A new off-road SUV, based on the next-generation X5 platform, is in development as an indirect replacement for the sporty XM. According to Automotive News, this new model will enter production in the latter half of 2029 at BMW's South Carolina plant.

The XM, a large SUV developed by BMW's M performance division, prioritizes high power and sporty handling. Currently BMW's flagship SUV, the XM is expected to be discontinued in 2028, making way for the G74 – the internal code name for the new SUV.

BMW's current most expensive SUV, the XM, starts at around 186,700 USD in the US. Photo: BMW

BMW's current most expensive SUV, the XM, starts at around 186,700 USD in the US. Photo: BMW

The G74 will expand upon the X5's existing off-road features, such as a rear-axle differential lock, dedicated off-road driving modes, underbody protection, and all-terrain tires. The design is anticipated to be more rugged and boxy.

While the next-generation BMW X5 is being developed with both electric motors and internal combustion engines, this off-road SUV is expected to retain a traditional internal combustion engine. However, a hybrid version of the G74 may also be offered.

Currently, the electric version of the Mercedes G-Class isn't selling as well as the gasoline version, with an average time to sell of 41 days compared to 16 days for the gasoline variant.

The G-Class commands a high average transaction price, making it a significant revenue driver for both Mercedes and its dealerships. BMW has several successful crossover models, but its ultra-expensive XM is struggling.

By offering a luxury vehicle focused on off-road capabilities rather than an unconventional SUV designed for on-road driving feel, BMW could tap into a more established high-end customer segment. This off-road BMW could also have a halo effect on the brand's other crossover offerings, which are typically marketed as "sport activity vehicles" and rarely touted for their off-road prowess.

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