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Everything Electric Podcast
Is Petrol *Ban* a Massive Mistake? And how has BMW engineered around it?
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- [00:00]
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- [00:06]
Glenn Schmidt
Another pina colada?
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Podcast Host (Event Announcer)
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- [00:16]
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- [00:41]
Glenn Schmidt
Even though perception is always important for humans, if we look at the fact there's no reason why sustainability should no longer be a top priority. Because the state of the planet has never been worse than it is now and so it still needs to be the number one priority.
- [00:59]
Imogen (Podcast Interviewer)
Hello and welcome to another episode of the Everything Electric podcast, where today I'm catching up with Glenn Schmidt, VP of Global Sustainability at BMW. And in our conversation we spoke a lot about how sustainability is the key to resilience within an organization and should be the thing that is connecting us in an otherwise divided world. However, many of you listening will be thinking, hmm, the same BMW that are also exploring a multi pathway or a multi powertrain pathway? Yes, the very same. And we do explore that as well. Thinking about how on earth does an organization like BMW navigate the path towards sustainability and electrification whilst also sustaining its current workforce? Very controversial indeed and hopefully a good source of debate in the comments. I have absolutely no doubt. So all of that to come. But first a very quick advert break.
- [01:58]
Podcast Host (Event Announcer)
Our three free YouTube channels on EVs and clean energy tech are funded by our fun packed test drivetastic events in the north west and Greater London and our events down Under. Next up Everything Electric heads to Cheltenham and then Twickenham. All events include a B2B EV day and commercial vehicles too.
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Imogen (Podcast Interviewer)
Glenn, thank you so much for joining us on the podcast today. I guess important question first, could you just describe who you are and what you actually do?
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Glenn Schmidt
Yeah. Thank you very much for the opportunity. Great to have this conversation. My name is Glenn Schmidt, I'm originally from Vancouver, Canada. So I was born and raised on the west coast, beautiful west coast of Canada and I moved to Germany 30 years ago and I've been working in the German automotive industry since then and I've been with BMW now for 21 years. Time really flies and I had a lot of interesting jobs. My last job I was responsible for external and government affairs and in my new role which I've had for about a year now. I'm responsible for sustainability within the BMW group. But of course, sustainability is everybody's responsibility. But I try to coordinate things and my team kind of ties together all the strategic elements that you need for sustainability.
- [03:12]
Imogen (Podcast Interviewer)
Well, I mean, there are a couple of things there. Firstly, Vancouver is maybe my favourite place in the entire world. We've been lucky enough to film a lot of episodes there over the past few years and I just. Yeah, it's incredible. The other thing I just want to mention is that whilst 21 years, I'm sure there's many people listening who think that that's a long time, that's probably kind of slightly middle of the road when it comes to OEM terms. And I suspect you have colleagues who've been there for 30, 30 plus years.
- [03:42]
Glenn Schmidt
That's true. I mean, whenever I'm in meetings with BMW colleagues and we do this round of introduction and often I will kick off and I'll say, I've been with BMW for 21 years, but it doesn't take very long to have somebody in the meeting who says, well, I can top that. I've been with BMW for 25 or for 30 years as well. Yeah. I like to always coin it this way. Once you join BMW, you don't need to leave BMW and it's a fantastic company and it offers a lot of, lot of different exciting opportunities. And, you know, if you want to have a different job, then you don't really need to be leaving BMW because, you know, you can go into international roles, you can go into strategic roles, you can do operative roles in terms of production. You know, there is almost really, no, let's say professional trade that you can't find within an OEM like this. I think this is one of the things that makes the automotive industry so exciting and so challenging is it's, it's an integrator. There are just so many different industries that kind of come together when it comes to building or designing, building and selling a vehicle. And it's a global industry as well, so there's an international side to that. And yeah, BMW really has all of these facets.
- [04:51]
Imogen (Podcast Interviewer)
Well, I think, I think you put it absolutely perfectly there that the breadth of the automotive industry is so interesting because it's one of the only industries that is absolutely incredibly complicated, but can also span or is impacted by geopolitics, by just everything that's going on in the world. And at the same time is a consumer good and has to be a product that people really fall in love with, and people can immediately understand what different products are, what they say about people, what people aspire to have, et cetera, et cetera. So it's a hugely exciting industry. You've obviously seen a breadth of different roles within it. Your most recent role, of course, being sustainability. And that is what we want to spend a big chunk of the rest of the discussion talking about. So sustainability, I mean, it's an incredibly broad term. It means all manner of things. What does it specifically mean at BMW? And I suppose in your sort of performance review, if you would have one, what's your kind of KPI or your objective?
