Ladies and gentlemen, dear colleagues, welcome back. Let me now introduce the members of the Board of Management to you. I'm starting at the far right from my point of view. Milan Nedeljković, Management Board Member in Charge of Production. Next to him, Ilka Horstmeier, who's in charge of people and real estate. She's also our Labour Relations Director. Next to her, Nicolas Peter, our CFO. To my very left, our Chairman of the Board of Management, Oliver Zipse. Next to Mr. Zipse, Frank Weber, Development. Next to him, Pieter Nota, Management Board Member in charge of Customer, Brands, Sales. Of course, Joachim Post, in charge of Purchasing and Supplier Network. Your call will be streamed to us directly in the room. We would therefore encourage you to use a video call so that we can see you here.
This year again, we will have participants from all over the world joining us, and we kindly ask for your understanding if there are any minor technical delays. Please bear in mind, this Q&A session takes place in German. We offer simultaneous interpretation into English, which means you can also ask your questions in English. The members of the management board, however, will then answer in German, and you will receive the simultaneous translation. We are starting with the first question, and I'd like to ask for the first question to be streamed to us now.
The first question is by Christina Amann from Thomson Reuters.
Good morning to everybody. I've got a question which is mainly for Mr. Peter, which is about the profit margin. You're talking about some impact onto costs due to inflation, supply chain disruptions. At the same time, you also mentioned stable selling prices and a margin of 8%-10%. How does this go together? What do you mean by stable selling prices, and how will these develop in your point of view? Can you please also give us some numbers in terms of the impact onto purchasing and how this has developed?
Well, thank you, Ms. Ammann. Mr. Peter, please. Well, Ms. Ammann, now, first of all, to put this into context, our results for 2022 are very strong, which we can build upon with an EBIT margin of 8.6% within a highly volatile environment characterized by the war in Ukraine, disruptions in the supply chains, logistics issues, inflation, and interest rate increases. I think against this backdrop, we've done very well, and this is something we can build upon.
Where do we have headwinds and where do we have tailwinds? Let me start with the headwinds. In the current budget for the year 2023, we have already assumed increases in cost of material, which is already included in the 8%-10%, here we're talking about a number of roughly EUR 2.4 billion. That's quite a lot that's already included. Furthermore, we also expect headwinds when it comes to raw materials and raw material prices. However, to a certain extent, this is going to be offset by a positive FX development, which means we will only see a negative impact in the lower to medium triple-digit range.
On the other hand, we do expect tailwind coming from the strong product portfolio that we have, especially in the higher segments, we've got full year availability in almost all markets, except for China, where we are ramping up the 7 Series gradually. Apart from that, full availability. We've got a facelift X7, we've got the XM, which is going to come somewhat later in the year, which will also help us achieve very good contribution margins. With localization of the X5 in China, we also will have more production capacities available in Spartanburg, which is also going to help us increase our profit contribution. Therefore, on the whole, the guidance will see an increase by 1 percentage point from 7%-9% in the past to 8%-10% next year.
There's one thing you've got to take into account. You remember that last year we had a positive effect from the revaluation of the 50% BBA shares that we had held in the range of somewhat more than EUR 7 billion. We've got the countering effect, namely depreciation on the purchase price, that's about 1%. Actually, you can add that one percentage point on top to the 8%-10% because once again, that impact is already included in the budget.
Thank you very much, Ms. Ammann. The next question, please.
The next question is by Daniel Zwick from Die Welt.
Good morning from Berlin. Mr. Zipse, I've got two questions on the general operating environment. In Berlin, we are having massive discussions about the ban on internal combustion engines. The German government is blocking the ban in Brussels because the liberals want to have an exemption for e-fuels. Oliver Blume of Porsche and Volkswagen, they welcome this move. What's your view on this? What would be the impact onto BMW if there were exemptions from the ban on internal combustion engines?
Another major discussion ongoing is about the Inflation Reduction Act in the U.S. You said $1.7 billion is going to be invested in Spartanburg. Do you plan to invest even more in the U.S. in order to benefit from the IRA as well? Probably you will already benefit from the IRA with $1.7 billion. In today's situation, would you still have decided to build that plant in Europe, in Debrecen, or has the overall environment in Europe deteriorated so much that you would not take the same decision again?
