BMW looking to cut costs to shift focus to electric vehicles

BMW reportedly is slashing costs on parts as it starts to focus more on electric vehicles, according to an article in Bloomberg.

The automaker said it will save more than $2 billion each year on components as it shifts its focus to electric vehicles, the article said. The company plans to have at least 12 different electric car models on the road in the next eight years. In order to do so, it is slashing its parts budget by 5 percent, the article said.

BMW and several other automakers believe that electric vehicles could comprise 25 percent or more or all vehicle sales in the next ten years, according to Bloomberg. The article notes that electric cars are far less profitable for manufacturers at this point in time.

To cut costs, BMW plans to reduce the number of custom options available on the vehicles. The company will also find ways to cut costs on building operations to help save more money. To raise profitability, the company plans to expand its high-end offerings such as the X7 SUV and the 8-Series coupe, the article said.