- [05:54]
Glenn Schmidt
Well, I think one of the fundamental points of sustainability has been and still is decarbonizing, right? So offering solutions to combat global warming, that's still very much at the core of what we do. And BMW's conviction there is you need to be taking a holistic approach. So when it comes to the vehicle, don't just look at the tailpipe, don't just look at the product itself, but also take a bolder and take a broader view of things. Where is the vehicle coming from? What are the raw materials that you need? How were they extracted and produced? How is the vehicle being produced? And then later on, of course, how is the vehicle being used? So that holistic approach, I think, is a very important element as well. Then of course, there's a second dimension of sustainability, and that's when you think of esg, it's the S. It's the social element as well, which I think is turning into also the social economic element as well. BMW group employs over 150,000 people in many nations around the world. How is the BMW Group contributing to society? What are our concrete activities? So that's one element as well. And then there's of course, the G, right, which stands for governance. How are you governing this? What targets do you have for the organization? And how do you coordinate a sustainability community at a global level within such a complex corporation? So sustainability in its narrow sense is the environmental aspect, but in its broader sense is much larger. It's how we as a global corporation, with our suppliers, with our employees, and with all of our partners around the world, how we engage. And I think one way of looking at it that really kind of captures things quite nicely, and at first glance, it may seem like a bit of a contradiction, is sustainability and competitiveness. These aren't contradictions, but these are two sides of the same coin, as you would say, two sides of the same equation. If a company is sustainable in terms of the way it operates, it's also competitive as well. And I think it's fair to say that sustainability is coming under a certain degree of pressure in a period. And you referred to this as well, Imogen. Where the world is turning geopolitical, inward, looking more regional, where existing business models or business models that have been successful for many decades are coming under strain, where it would be easy to say, well, we need to be focusing on other things, competitiveness. Let's put sustainability in the backseat for a while. I think that's the true challenge and also the conviction to say, wait a second, sustainability, if you're doing it correctly. Easier said than done, of course. But sustainability is, it's a competitive value. It's something that should be not just added onto your business model, but that should be ingrained in your business model. And it's always easy to be in podcasts like this or to be on the stage and to talk about all the shiny and glossy things about sustainability. It's a lot of hard work. It's also sometimes resistance within the organization. But at the end, BMW has often been able to find good solutions that are sustainable at their core that prove to also be successful in the market.
- [09:38]
Imogen (Podcast Interviewer)
Well, there are so many things there, but I just guess I just want to pick up on that fact that like sustainability can be something that's deeply competitive and can make products infinitely better. And really, when we talk about sustainability in those terms, what we're actually talking about is resilience. And resilience feels like a slightly more palatable world in this climate today than sustainability, which think gets a lot of people's backs up. They. They tend to associate it with this sort of slightly polarized narrative that's playing out when actually we're just talking about making sure that businesses can survive in a really resilient and healthy kind of way, I suppose. Okay, so there's a couple of things here. We've got how the products are actually sourced, manufactured, used, and then recycled at the end of their life. We've also got some aspects of sort of building that resilience. What does the fabric of an organization look like? And then governance. But let's start with the vehicles themselves, because we know well many people are extremely excited about the BMW iX3, the new BMW iX3, for a multitude of reasons, not least the fact that it's got 500 miles range, it looks fantastic, the tech is amazing, et cetera, et cetera. But there are many, many things that I'm sure as an organization, you're Extremely proud of, from a sustainability perspective. And I wonder if you could share some of those.