Well, thank you very much, Mr. Zwick, and I hand over to Mr. Zipse right away. Debrecen is a topic which could also be answered by a head of production, but let's start with Mr. Zipse first.
Good morning, Mr. Zwick. You have known us as somebody who is very much in favor of a technology agnostic approach. That means that all technologies can contribute to substantial improvements in the climate, thanks to their further development. Of course, that applies to BEVs, which is the strongest market segment with the strongest growth. This also applies to continuous improvement of our combustion technologies, no matter whether the internal combustion engines in Europe will be banned or not, it's still a long way to go to get there, and there is no other region in the world planning to ban this kind of a powertrain.
Talking about e-fuels, which is your key question, the main effect with e-fuels is on the existing fleet, the legacy fleet. It's not about the new models to be launched. Here we have a massive discussion, of course, in Europe, but we haven't really talked about the stock fleet yet. The only contribution to improve the emissions of the existing fleet, we have only one option, namely e-fuels. I fully agree with the colleagues who favor this solution, especially because our engines are already well prepared for e-fuels. IRA.
Mr. Zwick, the United States have realized that there is a nexus between industry, production, value generation, localization, and innovativeness. That is something where Germany has always been very strong, and I think we would now be well advised not to easily jeopardize that competitive edge that we still have, but to take a similar approach, no matter how exactly you implement it. I mean, the EU is also sponsoring a lot of new technologies. Here we should not complain. Just think about all of the IPCEIs. We have to realize that maintaining industrial competitiveness and innovativeness for future climate-friendly technologies, now, that really goes very closely together, and that's the lesson that we have to draw from the IRA. The $1.7 billion that we invest.
That's due to the fact that we want to electrify our largest plant in Spartanburg, which means that within a very short time, a total of six electric vehicles can be localized there. Now, although we're now receiving subsidies, we would have taken that decision even without the subsidies.
Thank you very much. Now the Debrecen question goes for Milan, please.
Well, the question of whether building the Debrecen plant in Europe is the right decision or not. Well, we're following the principle of production follows the market, and we keep growing continuously in Europe as well, and therefore, Debrecen is an important building block of our capacity setup. Within Europe, we deliberately chose Debrecen because in Debrecen we've got a very good infrastructure.
The city is a city which also has got a very high, highly renowned university, that means we also have good labor market in the region. Currently, we are continuously ramping up the plant. We are in the process of commissioning the various building phases, and therefore that's an important site for us.
Thank you very much, Mr. Milan. Thank you very much, Mr. Zwick. Next question, please.
The next question is by Wilfried Eckl-Dorna of Bloomberg News. Mr. Eckel-Dorn, please.
Good morning to Munich. Actually, I've got only a very brief question. Mr. Zipse. Now, we have already heard that there might also be plans to invest in U.K, in the U.K. plants. How much are you going to invest there, and how much of subsidies are going to receive from the U.K. government in this regard? The second question that I have, are you also going to produce electric MINIs in Oxford, in the U.K., and if so, when?
Thank you very much, Mr. Eckel-Dorna. Mr. Zipse, please.
Mr. Eckel-Dorna, the United Kingdom is very important to us because we have localized two very strong brands there, and this is also their origin, that is MINI and Rolls-Royce. You know that last year, Rolls-Royce once again set a new record in terms of profits and also sales, and this also speaks in favor of the environment that we have there. I can only talk about the economic environment for us, which is still very favorable. This is, for us, is a matter of honor to stick to our U.K. plans. Regarding Oxford, I can reassure you the electric MINI is already built there today.
The electric MINI vehicle that you can order is built in the U.K. We're also preparing the future generations of MINIs to be built there. We're in good talks with the government to receive support from the U.K. there. I'm speaking on behalf of the entire industry. I think we still have to support industry and industrialization in the U.K. as well, in order to ensure the future for industry.
Thank you very much. The second part of the question, once again, goes to Milan Nedeljković about the MINIs out of Oxford, the electric ones.
Well, thank you very much. Oxford, for us, is an important member of our international production network. Currently we are building three important derivatives there, also the all-electric MINI.
