The shift to producing electric vehicles (EVs) is proving costly for BMW, driving the automaker to lean on its high-end vehicle models to stay profitable, according to Automotive News Europe. In 2020, the German auto giant plans to deliver up to 145,000 7-series sedans, 8-series sports cars, M8 performance coupes, i8 plug-in hybrid sports cars, and X7 SUVs. 
This delivery number is up 32% from the 110,000 premium vehicles BMW is expected to deliver in 2019, and over twice the 65,000 premium vehicle deliveries it made in 2018. BMW is pushing for more deliveries for these pricier models to help prop up profits as it awaits returns on significant EV-related R&D investments. As of April 2019, BMW plans to commit at least $6.5 billion to develop EVs, including $4.5 billion on EV battery technology, according to Reuters. BMW's investment is part of its recently expedited effort to produce 25 electrified models by 2023 - the company initially planned to meet the goal in 2025.
However, BMW's strategy doesn't come without risks. Relying heavily on premium new car sales could be disastrous for BMW should fears of an impending global recession come to pass. During recessions, consumer interest in new vehicles tends to fall, according to the US Bureau of Labor Statistics. Additionally, wealthy consumers - like those who would purchase BMW's premium vehicles - spend less.
Despite the threat of a recession and worse-than-expected car sales in 2019, BMW CFO Nicolas Peter still believes the company's premium segment will experience growth next year, per Automotive News Europe. What is unknown though, is whether this growth will be enough to hold over BMW until the company begins to see returns on its EV investments.
BMW isn't the only company taking on risks with its EV investment strategy. Heavy investments in retooling factories for electric drivetrains are leading to fewer jobs in the auto industry because, in part, EVs require fewer parts to assemble. For example, the Fraunhofer Institute for Industrial Engineering IAO found that by 2030, a shift to EV production by automakers could result in 75,000 fewer jobs in Germany related to components such as internal combustion engines and gearboxes, which aren't needed in an EV.
Due to changing labor needs, automakers are risking alienating employees at a time they still need them to produce traditional gas-powered vehicles. This is a risk that GM took and is currently paying for - the company is experiencing a labor strike, partially in response to concerns over the shift to EVs. The strike has already cost GM over $1 billion.
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