BMW research and development spend to hit record as the firm looks to electric future

Key Points
  • BMW group is to spend as much as $8.6 billion on R&D in 2018.
  • The German carmaker will unveil 20 new models this year.
  • The firm has not updated on reports of an investigation into emissions-cheating software.
The BMW X2
Mack Hogan | CNBC

German carmaker BMW Group has said it expects to spend its largest annual sum ever on research and development (R&D) during 2018.

The firm, which manufactures and sells BMW, Rolls-Royce and Mini-branded cars, is set to splurge as much as 7 billion euros ($8.6 billion) this year as it ramps up its presence in electric and autonomous vehicles.

In its annual report, released Wednesday, the BMW Group said the R&D ratio would sit between 6.5 and 7 percent of sales in 2018, above the usual range of 5 to 5.5 percent.

BMW Group chairman Harald Kruger told investors in a speech that the company was in the midst of a busy period as it prepared to release 20 new car models this year.

"The biggest model offensive in our history is currently in full swing. We are now in phase two. We will be releasing another 20 new and revised models this year," he said.

BMW Group said it expected group pre-tax profit to surpass 10 billion euros for 2018.

An employee polishes the hood of a BMW AG 7-Series sedan at the assembly line.
Dimas Ardian | Bloomberg | Getty Images

The company has set up a development campus outside Munich devoted to the development of autonomous driving; at least 100 million euros is to be spent on battery-cell research.

The firm is to present "a number" of pure-electric concept vehicles this year that are ultimately destined for series production.

Despite claiming that "our future is definitely electric" and noting a reduction of diesel cars sold in Germany and the U.K. during 2017, Kruger said the technology was still viable.

"Our modern diesels will also play a role on the road to sustainable mobility," he added.

Emissions investigation

There was no mention during the presentation of the news Tuesday that German prosecutors investigating the suspected use of emissions-cheating software had raided the headquarters of BMW in Germany as well as a site in Austria.

Germany's Motor Transport Authority (KBA) was reportedly in contact with Munich prosecutors last month about two BMW models that may have so-called defeat devices.

BMW confirmed the search Tuesday, but claimed it was the result of an error.