BMW gains ground in bid to improve the image of plug-in hybrids

BMW's effort to improve the image of plug-in hybrids is gaining traction as it eyes expanding an emissions-reducing pilot program for the electrified models to more European cities.

BMW is relying heavily on its growing lineup of plug-in hybrids to cut its fleet CO2 emissions in Europe to avoid stiff EU fines. Plug-in hybrids, however, have faced criticism because even though they are designed to be driven electrically, most are not.

To address this problem BMW launched the Electric City Drive plan in Rotterdam, Netherlands, to encourages plug-in hybrid drivers to switch off their combustion engines and use emissions-free battery power when downtown.

Participants earn points for each kilometer driven electrically and can compete with one other for rewards. BMW tested various incentives --including cash -- but found that by creating competition it boosted awareness, which helped reduces emissions.

"We believe it should serve as a model, since it intelligently addresses the problems in the urban areas," BMW Group Chief Financial Officer Nicolas Peter told Automotive News Europe. "We want to present this interesting concept to mayors of other cities." Officials in cities such as Brussels and Antwerp, Belgium, are now examining the Rotterdam results to see whether a similar approach could be adopted in their municipalities.

BMW says that studies show plug-in hybrids with a range of at least 60 km are driven just as far in electric mode as full-electric cars. For commuters concerned that combustion engine cars could be banned in cities, yet only have the means to own one car, plug-in hybrids appear to be a win-win. The problem is many were purchased as corporate cars because of generous tax incentives. The operators of those cars typically have their fuel costs paid by their employer, reducing the likelihood that they would recharge them.

Due in part to their misuse, the Dutch government dramatically lowered incentives for plug-in hybrids. This caused Dutch plug-in hybrid sales to decrease from an EU-best 40,000 in 2015 to just 1,150 two years later. Meanwhile, full-electric sales rose rapidly because they continued to qualify for big subsidies. The picture is the same Europewide. Last year plug-in hybrids were outsold for the first time by their full-electric cousins.

'Used the right way'

"The image of plug-in hybrids hasn't been that great in the past," a BMW insider said. "It benefits us if we can find out how to change that, how to prove they can be used the right way."

The cars participating in the Rotterdam project have linked their dual powertrain to the GPS system. As soon as the transponder recognizes the vehicle has entered a predefined area, such as the city center, it requests the driver to switch to zero-emissions propulsion.

"Today it's manual because there is no law in place," BMW CFO Peter said, "but in the future it could be done automatically via software. That means as soon as you drive into the city, it switches over to electric and it cannot be switched back as long as you are downtown." Once the car has left the geofenced area, the electric motor can decouple and the combustion engine takes over again, recharging the battery in the process.

Last year BMW's average CO2 emissions in Europe were flat at 128 grams per kilometer. The automaker only expects a slight improvement this year as sales continue to decline for diesels, which emits less CO2 than gasoline-powered models, and demand remains weak for electrified models. That leaves BMW just two years to bring its average CO2 down to 101g/km or face costly EU penalties.

In March, BMW CEO Harald Krueger called 2019 "our year of the plug-in hybrid," as the automaker prepares to add models such as the X5 xDrive45e, which has an electric-only range of 80 km before switching to its inline-six-cylinder gasoline engine.

"[Plug-in hybrid] technology offers a pragmatic approach that goes a long way toward improving air quality in cities quickly," he told reporters in March, adding he drives a plug-in hybrid.