[MUNICH] On Friday (Sep 5), German luxury carmaker BMW launched its second-generation iX3 – and with it, a sweeping reset strategy to catch up to its electric vehicle (EV) rivals.
The new iX3, a fully electric sport utility vehicle, goes on sale internationally in early 2026. It replaces the existing model, one of BMW’s more successful EVs.
It also represents perhaps the biggest bet in the brand’s 109-year history: one that pits it against technology-heavy EV leaders such as Tesla and the China brands, which include BYD, XPeng and Nio.
The iX3 is the first in a series of 40 new vehicles to be introduced by 2027, in a reset for nearly all of BMW’s models. Known as “Neue Klasse”, German for “New Class”, these will use a new group of improved technologies.
Speaking at the car’s debut in Munich, BMW’s management board chairman Oliver Zipse said: “The Neue Klasse is our biggest future project and marks a huge leap in terms of technologies, driving experience and design.”
He added: “Neue Klasse is much more than just one new car. It is a completely new model generation, a massive leap that will shape the entire brand for years to come.”
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Development began in 2020, when the BMW group’s overall research and development expenditure was 6.3 billion euros (S$9.5 billion); in 2024, it peaked at nine billion euros.
Zipse also revealed that the next Neue Klasse model will be the i3, a fully electric version of one of BMW’s most popular cars, the 3 Series sedan.
The Neue Klasse cars will have significant improvements in EV and software performance and features, including artificial intelligence (AI).
Industry observers expect the move to help BMW improve sales in China and the Asia-Pacific, where European luxury carmakers have been losing ground.
Going hard on software
To increase the appeal of its cars across different markets, BMW is taking a different approach to on-board computing, including collaborations with Chinese tech giants.
On the hardware front comes a new setup of four networked computers, providing 20 times more processing power than current models.
Other cars may have dozens of processing units for various functions. In contrast, these four networked computers monitor all systems and can respond with less latency, improving driving performance and efficiency.
Running on these computers is a new software architecture, designed for constant incremental upgrades. New functions can be added, or existing ones improved through online updates, with no need to bring the car into the shop.
The new software also allows for market-specific features – and BMW has already confirmed collaborations with China tech giants for that market. At its Shenyang plant, BMW will build a China market version of the iX3 “tailored specifically to the needs and desires of customers” there, with deliveries beginning in the middle of 2026.
BMW will work with Alibaba’s autonomous driving software subsidiary Banma and AI company DeepSeek to improve in-car voice control systems in China. Models for other markets will use Amazon’s Alexa.
For advanced driver-assist systems that help drivers keep to lanes or automatically follow the car in front, BMW is working with China player Momenta to develop features for the China market.
A new hope
The new iX3 claims much improved performance with a new EV system that runs at 800 volts – twice that of the old model and comparable to China EVs. It also has new lithium battery cells and a battery-management system, all designed in-house.
BMW says that the car’s range has been almost doubled to more than 800 km. That ranks among the highest endurance for EVs, outgunning all existing BYD and Tesla models, and even rivalling petrol-electric hybrids.
While its battery is large at 108.7 kilowatt hours (kWh), the range gains are not achieved through battery size alone. BMW credits EV system improvements and aerodynamics for an efficiency of 15 kWh/100 km, putting it on a par with rival Tesla Model Y.
Overall, the new generation of vehicles will be around 20 per cent more efficient than previous models.
Charging is faster as well. The top rate has been more than doubled to 400 kilowatts, meaning that 10 minutes of charging can add 372 km of range.
Taking the right steps
Luxury carmakers such as BMW, Audi, Mercedes-Benz and Porsche have lost ground in China in recent years, due to the lukewarm economy and the rise of local manufacturers even in the premium and luxury segments.
Industry observers said that BMW is taking the right steps to challenge China manufacturers, which could boost its sales not only there, but more widely in Asia as well.
This is through both the Neue Klasse’s more capable EV platform and its software.
“BMW’s adoption of an 800 volt platform, together with new-generation battery cells, brings significant gains in charging speed and driving range, closing the gap with top Chinese brands,” said associate professor Jimmy Peng of the National University of Singapore’s College of Design and Engineering.
“For BMW and other international players, regional software development may be essential to ensure competitiveness and to foster customer engagement,” he added. “This is particularly important when China remains BMW’s largest single market for car sales.”
For the first half of 2025, BMW sold 318,125 cars at a group level in China – less than half the full-year figure of 824,932 in 2023.
An analyst from ThinkerCar said that the new approach to software could help BMW’s competitiveness in Asia-Pacific more broadly.
“Many elements of China’s digital ecosystem, like TikTok or Douyin, are also highly influential in South-east Asia,” added the analyst. “This means that the dividends from BMW’s localisation investment in China can have a spillover effect across the entire Asia-Pacific region, making its products more digitally appealing than those from its European or Japanese competitors.”