- [11:05]
Glenn Schmidt
Yeah, thank you. I mean, you've. Sounds like you share our excitement as well. And the BMW IX3, it's the first vehicle of what we refer to as the Neue Klasse. And the Neue Klasse is a vehicle architecture. But it's. It's more than just an architecture. It's also a whole suite of technologies that we've introduced with the iX3 that we're also rolling out. And if you start, I guess, with the positioning of the Neue Klasse, there were sort of three elements in the early strategic phase, but they also played a really big role also in shaping how the vehicle and the architecture is positioned. One of them is electric, so it's about electric driving. The second point is digital connectivity, new levels of connectivity. And the third element is circularity, sustainability. So this new vehicle architecture, this whole new generation of technologies is also positioned around sustainability. And it's the first time where the BMW group has, from the very first moment, from the. That first sheet of white paper that designing and developing a vehicle from scratch has baked in sustainability into the concept as well. And there are a number of highlights I think, that we can touch on briefly. One of the things, and this is something that the organization is very proud of, is the BMW IX3 has a secondary raw material quota of one third. That means one third of the vehicle is secondary, and that adds up to over 700kg. Of course, easy math to then calculate what the weight is of the vehicle in total. But electric vehicles are heavy. And I think this is an important point. Often we say to our customers, wait a second. Just because it's one third secondary doesn't mean that it's used. You're getting a very modern, very sleek vehicle. That's an important point. The other point that we also like to stress is comparing the vehicle also to other drivetrain technologies and taking that holistic approach. And that holistic approach was really how the vehicle was designed. So how do you design the vehicles so that you can recycle it easily? How do you incorporate the suppliers? Because 70% of the value of a vehicle is coming from suppliers. So this is a route that you can go on your own. You need to be mobilizing and working together with your supplier base, then also thinking about how the vehicle itself is being produced in the plant, how can you reduce CO2 and make that sustainable? And then all the way down to the use phase of the vehicle as well. How is it getting used so taking that very holistic approach, and you know, we always say every gram of CO2 counts, every ton of CO2 that you don't emit is a, is a good ton of CO2 that's not being emitted. So at first glance you would always say, well, electric vehicle, because it's zero emission, a tailpipe, it's sustainable. But you really need to take a look at the entire life cycle. And what we've done with the BMW IX3 is calculated the overall product CO2 footprint of the vehicle and compared it to a conventional BMW X3. And here you have to be of course transparent because an internal combustion engine vehicle emits less CO2 during the supply chain phase during the production than a battery electric vehicle. But we've taken a lot of innovation into the production and supply chain phase so that we've been able to reduce it by about 35% compared to not doing any activities in sustainable innovation. And then if you look at the entire product span and usage phase of the vehicle, and we calculate 200,000 km overall, the BMW ix3 has a CO2, if you will break even point compared to the BMW X3 conventional vehicle after one year. So after one year of driving the BMW IX3, you are emitting less CO2 than the conventional counterpart. And that transparency is something that a lot of customers appreciate. Certainly the fleet customers appreciate this as well, because fleet customers and over 50% of our customers in Europe are in some form fleet customers purchasing vehicles as company cars or for larger fleets or for rental, are managing CO2 of their fleets. So that level of transparency when it comes to emissions, the data driven approach that we have, and at the end of the day arguing it and making that point to our customers and to stakeholders is something that makes this concept quite distinct and unique because we've never taken it to this extent.
- [16:13]
Imogen (Podcast Interviewer)
Oh my goodness, I have so many questions. I'm like, okay, which thread shall we pull on? Well, I guess my first question perhaps is that with a third of the materials being recycled, presumably that also can change what your supply chain looks like from a regulatory perspective. So, for example, if those materials have been recycled within Germany, then that's a domestic sourcing of that material. So how much has anticipation of future regulations and existing regulations shaped the necessity to also do that above and beyond doing the right thing from a sustainability perspective,
- [16:54]
Glenn Schmidt
I think that question, because a vehicle is very complex, very complicated, and consists of a lot of different materials and material groups, it's difficult to answer that on an overall vehicle level. I think we need to be making that distinction. So let's take aluminum, for example. The BMW iX3 uses aluminum rims. They're made of 70% secondary material, secondary aluminum. There you can really reduce the CO2 immensely. And the market for secondary aluminum is quite established. Right. Then there are other product groups like for example, the plastics. And we have that. It's an interesting play on words. It's called the frunk. So it's the front trunk, the frunk of the BMW iX3, which is used as a storage compartment for the charging cable. There we're able to reach a 30% secondary material quota using recycled ocean plastic. This is just to make it clear to all the listeners, this is not plastic that we're retrieving from the ocean, but this is plastic that we're purchasing from fishers around the world to prevent it from going into the ocean. There we're able to reach 30% for the franc, which is the highest that you can possibly do. Because with plastic you have a lot of degradation, right? And you have, you can't maintain the level of quality that you need for the automotive grade components that you're, that you're using. And when it comes to the battery there, we're around 50% secondary raw material quota when it comes to the lithium, the cobalt as well as the nickel as well. And we're trying to close the loops in Europe, but we're at the start of battery electric vehicles, right? So there still is mining to extract these minerals, but the intent, the strategic intent is to close the loops for a number of reasons, in terms of resilience, in terms of protecting the environment, reducing CO2. So they're a complicated answer to a very simple question that you asked, Imogen. And then the other question that you have, what is it sort of chicken egg? Is it the strategy or is it fulfilling regulations? Right. And in an ideal world, you would say business is coming up with the business case and it's inherently sustainable. And then you would regulate where you need to be regulating in an imperfect world, and we've had this unfortunately in Europe for a long time, is you're trying to regulate the future that you want to do it, and you're relying more on bands than you are on empowering and creating the supply chains. And then you're creating unnecessary roadblocks. So the diplomatic answer to your question, Imogen, is it's a mix of both, right? It is, of course, and if I look at circularity, it's thinking of circularity in broader terms, not just to reduce CO2 but also to have resilient, robust supply chains. And that space is regulated and will continue to be regulated in the future. So that of course you're prepared for that regulation when it comes.
