We know there is still great potential for the continuing development of the internal combustion engine. Our insight tells us that this will still be the propulsion choice for between 85 and 95 percent of the world’s vehicles in the year 2020. So we continue to concentrate our innovation on making every new generation of BMW gas and diesel engines more efficient, cleaner, and better performing than the one that preceded it.

—Jim O’Donnell

In his talk, O’Donnell remarked that while “an enormous amount of buzz and attention has recently been generated due to the introduction of two very good new vehicles in the market”, it was doubtful that either would prompt a major sales shift in the near term.

After all in the US, even after fifteen years, hybrid vehicles still represent less than three percent of the market. But does this mean none of us should continue with electrical vehicle development? Not at all, and I’ll speak to our efforts in a minute. However, we all have to share the goal of developing these new generation vehicles for more than just the early adopters among us. We have to find a way to tap into the mainstream of American consumers without too much help from US taxpayers.

—Jim O’Donnell

O’Donnell said that BMW sees technologies such as stop/start playing a much greater role in the future. He also noted that diesel sales for the company were up strongly.

The BMW X5 enjoyed a 27 percent increase in sales in 2010. But, our X5 Advanced Diesel model sales were up 73 percent. Every one of these vehicles improved fuel efficiency on average more than twenty percent and provided better CO₂ performance as well. In fact, nearly one in four X5s sold in 2010 were diesels. Sales of our 335d sedan were up 130 percent over 2009 and you’ll see more BMW Advanced Diesel models from us in the future.

—Jim O’Donnell

Like others, O’Donnell said, BMW is working on hybrid technology, and the company is continuing its work on hydrogen power. However, he noted, “without the infrastructure our program is on hold”.

BMW’s electric vehicle development strategy will enter its second phase later this year. The first step along this path was the MINI E; the next phase will see the BMW Active E be available for lease in an expanded group of markets including metropolitan areas of New York, Boston, Los Angeles, San Francisco, Sacramento and San Diego as well as the state of Connecticut.

The third step of the EV strategy is the Mega City Vehicle (earlier post), which will come to fruition in 2013, he said. Special emphasis is on light weight, compact size, and electric power.