BMW is betting that it can beat Tesla to designing and distrubuting the first self-driving car.
The German automaker announced last March a five-year plan to achieve this goal, citing new partnerships with Intel and Mobileye to take drivers from the “present frontier (between ‘hands-off’ and ‘eyes-off’ driving) to the future (‘mind-off’).”
BMW bets it has the stamina and, more importantly, the cash flow, to win this race.
Marking a record-setting second quarter, BMW reported revenues were up 4.5 percent (to over $28 billion dollars) and net profits rose 11 percent (or, well over $2 billion). CEO Harald Krüger wants to use the dramatic increase in profitability to “fund innovation in power-train technologies and digitalisation,” reports the Financial Times.
Juxtaposing Tesla’s second quarter numbers with BMW’s, and Kruger’s projections are not implausible.
Tesla, the market leader in all-electric cars, has recorded cash loses of $1.1 billion since 2010 and is expected to post $1.6 billion in losses on Wednesday. BMW, which created it’s first electric car in 2011, has stated it is “making a profit on every car sold,” reports the Financial Times.
Include capital expenditures, and Tesla losses rise to some $4.5 billion. Between now and 2020, analysts at Morgan Stanley predict that Tesla will spend $14.4 billion on research and development, reports the Financial Times.
Falling car sales throughout the US could hinder BMW’s ability to reinvest profits, an essential component in accomplishing its goal.
Send tips to robert@dailycallernewsfoundation.org
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.