Apart from Oxford, we also have the Countryman being ramped up in Leipzig. There we will have an ICE Country driven and also an all-electric Countryman being built in Leipzig. Furthermore, we also have got a joint venture enterprise in China. There, there are two all-electric models coming from that plant. This shows that we have an international production network covering the entire world. We successively enhance our respective plans. For Oxford, we already have got the next generation where we're in preparations for the launch in the SFP next year.
Thank you very much. The next question, please.
Our next question is by Patricia Nilsson, Financial Times.
Hello, and good morning. Thank you very much for taking our questions today. You said today you do not expect to raise selling prices further. This is despite some bottlenecks still persisting and some costs still being expected to rise. Could you give a bit more detail as to why you're making this decision? I mean, have BMW cars reached a max level of what customers are willing to pay? The follow-up question is, BMW has, like most of its rivals, been successful in passing on higher costs to consumers. Can you give a little bit more detail as to how much the average price of a BMW car has gone up in the past year and past three years? Thank you very much.
Right. Thank you very much for your question. I would like to ask Pieter Nota to answer this question. Pieter?
Right. Thank you very much for this very important question. In the last years, we have, in fact, seen a really good price realization, which, of course, has contributed greatly to the solid profitability of the company. This is also based on very high demand for our product portfolio. We have an extremely strong and young product portfolio. We have full order books in Europe, but also outside of Europe, and this, of course, translates into good price realization. Of course, we keep a close eye on the market around the globe, and we will, of course, also make sure that pricing decisions will be made accordingly in the future. However, I cannot say anything about this at this moment. We are a premium manufacturer.
We offer premium brands, and that is why, of course, we continue to strive for a continuous and stable price development, which is also important for our customers. A piece of reliability, and of course also it's important for the resale value of our product. All in all, we trust in the attractiveness of our product portfolio and our price positioning reflects reliability. In how far our prices have developed specifically, I cannot tell you off the top of my head today. However, the price realization has significantly improved in 2022. Thank you.
Thank you very much, Pieter. Next question, please.
Our next question is by Marco Engemann, dpa-AFX. Please switch on your microphone.
Good morning from Frankfurt. Sorry for not being able to offer any video. Unfortunately, the digitalization efforts aren't just a challenge for car manufacturers. I have a question on Gen6 of your electric drivetrain systems. I'm still remembering Mr. Krüger, who, for Gen5, was speaking of cost savings of 20%. For Gen6, can you also give us a KPI like that? Is there gonna be a cost reduction for electric cars that you are expecting? Mr. Zipse, on the e-fuels, if I understand correctly, the discussion with the stock that's out there on the streets, of course, that's logical, that makes sense. If I understand the discussion, however, it's about new approvals after 2035.
Why does the German car industry lobby for a timeframe of plus 13 years to make sure that internal combustion engine cars will still be able to be approved that can then be operated with e-fuels? Why is that? Maybe to add on, of course, Spartanburg Woodruff, you've mentioned the $1.7 billion in investment. Can you already say how much you will get from the IRA for that? Thank you.
Let's start with Gen6. This is, of course, a question regarding cost savings. Let's start with Mr. Peter. E-fuels, Mr. Zipse. Spartanburg, I would again hand back to Milan Nedeljković. Nicolas, over to you.
Mr. Engemann, thank you very much. In Munich, we're really well underway when it comes to digitalization, but this just as a side note. Cost reductions on Gen6 for the batteries, this should be about 50% compared to Gen5. That's what we're aiming for, and we are doing quite well. That's not all, however. Of course, on top of that, with Gen6, we are planning to make sure that the charging times can be significantly reduced. I believe that is a crucial element in the mix. Of course, the introduction, as already has been communicated, will take place with the introduction of the Neue Klasse end of 2025.
Thank you. Frank, maybe you can also talk about a few more general aspects of Gen6.
I think Nicolas Peter was already saying the Neue Klasse is the probably most important step, technologically speaking, to get into the next time. Gen6 doesn't only mean new battery cells with significantly higher energy density and of course, with that also coming higher reach while significantly reducing costs. In the Neue Klasse, of course, this also affects the board network that is integrated in. With that, of course, we're creating a fully new level of, well, this new sixth generation and with the Neue Klasse to the end of 2025.
