July 16, 2013 12:54 pm

BMW embarks on risky electric revolution

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For BMW, a carmaker best known for powerful saloons and petrol-hungry SUVs, the launch this month of its first fully electric series production vehicle represents a high-risk revolution.

As the EU and national governments toughen emissions regulations, it is imperative that premium carmakers such as BMW have zero-carbon vehicles in their fleets.

But fully electric vehicles such as the Chevrolet Volt, Renault Twizy, Nissan Leaf and Tesla Model S have yet to convert positive reviews into big sales.

Although global electric vehicle sales more than doubled last year, the overall number on the road – some 180,000 – is equivalent to about 0.02 per cent of passenger cars, according to a recent International Energy Agency report.

After six years of work on its futuristic “project i”, failure for BMW’s i3 urban compact and forthcoming i8 plug-in hybrid sports car is not a palatable option for the world’s biggest premium carmaker by sales.

BMW emphasises that it has not simply substituted an electric motor for a combustion engine. The i3 was designed from the outset as an electric vehicle and can therefore be pitched as a unique, premium product.

Alleviating public angst about electric vehicles has also become a top priority for the German carmaker.

“We . . . had anticipated that the market place for electric vehicles would be stronger than it was. But it has not moved us from our course,” says Ian Robertson, BMW board member for sales and marketing.

“Consumers have anxieties and expectations, [and so we asked] how do we handle that? We have tried to find solutions for all the questions that consumers have.” 

Consumers’ biggest worry tends to be that a vehicle will run out of power before reaching its destination. But having conducted extensive field trials, BMW says its urban-dwelling target audience can set aside those fears.

After a full charge, the i3’s lithium ion batteries can power it for 130km-160km, which executives say far exceeds the average daily commute of about 40km in Germany and 50-60km in the US. The average customer will therefore only need to charge their vehicles roughly two or three times a week.

The i3 can be plugged into a conventional wall socket at home and when on the road an onboard navigational system updates to show the nearest public charging point. If the driver takes his or her foot off the accelerator pedal, the vehicle enters “recuperation” mode, a form of engine braking that feeds power back into the battery.

But BMW is also offering i3 buyers a fallback option in emergencies: the company will send someone to charge the battery and get you to the next electric station. Buyers can also opt for a range extender – a small petrol engine and fuel tank – that can increase the maximum range to about 300km. 

There is no guarantee of success . . . Progress has to be imagined, earned and paid for

- Chief executive Norbert Reithofer

Although BMW acknowledges its target customers will probably already own another vehicle, it is also offering to provide i3 buyers with a traditional petrol saloon or SUV for three or four weeks a year to use for longer trips, such as holidays.

Cost remains another worry for consumers. The BMW i3 will sell for somewhat less than €40,000, according to officials. The actual price will be revealed at the launch on July 29. Although the i3 can accelerate from 0-100 km/h in a sprightly 7.2 seconds and boasts a roomy cabin thanks to the absence of a central door pillar, it is expected to be a substantial sum for a four-seat compact.

Mr Robertson says electric vehicles will have greater uptake once they carry at most a 10 per cent price premium to traditional vehicles. Neither BMW nor its competitors are there yet. Government electric vehicle incentives can help bring the cost down – by up to £5,000 in the UK and $7,500 in the US, for example.

Weight is another issue. The i3’s lithium-ion batteries, held in the base of the vehicle, account for almost a fifth of its 1,195kg load. To offset this, BMW has fashioned the chassis from aluminium and constructed the passenger compartment from lightweight but expensive carbon fibre-reinforced plastic. High-tech adhesives are widely used instead of welding, bolting and soldering.

The company hopes these innovations will help win over customers. And crucially, having already absorbed large upfront investments in development and production, BMW says the i3 will be profitable from day one.

“Being the spearhead of change means taking a calculated risk,” chief executive Norbert Reithofer told shareholders in May. “There is no guarantee of success . . . Progress has to be imagined, earned and paid for.”

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