More than 10 billion Euros or $17 billion Aussie dollars. That’s the mind boggling record investment BMW has made in its make or break Neue Klasse model range.
Debuting last Friday in Munich in the form of the second-generation iX3 electric SUV, Neu Klasse’s tech, design and engineering will reach into every corner of the BMW universe.
BMW has even built a brand new zero emissions factory in Hungary to construct the Neue Klasse. But there more plants in Munich, China and Mexico that are being upgraded for Neue Klasse variants as well.
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More than 40 new and updated EV and ICE models will be rolled out by BMW by the end of 2027 and all of them will be impacted by Neue Klasse to a greater or lesser degree.
EVs will get the full shooting match including new-gen powertrains and attendant computing ‘superbrains’, while ICE models will pick up the new styling language and infotainment upgrades such as pillar-to-pillar Panoramic Vision.
“For us at BMW, it’s the highest investment we ever did,” BMW board member for development Dr. Joachim Post confirmed.
“It’s all-over investment to bring it into the whole fleet and the technologies involved and the overall cost.
“It’s extraordinary. When you ask our Chief Financial Officer, he will tell you it’s a horrible amount.”
BMW invested this money over the five years since the Neue Klasse program commenced in 2021. Commendably, it has made a profit each of those years.
Just to put that 10 billion Euros into perspective, it’s significantly more than the annual budget of some small countries. Iceland, according to Google, had a 6.9 billion Euro budget in 2024.
But BMW’s investment in Neue Klasse is dwarfed by Volkswagen Group’s reported 2024 financial year R&D budget of more than 20 billion Euros ($35 billion).
The largest ever new vehicle development budget committed by the now defunct Aussie auto manufacturing industry was the $1 billion-plus spent by Holden on the VE Commodore program.
While Post acknowledged the stakes involved with Neue Klasse, he would not contemplate the possibility of failure.
“It will not fail,” he insisted.
“We’re building cars more than 100 years and we are in this business.
“We know how to make cars and we just believe in the strengths of our organisation with the ideas, the power of our engineers.
“Once you have driven the car and you see that’s sheer driving pleasure on a completely new level, it’s mind-blowing.
“When you combine it with the right strategies, you say, ‘I do this technology with every kind of powertrain’ … then you have not the risk that you are dependent how steep and which country electric demand is going or not.
“We are flexible to deliver the best technology for the customer needs in different countries.”
Essentially, BMW is pitching Neue Klasse as a multi-generational technology leap that future proofs the company for decades to come.
It is literally a tear-it-up and start again program.
“In 2021 we decided to make the Neue Klasse and now we’re delivering it,” declared Post
“It’s personally for me an emotional day because I was there in a different function from the first day in the project. At that time I was responsible for the product strategy. That means which car is coming when and which time.
“In our very early moment when we went to the board, we say ‘let’s make Neue Klasse’, and looking back it was the right time, the right decision we made.
“Why? At this time we have seen which technologies are coming in the future.
“Computing power, next level of battery technology, battery cell chemistry technology and ADAS systems. All these technologies came up. We say we have to jump more than only the [one] generation.
“We have to integrate electronics in a way that we have a software-defined vehicle. We make a solid architecture with four superbrains, new level of ADAS, completely new interior experience with panoramic iDrive.”
While BMW’s vast upgrade with Neue Klasse is widely seen as a response to the expanding Chinese threat that combines cutting edge battery and software tech with low pricing, Post downplayed that.
“China was not the main reason to do that [Neue Klasse]. We are coming from innovation, from technology, to say what is coming up for the future, what could be feasible, how we can be successful, because we are BMW. We stand for innovation, for futures, for functions.
“The Chinese are going abroad, especially Asia, some regions, and will also come to Europe. But to be honest, they also have to earn money for the future.
“And when you look what’s going on in the Chinese markets, not all of them are really earning money. I don’t know if they are.”