Thank you. Mr. Zipse, on the e-fuels.
The e-fuels question, maybe we need to expand the scope here. If we approve e-fuels, of course, that has to apply to new and old cars. You can't really differentiate at the gas station what's a new and an old car. That's almost a side effect. Let me talk about why we have this discussion in the first place. Today, there are five different drive technologies for cars around the globe. It's of course, two different types of combustion engines, gas and diesel, plug-in hybrid, purely battery electric vehicles, and of course, hydrogen is already being offered by certain manufacturers.
If you say today that soon, 12 years is not that far in the future, in 12 years you want to eliminate a lot of stuff. Let's say you switch off four technologies. If you need to hold all these other cars in rotation, you need to, of course, completely reshuffle the infrastructure. For example, the charging infrastructure is, of course, growing much, much more slowly than the number of battery electric vehicles, because of course, that's a huge investment.
Of course, you also create new dependencies regarding raw materials, especially regarding raw materials, which I believe can also be dangerous in a way. Of course, we're currently learning how important it is to not become too dependent on certain things. I think the takeaway is diversity means resilience in this regard. I believe for industries that are as large as the automotive industry, we should have resilient approaches, which all in all, regarding climate protection, are highly effective.
Please allow me one last remark. We are, of course, really following this technology openness. We have been for quite some years. This year, we are definitely overperforming regarding the EU CO2 regulations. We are outperforming it by almost 18%, and we're doing that with a great mix of plug-in hybrids, BEVs, and continuously improving internal combustion engines. I believe this approach is going to be successful today and going forward.
Thank you very much. We had another question on Spartanburg, the U.S. plant there, and how much we could gain from the IRA. Milan.
Right, Mr. Engermann, you mentioned the $1.7 billion in the context of Woodruff. The $1.7 billion, of course, referred to the Spartanburg site and the reworking of our plant there. Woodruff itself is a production site, which is right around the corner from Spartanburg. We're producing it or creating it at the moment, and the energy storage products are gonna be produced there going forward. On-site, we're getting, of course, some subsidies for the actual property. Besides that, through the IRA, there's, of course, also subsidies for a certain production volume. According to the capacities produced on-site, we will get the respective subsidies, which are generally applicable for everybody in the United States. With that, of course, I can't give you a specific amount for Woodruff as of today.
Thank you very much. Next question, please.
Our next question is by William Boston from The Wall Street Journal, Germany. Please unmute yourself.
Good morning. Right. Good morning. There's no Wall Street Journal Germany, but I am in Germany. It's Wall Street Journal International. I believe it's Wall Street Journal International. International, and it's Bill Boston. Yes, there's only one. There's only the one Wall Street Journal. No, that's okay. Yeah, I think we got it.
Okay. I just wanted to go back to the IRA. For us as an American economic magazine, of course, that's a crucial topic. You spoke of Spartanburg, but what are your thoughts in regards to how you will be able to profit from the IRA going forward? Now, for example, Tesla is getting their battery cells from the United States in order to profit further from the IRA because of the battery production in the United States. Now they're basically just assembling it with the car here in Brandenburg. Are you considering things like that?
Are you considering carrying out certain shifts? I mean at the end of the day, who doesn't want free money, right? There are opportunities to be seized. How do you want to seize them? The second question has to do with pricing. In China, of course, a price war is being waged at the moment. BMW, at the beginning of the year, apparently joined the fight. How is that supposed to continue? How high is the risk that this price war, this downward spiral we see in China, is going to wash over to Europe and the United States? Thank you.
Thank you, Bill. Great question. Very smart questions. Amazing German. Hats off to you. With that, I would like to hand over the first part of the question, the IRA, over to our head of purchasing, Mr. Post, then of course, on pricing, Pieter Nota.
Right. Mr. Post, you mentioned the additional options or what other options there were to profit from the IRA. Generally, we have, of course, the local for local approach, also in the supply chain and production, and of course, within the supplier network, there are various options for components like, for example, battery cells to profit from the IRA together with our suppliers, and also look at the entire N-tier supply chain, so upstream, to set it up accordingly. We are of course, having intensive discussions with our suppliers, we have set up a clear strategy, have already signed agreements in order to profit from the IRA in our supply chain, really set up a local network to diversify and be more independent.