- [20:14]
Imogen (Podcast Interviewer)
So I've got two questions which I suppose is slightly more existential questions and they won't be unique to BMW. I think every single car company is having the exact same debate. But if we look at something like the new BMW iX3, it's an incredible machine. As we said, the stats are extraordinary. 800 volt architecture, 500 miles range, et cetera, et cetera. And I know that our audience will be thinking two things. On the one hand, they'll be thinking fantastic. 800 volt architecture means that you've got thinner cables, less cooling requirement. That's a lighter vehicle, it's a more efficient vehicle. At the same time, 500 miles of range is lovely, but it's, it's a big battery and that will have a sort of bigger environmental footprint. Ultimately you need to be able to sell these vehicles and to have those performance stats to help sell them as well. And then equally on the software side, these software defined vehicles as we know, enable sort of those ongoing evolution updates can happen over the air. In theory, that vehicle can continue to improve for a long time over its lifetime. But equally, car brands have to drive more sales on an ongoing basis and have to kind of plan redundancy into it in order to kind of get people to move on to the next vehicle. So the sort of, I guess the existential question is how on earth do you as organizations balance the need to be sustainable, extend the life of these products, make them more efficient, but also serve customers and drive sales and continue to drive and build sales as well.
- [21:50]
Glenn Schmidt
Well, the best way to guarantee current sales is to build in a superior product right at the end of the day. And I was sort of getting the feeling listening to you, that maybe between the lines you were saying, well, is does a car company like BMW at a global level sort of maybe build in some inherent faults into the vehicle so that they have a limited lifespan so that you're ensuring the sales will be coming down the road. And I think that's, that's not quite the case. Right.
- [22:23]
Imogen (Podcast Interviewer)
I would soften that slightly just to say that like, you know, you've got to as an organization. I would never suggest that BMW like oh look, we'll put this in, fault in, but that, you know, you're thinking about a customer and thinking about the lifetime of that customer, thinking like, okay, they will probably own this vehicle for X amount of time, what happens to keep them in the brand? And the purest sustainability person would be like, no, we want them to own that one vehicle for 1000 years and never buy another vehicle again. But that's not the reality of running a business. So that's the sort of slightly softer way to phrase that question, maybe.
- [23:00]
Glenn Schmidt
Right, Right. Yeah. And I think it's at the end, it's about coming up with a proposition for the customer that really checks all of the boxes. Right. And design and performance, these are still the number one purchase reasons for a vehicle. But we believe in a world where you need more differentiation, that sustainability and sustainability virtues can also play an important role. And you also have to realize that you have not one owner of a vehicle. In most cases, there are many customers that fall in love with their BMWs and say, well, I will keep my BMW for decades and wait for it to become a classic vehicle. In some cases, that's also a good investment because as classic vehicles later on, the value of the vehicle even increases. But typically you will have a customer that will own the vehicle for
- [24:00]
Imogen (Podcast Interviewer)
a
- [24:00]
Glenn Schmidt
couple of years or lease the vehicle and then will be passed on as a used vehicle to another vehicle. And then oftentimes these vehicles then move also to other markets as well where they are used. So you need to be thinking about that entire time. And sustainability is also about durability, right? So if you have a durable vehicle that fulfills very, very high quality standards, then you are ensuring happy customers. And these customers that are pleased with the vehicle quality then will come back and be repeat owners as well. And what we've done with, with our vehicles, and especially with the BMW iX3 as the first vehicle in the Neue Klasse, is thinking also from cradle to grave, because thinking for the longest time in industry has been very linear, right? You're extracting material, you're using it, and then you're tossing it away. But how do you actually close the loop so that you design a vehicle so that you can take it apart, that you have a different view on materials, that it's not at the end of life when the vehicle's life finally ends after many decades. But it's not just scrap, but it's a source of raw materials as well. And if we use the example of a battery electric vehicle, I'm exaggerating a little bit, but just to make it a visualization, you could almost think of these vehicles as minds on wheels, right? You have the lithium, you have the cobalt, the nickel, the metal, the Aluminum, the plastics, to a lesser degree, that can all be used again and being put into a closed loop for the next generation of vehicles. And there's, there's no reason why you shouldn't do that going forward. And that just ticks so many different boxes as well. It's reducing CO2, it's reducing our independence on other geopolitical regions. Unfortunately, we're in a world, you know, where you have more regionalization moving forward. And if you do it correctly, it's also a good business model as well. It makes a lot of economic sense.
