered its position. Amongst frequent rumors in the intervening years of more BEVs “coming soon,” nothing new has actually materialized. Meanwhile, key BMW staffers who worked on the i3 program, including Carsten Breitfeld, Benoit Jacob, and Dirk Abendroth, left the automaker for Chinese EV startup Byton. (Breitfeld recently moved from there to another EV startup, Ioniq.) This exodus of key EV staffers happened back in 2016, on Krüger’s watch, and was in large part due to BMW’s retrenchment on its initial EV plans.

A Mini-branded BEV city-car (with modest range by 2019 standards) is planned for release later this year, but a new BMW-brand all-electric vehicle will not arrive until the planned 2020 launch of the BMW iX3. The i4 and iNEXT are slated to follow in 2021. Several other premium automakers (including Jaguar, Audi, Porsche, Mercedes) are now ahead of BMW in their BEV offerings and are at least trying to offer some response to Tesla’s overwhelming EV dominance. The timing and volume of BMW’s future EV production plans will obviously be a key issue for Krüger’s replacement to grapple with.

Refresh yourself on BMW’s most recent misleading statements about the viability of full EVs. BMW will certainly need to radically change its tune to have any hope of staying in the race. 
 
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About the Author

Max is an anthropologist, social theorist and international political economist, trying to ask questions and encourage critical thinking about social and environmental justice, sustainability and the human condition. He has lived and worked in Europe and Asia, and is currently based in Barcelona. Follow Max on twitter @Dr_Maximilian and at MaximilianHolland.com, or contact him via LinkedIn.



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