Thank you very much, Joachim. Pieter.
Thank you. We, of course, in the long run, follow a demand-based sales management. With that, in 2022 and in the years ahead of 2022, we realized our prices very well. That's of course number one. Basically, we always deliver one vehicle less than what the market demands. The market demands are very high because again, we have a very high, a very big and modern product portfolio that is received very well by the customers. Our order books are full. We're in a good position. On your question to China, in order to better allocate that question, I think we need to understand the market structures in China perfectly. I think at the moment there are huge offerings for local electrified vehicles in, at play.
At the moment, this fully electric market, to a large degree, is at much lower pricing positions. About 95% of the volume there is sold at a price point of under EUR 50,000. However, we establish vehicles, particularly in the premium segment that is above this price point, and we're doing so very successfully. For example, looking at the i7.
We are significantly above the price point of EUR 50,000, and of course, we also have really good price enforcement. As mentioned, we are of course, keeping a keen eye on the price development around the globe and are continuously following this demand-oriented product management approach. Even going forward, I can't really give you any specific statements on our pricing and positioning in the future, it will continuously be based on the strength of our product portfolio and of our brands. Thank you.
Thank you very much, William. All the best. Moving on to some written questions. Now, let me start with one question for Ilka Horstmeier. Let me read it out to you. On this year's Equal Pay Day, BMW has received an award. It seems that the pay gap between men and women has been closed by BMW. How did you achieve that?
I'm very happy about this question. For us, the award is a source of satisfaction and motivation at the same time because it shows that we've done a lot of things right in our compensation policy in the last couple of years. This award means that in our overall compensation structure, we hardly have got any differences between men and women anymore for two reasons at BMW.
On the one hand, because compensation is based upon performance and equal opportunities. We adapt it continuously. On the other hand, we also systematically support women. Since 2019, the share of women in leadership positions has been increased from 17.2% to 20.2% within BMW Group. Our objective until 2025 is to reach 22%. That's why I'm quite optimistic that we will continue to be successful along this track. As I said, we are very happy about this award because it is also an award which is sponsored by the Federal Minister of Labor.
Thank you very much. The second written question goes to Frank Weber. Let me read it out once again. One of your key competitors recently announced that by 2025 they want to have an own operating system. That it will be able to run updates over the air entirely. What can BMW offer in this regard?
Thanks for this question, which of course is essential in our industry. Digitalization has been our key development priorities for the last 20 years. We've got almost 9,000 software development engineers at BMW Group. Actually, each BMW development engineer also focuses on digital, because digital is integrated in every physical function at BMW to produce an overall experience. I think if you look at Vision Dee, you can really see how innovative we are, which, features which we launch in standard production. We presented BMW Panoramic Vision, for example. The entire windscreen thus becomes a huge, fantastic display.
The operating system serving this is a system that we have developed internally at BMW. Those things which give BMW a distinctive feature versus our customers, that's something which we have been producing internally for years and decades. Those things which you can purchase off the shelf and which do not offer any distinctive advantage, this is where we go for such off-the-shelf products. I think our performance shows that this mixture of strong performance internally and strong partnerships leads to good success.
Next question, live again.
The next question is by Andreas Höchst from Münchner Merkur. Mr. Höchst, please.
Here we go. Good morning. I've got three questions. Number one, it's about the interest rate increase. That means that leasing rates and financing models for cars are becoming more expensive as well. Have you already noticed this in your order intake, or is this also a business risk for you for the upcoming year and maybe even beyond? Because it seems that interest rates have not reached their peak yet.
Next question on the agency model, which you're gonna launch at MINI next year and then 2026 also at BMW. One aspect of this is that you cannot go up to your dealership anymore and negotiate your final purchasing price. Does this mean that at the end of the day, customers will have to pay more for a car, or will you somehow reduce the list prices? A third question for Ms. Horstmeier. BMW has announced a fantastic dividend, and it's also very proud of sharing this success with the employees. Now, do you have any numbers regarding the employee bonus already?
Well, thank you very much, Mr. Höchst. Well, interest rate increase, leasing rates impact onto order intake. Well, I think that's the question to be taken by Nicols Peter , then FSM, Pieter Nota. As you said, finally, dividend and success participation of the employees. Ms. Horstmeier, Nicolas Peter, please.
