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00:00I'm really excited to be here with you and talking to you aheadof this motor show. And I want to just touch on your electrification push right. You're right in the middle of it andyou're taking this more nuanced approach. Your remaining open on technology you're focusing on hybrids. You've got your toeholdin hydrogen recycling rather than this headlong charge into fully electric cars that some of your competitors are doing. Andsome market watchers are saying that's a sound approach. But looking at your valuation you're yet to convince investors.So what's the plan. I'm changing that perception and getting credit for your price. Right. You know BMW is a customer centricorganization and we follow the markets. And the first results in 2020 fund of the first half year showed that we are gainingmarket share. We are growing. We have a sustainable business approach.And now electric mobility is really keeping up the pace. And we are right in the middle of it. You see it with the 0 4 and theIBEX which we have here which which which which generate a really enormous response from the markets. So we are right inthere and we are very positive positive about our future. Okay. Let's turn to one issue that's going to be key in winning thebattles of course batteries. And we just had some news from GM. They're having to recall all of the Volt electric models overfire risks in their batteries. You're developing new technology that's going to come to market around 2025.In what way is giving this GM disaster giving you pause for thought on risks here. We are just bringing up our newesttechnology which is the fifth generation of our electric driving to the market.And just this year we ramped up our contracts which we have with our suppliers from 12 billion euros up to over 20 million euros.So we're ramping up there. And we always said battery technology the electric drive trends if not is not an easy thing to handle.But we have now we are now in our 10th year of developing these and we are very confident that we can ramp up this market demandas quickly as possible. Okay. What about this sixth generation around 2025.What kind of improvements can customers expect then. Like the sixth generation will come with our NOI cluster with our newfully electric bethe only architecture. And I think the main thing is to extend the range to increasethe energy density and at the same time reduce cost. That is the target for the sixth generation. No really focus on reusingmaterials or making new cars. But in the medium in the short to medium term where are your key worries on raw material inputsfor batteries. Where do you think we might see the biggest bottlenecks. Right. Right. You know circularity is not only acolossal argument. It's also an economical argument. What do you see this year.The increase in raw material prices are on the rise for various reasons but it is an economic reality. So I think for ecologicalreasons but also as a business model I think we have to put circularity more and more into the focus. And the Neuer Clusteris all designed to rout that principle. But which raw materials are worried about right now. Well currently it's it's steel isgetting more expensive. We have palladium we have rhodium we have lithium will get more expensive. Normal copper is gettingmore expensive. So it's a wide range. It's not one single raw material we look at. We look at all kinds of raw materials. AndI think it's good advice too to take a more serious. Okay. And then I mean if we're sticking with supply issues I'll have toask you about semiconductors. Of course. In August you said that the second half is going to be significantly more difficult. Andsince then we just had more bad news in terms of the supply. I mean what are you bracing for right now during the second half.You know our take is the first half year. We were we were able to largely compensate for our customers the effects. And as Isaid some weeks ago the second half is more difficult. And that is what we see now. It is more difficult. It's here to stay. Theproblem for many months. But we are intensively working with our suppliers to compensatethe effects for our customers. Okay. And just turning to one issue that's closer to home we've got the election in Germanycoming up at the end of this month the end of the Merkel era car making less. No country like Germany where car making has asimilar importance. But at the same time there are still existential questions for the industry. Once we've got a newgovernment in place what do you want to see from that government in terms of what it does for the industry. You know the BMW has.It's been a fair partner to any form of political partner. And after the election let's wait what the outcome will be. We willplay an important role to be a reliable partner again and the next thing we will see from October onwards. Okay. You've come along way in the transformation already but there are still key thingsthat need to happen to modernize not just BMW but the whole industry. What are the most important things that need to happenfor the industry. BMW to see the next 100 years. Well there are a lot of things happening at the same time regionalizationdigitalisation different drive trains. And I think BMW is able to handle complexity. You know we believe we have a very strongteam behind us. We look very close to what is happening in the markets. And I think that ability to handle complexity is at thecornerstone of our of our strategy. And therefore we are not afraid of the future. Okay. I'd like to turn to China briefly.And Xi Jinping has put a decree recently that talks about common prosperity in addressing inner inequality in China. How doesthat affect you think purchases of luxury cars. We had an anti-corruption drive inChina in 2015 that did impact on car sales. What are you expecting now.First of all we are a premium manufacturer of future mobility. So of course first of all on the on the on the on the humanrights side at present worldwide we have the same principles in Europe in the United States and China. And we are group that isreally important and at the heart of our company. And of course if if specific changes in a specific market becomes dominant wewill follow that. Okay. Andin terms of operations in in China you're seeking to get to 75 percent of brilliancethe approvals for that. Your expecting I believe early next year. Is that still the target. First of all it shows that wehave been a reliable partner in this country for many many years and we foresee that at the beginning of the next year. So in acouple of months time we will have the approval and we can go as planned. Okay fantastic. If I've got time for one more then I'llgo for one more. I know it's a different topic. So it's on revision has just put outproposals that show they want to list in the US. The valuation is off the charts. We've got China's mio. It's worth roughly asmuch as BMW. To me. This really shows how your competitors areproliferating at a rate that's incredible. You have plenty of cash at the moment.Are there any ways that you're considering to deploy these deep pockets to stay in the race or get ahead in the race or speed upwhat you're doing. Well we are right in the middle of race. We are growing. We we're growing fast. We are gaining market shareof those. There is a big indication that we are on the right track. And of course we use that cash to reinvest to reinvestinto the future into electro mobility but also in hydrogen. So about the future we are very confident. We of course not happywith our current current capital market value. Of course not. Thanks so much. All right. Thank you.

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BMW Is `Right in the Middle of Electrification,' CEO Says

BMW AG Chief Executive Officer Oliver Zipse discusses the German carmaker's increase in orders for battery cells to keep pace with accelerating demand for electric cars. He spoke Monday in an interview with Bloomberg's Elisabeth Behrmann. (Source: Bloomberg)

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