- [26:09]
Imogen (Podcast Interviewer)
Yeah. And I guess ultimately enables that sort of, or broader ownership of the supply chain as well, like if that model is taken further into the future. So a few weeks ago I was, okay, I've got one more question before I come to that question, but a few weeks ago I listened to your colleague at the Financial Times Future of the Car event and he was talking about how actually AI enables us to, well, enables BMW to talk to all sorts of different customers and actually to really talk in a way that that customer wants to be spoken to. So I'm curious to know for which sort of people is sustainability a key concern or a key criteria when exploring their next vehicle purchase?
- [27:02]
Glenn Schmidt
So there are two ways of looking at this. You know, there's one way of looking at it is to say, you know, the customers will tend to look at things that just pertain to them, the design, the price for value, the performance in the vehicle. And some customers, sustainability will be really important to them, but that's kind of a smaller group that's not as relevant. And I think our thinking at BMW is the vehicle needs to look good, it needs to have an incredible functionality. You need to get the customer enthusiastic and proud to own. And then on top of that, by the way, this vehicle is very sustainable. So let's use the example of the aluminum rim. It's perfect. It has a beautiful design, but it's 70% secondary. Look at the BMW IX3 recently received a number of awards for 2026. It's the world car of the year. It is the world electric car of the year. It has incredible driving characteristics with a super brain that we refer to as the Heart of Joy because it proves that this reinterpretation of driving is exhilarating and fun. And you're doing it in an electric form and the vehicle is efficient. And if you're driving an electric vehicle, total cost of ownership, you can also be saving money compared to conventional alternatives. And all these things that sustainability, at second glance, all of these things get customers excited. And I think that's ultimately what's often missed in these debates. We always talk about electric mobility from the regulatory perspective and promoting it with a ban or EV quotas or a lot of indirect regulation as well, kind of forcing the consumer to go in that direction. But I think the true, and ultimately you can't force consumers, right? They need to be doing this out of conviction, otherwise they will continue driving their vehicles. And at the end, it's the proposition, it's the griving, it's what is the impact for your wallet, what is the emotion that you have? And I think this is a little bit underrated with electric vehicles. And once you go electric, you're not very likely to go back because it's such an exhilarating feeling. So that's the emotional level of things. And I think I touched on this very briefly. I mean, fleet customers, these are, you shouldn't be underrated as well, business customers, because they have CO2 targets for their fleets, sustainability policies. So you're a large corporation, you will have a sustainability strategy. How can you support your sustainability strategy with the fleet that you're driving as well? And having a sustainable fleet is something that's also important as well. So this is one next to the private consumer. Also the fleet customer, I think, is an important lever also to kind of leverage electric mobility and to lift it to the next level.
- [30:27]
Podcast Host (Event Announcer)
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- [31:01]
Imogen (Podcast Interviewer)
So again, at the Future of the Car event, a theme that really emerged was the desire for certain European car brands to pursue a multi energy strategy. Something which I know that BMW is keen to do. And really when you kind of distill that down, it's saying, well, customers are on different trajectories, which you have to accommodate. Car brands have to function as global organizations and regionally, there's different things going on. And also these organizations are huge employers and hugely responsible for driving livelihoods within a country. And when we talk about ESG and we talk about sustainability, yes, we're talking about emissions, but you can't just ignore this major, major workforce as well, which is a bit of a conflict that on the one hand, pursuing decarbonisation, pursuing electric vehicles but also having to transition a workforce in the right kind of way. And you sort of alluded to earlier that some of the regulation, some of the sort of policies that may be in place might not be the most favorable thing for BMW and others like you. And I wonder if we were to put you in charge of both BMW and, let's say, Europe, a big role. What do you think? Seems like the really logical response to that, arrives at a conclusion that does the maximum amount of good in the world.
- [32:35]
Glenn Schmidt
Well, there's a bit of a jump there between the BMW responsibility and then the responsibility for Europe.
- [32:40]
Imogen (Podcast Interviewer)
Exactly.