Well, of course, that's an important topic because four out of 10 vehicles are funded and financed via our financial services offerings. In my report, you have certainly seen that in 2022, we deliberately reduced the rate of penetration slightly because not every step taken by business banks, which took a much more aggressive approach. Now, we did not want to parallel each of these steps. If you look at the leasing rate, basically there are three major markets we're talking about. That's the United States, it's the U.K., and Germany.
As Pieter Nota just already explained, especially in Europe, which means Germany and U.K., we still have a very strong order book. However, in our quarterly conference last year, we had already stated this, and of course, the increased leasing rates do have a certain impact. We have already announced that we see a slight slowdown of order intake in Europe, we still have a very strong order book, which we have to serve first of all. In the United States, I mean, that's a highly transparent market.
If you look at the latest auto data, you will see that the market is still a very solid one with a very low level of incentives, also historically speaking, which is why we are quite confident about that market.
Thanks, Nicola. Second part, FSM price negotiations impact onto prices. Pieter Nota, please.
Well, thank you very much. We've got a long-term strategy regarding the best customer experience in industry that we want to offer our customers. The future sales model fits perfectly into this long-term sales and marketing strategy with the ambition of offering the best customer experience. That's exactly also the target of our future sales model. This is about direct sales with enterprises and agents as sales representatives. In this context, we will offer transparent and consistent prices more than what we can currently do with the current model.
We have observed, and that's also what we see in customer data. We have observed that the majority of customers do not appreciate the possibility of price negotiations that much anyway. However, this transparent and consistent pricing structure is something that they appreciate very much. We are a premium provider, and in the sales process, in the new one, we will place an even stronger focus on good advice being offered to customers.
How this is going to impact prices, also because this is going to be a key topic for the future. That is something I cannot share with you at this point, but I'm gonna assure you, I can reassure you it's going to be a good fit because we are aiming for a long-term and stable pricing strategy, which is also transparent for our customers. As I said, it has already been well-received in the market, and we've seen a good demand there.
Thank you very much, Pieter Nota. Last part of your question was about the employee bonus. Ilka Horstmeier, please.
Mr. Höchst, you know that for us, employees are an important key to success, especially if we want to achieve such outstanding results as recently. Thanks to our consistent compensation, of course, our employees will benefit, which is not only fair in terms of gender pay, it also consists all the way from the board down to every single employee. Of course, they can also always benefit from our success in good times and in the bad times.
At the employee meeting last week, we announced that our employees, and here I take a skilled worker, they receive a bonus of EUR 9,000. On top of that, there is also a dividend component which contributes to pension provisions, which is based upon the dividend. Thirdly, most of our employees are also shareholders of BMW Group, which means they will also benefit from the dividend payout.
Thank you very much. Now, we've got about 10 minutes left, so I will now ask for the next question.
The next question is by Lennart Wermke from Automobilwoche. Mr. Berkenhoff, the floor is yours.
Thank you very much. Hello, everybody. Now, I'd like to know which parameters need to be met for this hydrogen pilot series iX Hydrogen to become standard production. Now, you said you want to decide on this in the end of the decade. What exactly would need to happen for you to offer this new series also with hydrogen powertrain?
Well, Frank Weber, please.
Well, that's a question we also asked ourselves when it comes to electromobility about 10 years ago. Again, it's a question that is dependent on the infrastructure, because one thing that is obvious, a vehicle running on hydrogen actually is a battery electric vehicle, where the big battery storage is replaced by hydrogen tank.
Therefore, the question, for example, of how the Green Deal is implemented in Europe and how green is hydrogen is produced, that's the basis for the implementation and the use of hydrogen in cars together with the fuel cell. Then comes the critical question: How quickly will a hydrogen infrastructure be available? In this case, it's not so much going to be driven by the passenger car industry, but rather by heavy-duty transportation needs, which means on the highways. That means for a further expansion and for the decision to go for series production, we need to have a minimum refueling infrastructure for hydrogen being available. Once that is in place, then hydrogen can be a highly attractive alternative for zero emissions.
