BMW Touts Greener Factories to Win Over Buyers, Regulators

(Bloomberg) -- BMW AG kicked off assembling its latest electric car, using the occasion to tout green credentials it hopes will appeal to buyers and regulators who increasingly demand sustainable products.

The German automaker on Friday started series production of the battery-powered iX SUV at its Dingolfing plant near Munich, which sources hydroelectric power from nearby rivers. The model is expected to go on sale for around 75,000 euros ($89,000) and is meant to challenge Tesla Inc. and Daimler AG in the luxury EV segment.

Dingolfing is BMW's biggest factory in Europe and last year produced 232,000 cars. BMW said half of the facility's output will be battery-powered models by 2025, ahead of a group-wide target for EVs to account for half of all autos sold by 2030.

Dingolfing's sustainability portfolio includes anything from “energy-efficient installations to packaging planning, through transport logistics and recycling, up to and including topics such as biodiversity and water management,” BMW said in a statement.

BMW is eager to convince investors it hasn't fallen behind in the race to develop mass-market electric cars. While the company's shares have gained about 25% this year, they're still down about a fifth from their peak in 2015.

Emissions Cuts

Chief Executive Officer Oliver Zipse is betting that investments in more sustainable production methods and a push to electrify the company's lineup will narrow the gap. At a separate event on Friday, he said that hydrogen-powered cars offer an alternative to EVs in areas where charging infrastructure isn't available.

BMW plans to cut emissions per vehicle 80% by 2030, a move that would help it avoid fines from increasingly stringent European Union emissions regulations.

Greenhouse gases from production represent a minor share of the company's overall environmental footprint, accounting for around 1% of total emissions, according to BMW's most recent sustainability report. The use of BMW vehicles by customers represents the majority of the company's pollution tab.

While BMW has said it will stick to producing internal combustion engine cars for as long as there's a significant market for them, it also forecasts that half the vehicles it makes in 2030 will be electric.