BMW has transformed its "i" division into a development centre for self-driving cars marking a major strategic shift for the unit which previously focused on making lightweight electric vehicles.
BMW’s next fully electric car is now not due until 2021, significantly later than its rivals such as Tesla, which will release its Model 3 in 2017, and Porsche and Audi who are working on all-electric cars for a 2019 release.
The company has changed tack after its only fully battery-powered car, the i3, failed to gain traction with the public, with only 25,000 sold last year. By contrast, Tesla has already received more than 370,000 orders for its Model 3.
These lacklustre sales have led BMW to shift the focus of its ‘i’ division from developing electric cars to autonomous driving according to company board member Klaus Froehlich.
"It is now in ramp-up stage. We call it Project i Next," he said.
The revamp also follows at least four high-profile staff defections from the division this year. Dirk Abendroth, manager of BMW's "i" powertrain group, Henrik Wenders, vice president product management BMW "i", and Carsten Breitfeld, vice president engineering, head of the i8 vehicle programme, were poached by a Chinese electric vehicle start-up.
As part of its autonomous driving push, BMW is hiring experts in machine learning and artificial intelligence. It is also integrating the functions of existing computer-driven assistance systems like cruise control, emergency braking, lane-keeping support and automatic parking.
Sales of highly autonomous vehicles, those where permanent active input from the driver is not required, are not expected to gain traction until 2020, but could then rise to around nine million a year by 2025, according to analysts at Exane BNP Paribas.
China, the world's largest car market, is likely to be the place where autonomous cars will first emerge on a large scale, Froehlich said.
"China is extremely fast in implementing technology. Last year more electric cars were sold in China than in all the other global markets combined," he added.
BMW is also considering expanding in the area of reserving parking spaces and electric car charging stations over mobile phones, a market which is still fragmented within countries. The car-maker has already invested in ParkNow and Parkmobile, two digital parking and payment services.
"We want to actively participate in a consolidation process," Froehlich said.
Although Apple has not made any formal announcement about its intentions to enter the electric car market, rumours in the industry are rife.
Last week it emerged that the company was investigating how to charge electric cars, talking to charging station companies and was hiring engineers with expertise in the area.
This follows widespread reports that it has launched a secret lab to start development on its own self-driving electric cars.