Thank you very much for this, Mr. Wermke. We once again have a written question, let me read it out to you, by Regina Pöll of Passauer Neue Presse. She asked the following. I've got a question about the plans for the new high voltage storage production. The plant Straßkirchen in Bavaria was not mentioned in this context. Is there any reason for this? Is the plan somewhat being jeopardized or at risk? Milan, please.
We are in the midst of the ramp-up of electromobility, correspondingly, we are enhancing our capacities at all sites. With the current electrification in Dingolfing, Leipzig, and Regensburg, we do have already installed respective technologies. We see further electrification coming up in the future in Bavaria, that would be the nice new site in Straßkirchen, also, as mentioned before, in Woodruff, near Spartanburg.
When it comes to Straßkirchen, this is a new manufacturing site exactly for energy modules. From that site, we're going to serve our Bavarian vehicle plants. The plan is still fully in place. It stands, and we're currently in the process of finalizing the purchase of the real estate there. That means the answer is no, the plant is not at risk. Next question, please.
Our last question is by Victoria Waldersee by Thomson Reuters. Please unmute yourself.
Hello, thank you. I have a few questions, if that's okay. First, a question on the collapse of the Silicon Valley Bank. It probably doesn't affect you directly, but maybe it influences your strategy in some way. Like, for example, additional diversification regarding the banks you're working with or maybe additional checks for the banks that you've invested in indirectly via i Ventures. Another question to Mr. Nedeljković. Are there additional details on the fossil fuel-free plant in Debrecen, do you know how that's going to work? Also, is there going to be a new 3 Series combustion engine? If so, when? Thank you.
Thank you very much, Ms. Waldersee. We're going to start with Nicolas Peter.
Thank you very much for your question. You already basically gave the answer away yourself. The Silicon Valley Bank collapse has no direct impact on BMW, and it also has no impact on the strategic choices or the strategies of our bank selections, if you will, because we have a syndicated loan facility of around about EUR 8 billion, which of course, is a crucial building block in our refinancing strategy, our liquidity strategy. We are working globally in this regard. We're working together with European, American, and Asian banks and even Canadian banks, for example. They're all very strong partners also looking at their balance sheet, and that's going to stay that way.
Thank you very much. On digitalization, the Debrecen plant, Milan.
Now, regarding sustainability in the Debrecen plant or generally, we are of course following a clear sustainability strategy where we want to make all of our plans more sustainable and want to make sure that we establish a proper footprint across the board. We've only been getting nine, green electricity since 2019 across all sites, and of course, are trying to realize additional potentials.
For Debrecen, we are taking an innovative step, by making sure that the entire process energy and also heat energy is being derived from heat exchangers. With that, we're going to be able to do away with fossil fuels. With, geothermal energy production, we can actually work on this plant, and with that, of course, truly have a CO2-free production at this particular plant that, again, doesn't need fossil fuels.
Sorry, can I ask a follow-up? You asked that you are in the position to work this plant with electricity and geothermal energy. Is that true?
Well, we are currently assessing with the local authorities to look into the geothermal energy production options, and it is one of our plans to follow this. At the moment, we are planning the respective boreholes and drillings, and we're going to, of course, look further into the different options.
Right. The last part of this question, I believe, was a potential new 3 Series ICE. Frank Weber.
Of course, it's a more general question. I think you're asking what are we doing with combustion engines because of course, the 3 Series is a core product, but we're a global provider, and we are fully convinced of the fact that the coexistence of the best ICE offerings and the best battery-operated offerings is something for the next 10 years that is going to make BMW really strong.
With that, we can only say this decision is a decision we've made, and we're only going to make decisions as and when we need to adjust it. I think what's important now is that we're really investing in the Neue Klasse in high volume segments. Of course, that is certainly going to include a vehicle at volumes of the 3 Series. That doesn't mean at whatsoever to completely let up on the ICE side, but really being very present in both segments. That's something that makes BMW so strong.
Thank you very much, Frank Weber. Ladies and gentlemen, dear colleagues, as always, you should stop while you're ahead while it's nicest. It is now a little bit after 10:30 A.M., which means we have to end this press conference. Thank you very much for your interest. Thank you very much for all the questions. Nothing but the best. Speak to you soon. En service from Munich.