- [32:41]
Glenn Schmidt
And it's a good question and I'll give it a shot. I think we should not be coming from, let's say, mandating the future the way we want to have it. What we should be mandating are the targets. And the overarching target, of course, is to reduce CO2 to be compliant with the Paris climate Agreement and to make sure that we have this trajectory to 2050 to be net zero. And BMW Group has embraced this target of becoming net zero by 2050. And this is also the target of the European Union. So you can't change that. Right? That's where. That's the pathway that you're on. The question is, however, how do you get there? And if you're taking the approach, when it comes to drivetrain technologies and CO2 flip regulation of banning one specific technology and forcing the other technology, then you're creating a constraint. Often I hear the argument, well, you need to have planning certainty, and that would give planning certainty to the industry to know that in 2035 you will have no new internal combustion engines being registered. But how can, or how could I, if I was responsible for the European Union, say that on the 31st of December 2034, that's the day where you sell your final internal combustion engine vehicle and segue into another technology. So banning and just mandating targets is not the right approach. The right approach, however, is to say what we have a collective target, and that is to reduce CO2. Every gram and ton of CO2, not emitted counts. Take a holistic approach and make sure that you have the right framework conditions in place. And these framework conditions need to take a lot of things into consideration. Because the world is complex. They need to. The framework conditions need to take into consideration how much charging infrastructure is available. The framework conditions need to take into consideration what is the European economy and German economy and industry particularly good at, next to battery electric vehicles, where you have incredible product substance coming also from our Competitors very good at the internal combustion engine, then you need to be thinking as well. Well, you have a fleet of over 250 million vehicles on European streets that are all predominantly being driven with internal combustion engines and fossil fuel. Why not decarbonize fuels as well as. Because there's a lot of potential. If it's all about preventing global warming or slowing global warming, we can't stop it anymore. But slowing it, then you would need to take a look at the existing park and create a framework that also encourages the carbonization of fuels. And taking a broader and more diverse approach is often better than just trying to mandate something in the future. And ultimately it's about competitiveness. Right. So if Europe and European industry isn't competitive at a global level, even though the industry may be inherently more sustainable, you will have other regions of the world that are more competitive that will be pushing through their solutions. So, unfortunately, we need to be also seeing this at a geopolitical level as well. From a European perspective, what do we need to do to ensure that the industrial base is. Remains strong and remains competitive without giving up sustainability? If you do it correctly, you're able to do both of those things at the same time.
- [36:12]
Imogen (Podcast Interviewer)
I'm so curious because it's very easy to look backwards and to sort of think of like, let's draw these threads together and sort of unpick it. But do you think if there hadn't been a ban, that actually there would have been a natural move towards electrification anyway, purely from an efficiency perspective? And I guess like the sort of simple version of that question is have. Has making sort of one very, very clear parameter that's been deemed largely sort of quite controversial across, you know, different. Different groups, has that exacerbated the problem in terms of how it's perceived? If that makes sense?
- [36:55]
Glenn Schmidt
It does make sense, yeah. I think. Well, the ban certainly doesn't make sense, but your question makes sense to me. Yeah, I think that the ban certainly hasn't helped. Right. I mean, we have now a debate currently for a revision of the CO2 fleet regulation. And I think it's fair to say that there will be at the end of this debate, although there are differing perspectives and positions, it's fair to say that. That the ban may get lifted at the end of the day, so it will not be such a hard ban. But currently we have a ban and that ban hasn't led to an acceleration in terms of the uptick. If I think about the 27 European member states, five of them will have in their New car market share over 30%. Battery electric vehicles, all electric vehicles. And the remaining. What does that mean? That means the remaining 22 member states have shares that are well below that. So you have a really big difference within Europe. If I look at often in these debates, there's an elephant in the room. You haven't mentioned it yet, but I will. And that's China. You see that China has been able to currently in their new car sales go well over 50% in terms of battery electric vehicle sales. But there's no ban in place. So obviously using different methods, doing different means of doing that. The ban has done one thing, hasn't necessarily promoted the uptake of electric vehicles. What it has done, it is, has ended the future of the internal combustion engine. The moment there's the end date for any technology, then you will see that a lot of the investment will go out of the technology. A lot of with the internal combustion engine. A lot of specialized midsize SME companies that are leaders in their segment will have difficulty financially because the market's disappearing or they're not able to get credits from their banks as well. And although at the first line, bottom line, it may be, let's say, not intuitive, but it is possible to push something that's new and even better, like battery electric vehicles, without giving up the old, right? You give up the old when you, when you have the economic and industrial powers of the new. And there are economic regions around the world that understand this principle, that you promote something new, but then you keep the old as long as you need it. And unfortunately, the world around us is not black and white. There are a lot of gray, there's a lot of complexity inside of it. So even if I were to go one step forward, BMW has been very technology open in all of this debate, which does not mean, and I think this may have been mistaken a number of years ago during the first debate on this issue. Technology openness doesn't mean you're clinging on to the internal combustion engine and not progressing. It means you're using the advantages that you have in your drivetrain to serve global markets. But it's possible to be technology open in terms of strategy that promote one technology, and that is the battery electric vehicle technology, and to do a thorough job of it, a strategic job of it, and to try and get that position of a strong market positioning as well. So it's possible to do both. In fact, you have to do both in order to survive in these really turbulent geopolitical times.
