August 4, 2025, 3:33:51 PM IST (Published) 10 Min Read Next to BMW AG’s headquarters in the heart of Munich, a museum and glass-walled exhibition center showcase classics including the 507 convertible that Elvis Presley drove during his US Army tour in western Germany. Originally painted white, the king of rock and roll had the roadster resprayed red after his female fans kept writing on it with lipstick. There’s been another BMW parked on the campus lately, hidden from view behind sets of secure doors. This one’s covered in camouflage, because the future of the company is riding on it. The sport utility vehicle, called the iX3, will be the first of 40 new or updated models that share slick software, high-performance computers and radically different design cues. Crucially, for an industry that’s been turned on its head by fast-moving Chinese manufacturers leaving even Tesla Inc. in the dust, BMW is staging a swift rollout. Within roughly two years of customers starting to take delivery of the first iX3s, technology within this new EV will be in all of the company’s vehicles. The 2026 BMW iX3 SUV. (Image: Bloomberg) “We’re 109 years old, and it’s by far the biggest single investment into one architecture we’ve ever done,” Chief Executive Officer Oliver Zipse told Bloomberg in an interview. There are more than a few spanners in the works for the global car sector at the moment. US President Donald Trump’s tariffs are forcing companies to rethink supply routes for both components and finished vehicles. China’s BYD Co. and Xiaomi Corp. are taking the world’s largest market by storm with desirable features and affordable prices. The transition to EVs is in flux virtually everywhere. Despite all the tumult that’s prompted other players in this notoriously risk-averse business to batten down the hatches, BMW is proceeding with its break-glass procedure. Zipse has tagged the upcoming lineup with the same moniker assigned to sedans and coupes that ensured BMW’s solvency and established its identity in the 1960s: Neue Klasse, or new class. Early reviews suggest the new models deserve the designation. “The product convinces,” Bernstein’s Stephen Reitman wrote in a report recapping the company’s recent capital markets day. “Our characterization of BMW as the Wayne Gretzky of the auto industry, skating to where the puck is going to be, not to where it’s been, has not changed.” New Benchmark Zipse, a BMW lifer, took over as CEO in 2019, just as Tesla was beginning to navigate its way out of what Elon Musk described as production hell. When Bloomberg asked 5,000 early Model 3 owners that year what cars used to be in their driveway, the survey found an alarming number of BMW deserters. Around that time, US consumers who had $50,000 or so to spend on a fully electric luxury vehicle had two choices: Tesla’s new Model 3, or the BMW i3. Even ardent BMW enthusiasts acknowledged it wasn’t a particularly close call — Tesla’s sedan was the larger, longer-range, faster-charging option. The same won’t be said for the iX3 that BMW will produce in Debrecen, Hungary. The company has said the SUV will manage up to 800 kilometers (497 miles) of range under Europe’s test procedure. With 400 kilowatt maximum charging, drivers will be able to add roughly enough range to get from New York to Washington, DC, after 10 minutes of plugging in. Tesla’s longest-range Model Y tops out at 622 kilometers of range and offers a maximum charge rate of 250 kW. “This will be the benchmark of the industry,” Zipse said. Neue Klasse will show that BMW “can build superior electric cars, and the rest of the market will have to answer.” Oliver Zipse in Munich. (Image: Bloomberg) Of course, the 61-year-old CEO is quick to note that a benchmark is no good without a business model. Certain elements of the Neue Klasse initiative were developed only for battery-electric vehicles — a growing segment of BMW Group’s sales, but still a minority. For every EV handed over to a retail customer in the first half of the year, the company delivered four BMWs, Minis or Rolls-Royces powered at least in part by a combustion engine. To drive down the costs of sourcing components such as the four computers that will power new infotainment and automated-driving features, as well as more basic functions like climate control, BMW will deploy this new digital nervous system in vehicles across all drivetrains. These “superbrains” will provide 20 times the computing power of BMW’s previous system. BMW developed the software for those features with the help of six hubs it's set up around the world through small ventures and small acquisitions in Portugal, South Africa, China, India, Romania and the US. Together, those sites employ roughly 5,000 software and IT workers. China Factor For all the potential upside Neue Klasse brings, the success of the project ultimately will depend on where it leaves BMW in an increasingly brutal competition with Chinese manufacturers that are undercutting the rest of the auto world. BMW and Mini’s combined sales in China slumped 15% during the first half of the year, after sliding 13% in 2024. In a market that’s quickly going electric, local manufacturers are dominating by peppering showrooms with new models at cut-rate prices. “There are market segments where you cannot be profitable,” Zipse said. “If it’s not profitable, we retract.” That said, the CEO insists it would be a big mistake for BMW — or Europe broadly — to decouple from the the world’s second-largest economy. “There is so much competency, so much innovation, so many advantages just by virtue of the sheer size and scale of China,” Zipse said. “You cannot ignore that.” Because of relatively resilient demand for its profitable combustion engine-powered models, BMW is better positioned than mass-market producers like Volkswagen AG and General Motors Co. in China. Still, the company must change the perception that Western automakers are far behind domestic manufacturers on software and battery technology. The iX3 will have to prove its worth relative to Tesla’s Model Y — priced from 263,500 yuan ($36,700) — and vehicles from domestic brands such as Xiaomi’s YU7, a new 253,500-yuan SUV that drew 289,000 orders in its first hour of availability. BMW sells its locally manufactured X3 SUV at a premium, starting at around 350,000 yuan. The company has tried to tailor its models to local tastes, integrating WeChat and offering access to a China-specific app store. It’s also put the market at the front of the line for new innovations. When BMW first brings large language models into its cars next year, they’ll be debuting in China via a collaboration with the buzzy artificial intelligence startup DeepSeek. Tesla’s Vulnerability