In a strategic move to challenge the pioneering electric vehicle (EV) manufacturer Tesla, BMW is revisiting its historical innovation, the "Neue Klasse," this time as an all-electric offering. The German automaker is leveraging its past success to regain prominence in the EV landscape.

Back in 1962, BMW bet its fortunes on a revolutionary car, the "Neue Klasse," or "new class."

Originally introduced as the BMW 1800, this groundbreaking vehicle set BMW on a trajectory to become the benchmark for "the ultimate driving machine" and a highly successful brand across industries.

Today, BMW stands at a crossroads once again, this time relying on a new iteration of the "Neue Klasse" to chart a fresh strategic course.

At the recent Munich auto show, BMW unveiled a prototype for an all-electric "Neue Klasse" vehicle, roughly matching the size of their popular 3-series model line. The showcased car boasts cutting-edge features, including panoramic information displays projected onto the windshield, as well as iconic BMW design elements such as the distinctive Hofmeister kink in the rear side windows and the dashboard screen.

This unveiling marks the start of a multi-billion-euro endeavour aimed at bridging the technology gap between BMW and Tesla, as well as other EV manufacturers who have been winning over customers with innovative models and software-driven features that outpace many of BMW's current offerings. Despite BMW's relatively early foray into EVs with the launch of the i3 compact in 2013, a vehicle that failed to achieve substantial sales and was eventually discontinued in 2022, the "Neue Klasse" represents a major leap forward.

While specific investment figures have not been disclosed, BMW is allocating $2.2 billion for new battery manufacturing and assembly operations for the "Neue Klasse" at a plant in Hungary, one of the initial factories slated to produce these vehicles.

When production of actual "Neue Klasse" models begins in 2025, it will be 13 years after Tesla introduced the Model S, setting a new standard for high-end EVs.

Interestingly, Tesla and other EV startups already incorporate key design elements from the "Neue Klasse," such as integrating the battery pack into the vehicle's body structure to reduce weight and assembly costs.

As BMW enters the compact EV market, it finds itself in direct competition with Tesla, which has initiated a pricing battle.

BMW's "Neue Klasse" vehicles will be equipped with cylindrical batteries measuring 48 millimetres in diameter and varying lengths, which bear a striking resemblance to those Tesla plans to employ in its Cybertruck and other models.

The primary goals for the "Neue Klasse" include a 50% reduction in battery pack costs and a 25% increase in range per kilowatt-hour, a measure of efficiency, as per BMW executives.

The "Neue Klasse" EVs will be equipped with four "super brains" responsible for controlling propulsion, driver assistance systems, infotainment, and other functions. BMW is collaborating with chipmaker Qualcomm on the driver assistance system while handling the development of propulsion and chassis controllers in-house.