- [40:34]
Imogen (Podcast Interviewer)
And it's such A compliment, because I know that I'm anticipating, because we have an audience who are very fierce advocates of electric vehicles. And of course, because once you've driven electric, we've said it earlier, it just sort of makes sense. And there's been this real excitement, anticipation of new and more and more options being available. And this year, you know, the benchmark has been set. Volvo EX60 and BMW IX3. All of our reviews, and not just ours, but other YouTubers as well, they're always just comparing them to those, those two vehicles. But at the end of the day, the European car market in particular hasn't been afforded this blank sheet approach that Chinese OEMs have in which it strategically makes sense to pursue one powertrain. Because why, if you were starting from scratch, would you pursue an aging technology and make your business extremely complicated? Existing OEMs don't have that kind of luxury of just saying, do you know what, let's bin that bit, we don't need it. So it's hugely complicated. And it's such a nuanced debate which becomes very polarized in, I think, this current climate. So I guess a question I'd love to know, because what I love about having worked in OEMs is that these are complicated products. There are inevitably debates that happen all the time where different departments, different personalities are vying for a particular thing and it creates a lot of fun debate. So I wonder what are the biggest debates that occupy your weeks internally?
- [42:22]
Glenn Schmidt
You did work for an oem and if I'm informed correctly, there's a little splash of BMW in there as well.
- [42:26]
Imogen (Podcast Interviewer)
Right, well, so I was formerly at Jaguar Land Rover, which was. Is there BMW heritage there?
- [42:39]
Glenn Schmidt
I don't know. I was just doing a bit of research with your LinkedIn site as well, and I. And I saw like a little splash of BMW in there, but maybe I wasn't hallucinating. But no, no, you actually thought a little bit of something.
- [42:51]
Imogen (Podcast Interviewer)
I suddenly thinking was that have I misremembered the ownership? But no, I know exactly what you're, what you're talking about. I did a project whilst I was at university at the mini plant here in Oxford and it was really cool because it was the first time I learned terms like first in, first out, or last and first out about how things are loaded onto a production line. And that specific project, I'm really going into the back of my memory here was around making the glazing process a bit more efficient, preventing damage to the glass that arrived at the factory. And it was the first Time I'd really been in a factory, I think. And it was just. It's like Willy Wonka but for grownups, it's incredible. So, yes, you're right. That was my bill.
- [43:37]
Glenn Schmidt
I just thought, I just noted that you're conducting the interview, not me, but I was just curious. But in terms of answering your question, what are the biggest debates that kind of keep me awake at night? I think one of the big debates right now in the automotive industry is what's the path forward for Europe in a world that's still very global, but where you have a lot of geopolitical competition? And there are two schools of thinking. One school of thinking is, well, Europe sort of needs to become a fortress. You need to have tariffs, local content, stiffer local content requirements, and the best way to kind of keep competition out is to build a wall. And the other thinking is, and surprise, surprise, this is BMW way of thinking is, well, the European automotive industry is. And that means we need to be successful in China, continue to be successful in China. It's the largest market. There's hyper competition in the market. A lot of new technology is being driven or being paced in China as well. So if you're global and want to be globally successful, then you need to continue to be successful in China in that way. And you need to do coopetition. You're cooperating, but you're also competitors. Right. And so that also applies to sustainability as well. Right. Is sustainability a connector or is sustainability a divide or a divisive factor? And that's one of the big debates. And my position is, of course, in a world that's turning a lot more divisive, it's still important to think of sustainability, climate protection and this planet is something that connects us. Even though China or Europe currently or the US will have different approaches, it's still a connector. So that's, I think, one of the big issues. The other thing that or debate that keeps me up at night as well is how do you keep sustainability relevant in a world where you talk a lot more about competitiveness, resilience, functioning business models in tech supply chains, energy crisis as well as. And there the answer is, well, sustainability answers all of those questions. Right? A circular business model is something that helps you to secure raw materials that you need. It also de risks your supply chain if you're sourcing material only once. Right. In Europe, we don't have a thriving mining industry, but we also want to be driving electric vehicles in the future. So you will need to do mining in the future. And extract minerals for the increasingly large park of electric vehicles. But let's only do it once. Let's keep it in a circular model as well. And how can we not give up on things that are important to us, like for example, the Paris Climate Agreement and continuing to decarbonize. So this whole debate where sustainability is being put a little bit under pressure externally, this is something that is also a big debate as well. And I said this early on in our conversation, it's really the art is to combine and the art is to realize that sustainability is broad and connects all of these elements. And even though perception is always important for humans, if we look at the facts, there's no reason why sustainability should no longer be a top priority, because the state of the planet has never been worse than it is now. We're continuing to emit CO2. We have a major problem when it comes to biodiversity. The level of global warming that we cannot stop leads to disastrous effects around the world. And so it still needs to be the number one priority.
