BMW AG is gearing up for its most significant transformation yet, launching a new electric SUV as the vanguard of its Neue Klasse platform.
The BMW iX3 is the first of 40 new or updated models slated for rollout by 2027, featuring a digital-first approach with high-performance software and redesigned architecture, Bloomberg reported.
The vehicle, set to go into production later this year at BMW’s plant in Debrecen, Hungary, will boast up to 800km of range under European test procedures and 400kW charging capacity, outpacing Tesla’s Model Y, which tops out at 622km and 250kW respectively.
“This will be the benchmark of the industry,” CEO Oliver Zipse told Bloomberg, adding that it’s the company’s largest single investment in a vehicle platform since its founding 109 years ago.
The Neue Klasse, meaning “new class”, draws its name from the sedans and coupes that defined BMW in the 1960s. This time, it signals a full-scale pivot towards electrification and software integration.
BMW plans to install its next-generation computing system, described as a “digital nervous system,” across all vehicle types to streamline production and reduce costs. This system offers 20 times the computing power of current models, powering everything from autonomous features to climate control.
According to the report, the software behind the Neue Klasse was developed across six global tech hubs, in India, China, Romania, Portugal, South Africa and the US, employing some 5,000 engineers.
The shift comes amid increasing competition from Chinese EV makers like BYD and Xiaomi, which have gained ground in the world’s largest auto market by offering sleek, affordable electric vehicles at a rapid pace.
BMW’s China sales fell 15 per cent in the first half of this year, on top of a 13 per cent drop in 2024, according to figures cited in the report. Despite these headwinds, Zipse cautioned against a full-scale decoupling from China, highlighting its innovation capacity and manufacturing scale.
Test drives of iX3 prototypes in France impressed auto reviewers with refined handling, quick traction response, and upgraded driver-assist systems — hallmarks of BMW’s claim to still being the “Ultimate Driving Machine”, only now electric.
Meanwhile, BMW is doubling down on localisation, integrating Chinese apps like WeChat into its in-car systems and prioritising China for the launch of its AI voice assistant powered by DeepSeek.
As Tesla faces pressure in the US from regulatory rollbacks under President Donald Trump, who recently signed laws weakening EV mandates, BMW sees an opening.
Zipse also took a subtle swipe at Tesla’s brand image, stressing that BMW’s focus remains on building products customers “enjoy and are proud to drive without having to justify their choice”.
Production of the iX3 in Munich will begin alongside current combustion-engine models in 2025. By end-2027, BMW’s flagship Munich plant will go all-electric, ending a 75-year run of petrol and diesel production.