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BMW warns profits will fall, plans $13.6 billion in cost-cutting

FRANKFURT, Germany — BMW said Wednesday that profits in 2019 will be "well below" last year's, and it will cut 12 billion euros ($13.6 billion) in costs by the end of 2022 to offset spending on new technology. The company said profits would be eroded by higher raw materials prices, the costs of compliance with tougher emissions requirements and unfavorable shifts in currency exchange rates. The Munich-based automaker also faces increased uncertainty due to international trade conflicts that could lead to higher tariffs. "Depending on how conditions develop, our guidance may be subject to additional risks; in particular, the risk of a no-deal Brexit and ongoing developments in international trade policy," said Chief Financial Officer Nicolas Peter. The company forecast a profit margin of 6 to 8 percent for its automotive business, short of the long-term strategic target of 8 to 10 percent, which it said still "remains the ambition" for the company if given "a stable business environment." BMW said it had no plans for layoffs even as it outlined cost saving measures that include dropping half of its engine variants as it seeks to reduce product complexity. The BMW, Mini and Rolls-Royce brands are to get a single sales division. Peter said that given the headwinds to earnings, "we began to introduce countermeasures at an early stage and have taken a number of far-reaching decisions." The company said the measures were needed "to offset the ongoing high level of upfront expenditure required to embrace the mobility of the future." Automakers around the world have faced heavy up-front costs for technology expected to change how people get from one place to another in the next decade. Those include electric cars and renting cars through smartphone apps. Yet the returns from such investments remain uncertain and auto companies face competition from tech firms such as Uber and Waymo. BMW made 7.2 billion euros ($8.2 billion) in net profit last year, down 17 percent from 2017, when it booked a gain of $1 billion from U.S. tax changes. The company faced headwinds from increased tariffs on vehicles exported to China from the United States. It also suffered from turmoil on the German auto market when companies faced bottlenecks getting cars certified for new emissions rules. BMW faces uncertainty from U.S.-China trade tensions that could result in new tariffs if talks do not result in an agreement. U.S.

Psychology can wipe out 20-25% of your EV's range

There are two primary takeaways from a recent study of electric-vehicle driving habits in Germany. One: an electric vehicle with 25 percent of its battery charge left creates the same reaction in drivers as the fuel needle on "E" in a gas-powered car. Two: familiarity breeds comfort. The study, conducted by Germany's Technische Universitat Chemnitz and funded by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, put some real numbers on the concept of "range anxiety." According to Green Car Congress, that anxiety truly kicks in when there's less than a quarter of the driving range left on an EV's battery and the study found that a typical car's range is "shortened" by a 20 to 25 percent "psychological safety buffer." If we take the popular Nissan Leaf as an example, the official 84-mile single-charge range is really closer to 63 miles in the head of the driver. The longer the driver spent in the EV, the shorter his mental buffer became. The study was culled from data involving just 79 drivers who tooled around Berlin in Mini E EVs for about six months, collectively putting a quarter-million miles on the electric vehicles. The good news is that the longer the driver spent using the EV, the shorter his mental buffer became, which meant he could comfortably get more miles from the car. So, to all you EV advocates out there, know that once drivers spend some time with an EV, they get more and more used to what the car can do. It's a lesson we've learned before. Just remember that to new EV drivers, the single-charge range is a lot smaller than the one old-timers see.

2020 Mini Cooper models see a price jump across the board

No matter what Mini model you may have had your eyes on, they all get more expensive for the 2020 model year. Most new Minis increase by $1,500, including every version of the 2020 Mini Hardtop (two-door and four-door versions) and the convertible. As such, the cheapest Mini, the 2020 Mini Cooper Hardtop two-door, now starts at $24,250 including destination fees. Pricing for the Clubman and Countryman models varies more. The Clubman actually drops the base non-S version, leaving just the S and and John Cooper Works versions. The S trims jump $2,000, while the John Cooper Works Clubman climbs $3,500. That bigger price increase does also come with a substantial increase in power and torque, going from 228 horsepower and 258 pound-feet of torque to 301 horsepower and 331 pound-feet of torque. The Countryman retains all its models, and most have the $1,500 price increase like the smaller Hardtop and Convertible versions. The exceptions are the Cooper S E Countryman plug-in hybrid, which only increases by $1,000, and the John Cooper Works which jumps $3,600. The hybrid gets a bigger battery, going from 7.6 kWh to 9.6, bringing electric-only range up 4 miles to 16, and the John Cooper Works Countryman gets the same 301-horsepower engine as the Clubman. Aside from the John Cooper Works and hybrid drivetrain upgrades, there aren't many other major changes to the Mini lineup. All Minis now get a group of driver assist features called "Active Driving Assistant," which includes adaptive cruise control, automatic high-beams and automatic emergency braking. Also, the six-speed automatic available on Cooper and Cooper S models is now being replaced with a seven-speed dual-clutch automatic. For the full breakdown of prices, check out the chart below.