- [47:39]
Imogen (Podcast Interviewer)
And I suppose as such there has to be that better understanding that it is the magic thread that weaves through everything to build that competitive edge, to build that resilience, to de risk a business, to keep things global as well. Because that by nature, its nature makes supply chains more diverse and makes them again more resilient. As a product of that, so many pearls of wisdom in there. And I suppose if I could afford you one wish, one thing that would just make some of those daily worries a little bit lighter, what would you ask for?
- [48:19]
Glenn Schmidt
If I had that magic wand, that one big wish, I think my big wish would be that sustainability, it still is a connector, that something that connects worlds. When we will have different understandings of how to run economies, we will have different political systems, we will have more and more hyper competition, we will have a scarcity of resources. These things are all coming. But my hope would be that sustainability doesn't end up flipping and being an instrument for further protectionism. And unfortunately we are seeing that trend that you're using sustainability regulation to keep people out, to keep the world more fragmented. But that sustainability can still be a connector. And unfortunately, from an economic or industrial perspective, you could sometimes say, well, the first mover, you would have a disadvantage when it comes to sustainability, there's maybe an inherent first mover disadvantage. When an economy says, well, we want to be net zero first, right? And we see India is 2070, China 2060, Europe 2050, Germany 2045, right. Then you could say, well, there's an inherited disadvantage in doing this first. But if everybody thinks like that collectively, then it's the end, right?
- [49:42]
Imogen (Podcast Interviewer)
Yeah.
- [49:43]
Glenn Schmidt
And so that would be my big wish, that sustainability, nature and the planet is still a connector, despite the differences and the variety that we have around the world.
- [49:56]
Imogen (Podcast Interviewer)
And my last question. What's the one thing that you're most proud of for BMW from a sustainability perspective? The thing that you, like, makes you feel really, really good inside.
- [50:14]
Glenn Schmidt
There isn't really one big thing, but it's a whole series of things. I think it's. I think what. What makes me proud, but what makes the entire organization proud is that sustainability has also always played an important role and has ultimately given a lot of strategic advantage. In 1973, BMW was the first company to have a environmental officer. Then 2007, we came up with Efficient Dynamics. You know, how can vehicles become more efficient but still be dynamic and fun to drive? It seems like a contradiction, but our engineers proved that it isn't. Or project I in 2008, that initial think tank within the company that said, let's develop an electric vehicle from scratch and think about things holistically. And that led to the BMW i3. Not the one that's coming in the market now as we speak, but the i3 that came in 2013 that you still see on the streets. First, bold moves in terms of all electric series vehicles. Now all the way coming up to the Neue Klasse, where sustainability and circularity is part of how we position the vehicle and the transformation of the entire company. So I think this is the one thing doesn't answer your question. Not trying to dodge it, but I think it's just the fact that that beautiful BMW and all of our associates around the world think sustainable. It's not always easy. There are a lot of debates, but at the end of the day, it's always played an important role in our strategy and it's helped to shape the company that we are today.
- [51:52]
Imogen (Podcast Interviewer)
Well, I think the fact that you can't point to one thing, and it's a collective of things, points to a bigger achievement of just that sustainability exists as part of the fabric of the culture and the DNA of the brand. And I can't believe that 19. Well, I can believe why 1973 was the date, but incredible that 1973 there was that environment.
- [52:13]
Glenn Schmidt
Yeah, that's one of the reasons why I always kind of hesitate to say I'm responsible for sustainability, because that's not really true. Right. Everybody's responsible for sustainability.
- [52:21]
Imogen (Podcast Interviewer)
Yeah. Yeah. Well, honestly, this has been an incredibly enjoyable conversation. Thank you so much for your, for your candor and for exploring some of those rabbit holes with me. I so appreciate the discussion. And yeah, thank you so much.
- [52:35]
Glenn Schmidt
Thank you as well. I've enjoyed the conversation.
- [52:44]
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Imogen (Podcast Interviewer)
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