Why Did BMW Bluster On Electric Cars? −

Why Did BMW Bluster On Electric Cars?

  • Published on July 17th, 2016 by

One of the more disheartening electric vehicle stories of the year was BMW pulling back on its plans to be an EV leader, rather than announcing a knockout, Tesla-Model-3-competing BMW i5 or other fully electric car. It was a bit of a shock since BMW made some exciting, gung-ho presentations about electric vehicles in the past few years as it rolled out its first i-brand cars, and it has been a leading seller of plug-in electrics. In fact, plug-in electric cars accounted for 15% of BMW’s passenger cars in North America last I checked.

So, where did BMW go wrong? Why is it shifting away from its plug-in leadership goals?

BMW i3 protonic blue 8

Option #1: It’s The Batteries, Stupid!

One of the most obvious guesses would be on the battery side of things. I just published an article highlighting some of BMW’s reported battery advantages over Tesla, but the key factor seems to be that BMW’s batteries (with cells coming from Samsung SDI) are considerably more expensive than Tesla’s (with battery cells coming from Panasonic, but specs coming from Tesla), as well as LG Chem batteries, which many automakers use. BMW may use the best batteries on the market (a very big maybe), but it seems the battery choice also prices the company out of the market (that’s the assumption, anyway).

Aside from simply choice of vendor, as far as we know, BMW hasn’t partnered with Samsung or any other major battery supplier to ramp up battery production to the scale that will be even more necessary in the coming years to compete with the top cars in the EV or overall car market. That is a key to Tesla’s leadership, Volkswagen seems to be in hot pursuit with its own potential $11 billion battery factory in Germany, and LG Chem has been ramping up production via several battery factories around the world. BMW & Samsung SDI? Well, if they’re doing anything big, we haven’t heard about it.

It could really be as simply as this: 1) without low-cost batteries, BMW can’t compete in the EV market, 2) without having laid the groundwork with a battery partner to massively ramp up battery production, BMW can’t get low-cost batteries. (And, possibly: 3) Samsung SDI simply isn’t set up or eager to move into the low-cost battery competition … but that seems to be counter to its reported move to invest $450 million into BYD in a big battery/EV move.)

Battery Prices
Here’s more info on Tesla’s sub-$190/kWh battery pack price.

Battery Prices and EV Domination Tesla

Option #2: Where Are The Gas Stations?

The other big advantage Tesla has, at least as a selling point for the people who dream about cross-country or cross-continent drives (spare me that time waster!), is a well integrated, reliable network of super-fast charging stations. Tesla is building this by itself, even though it has invited the major automakers to partner on it. Everyone else seems to be a decade behind, presuming they get started soon! However, for the most part, it seems OEMs are considering this aspect of things unimportant (very counter to what consumers think). There are no known plans in place to build a single non-Tesla super-fast charging station anywhere in the world, and no companies have come out and accepted Tesla’s offer to partner on the Supercharging network.

Assuming this is all true and there isn’t massive work going on behind the scenes to develop a comparable network, BMW would have a very hard time competing even if it built a cost-competitive, compelling electric car.

Supercharging Importance

Option #3: Dealers Will Be Dealers … Or Not

Conventional auto dealership reticence to electric cars is infamous and has been for a long time. This could also have harmed BMW’s electric car sales and prospects to a considerable degree. It seems BMW could come up with solutions to the challenge, but that is either more difficult than it seems or BMW just isn’t keen to put in the effort. In either case, the challenge of getting dealers to enthusiastically and informatively push BMW’s electric cars could be at least one of the core stumbling blocks.

Option #4: BMW Doesn’t Want The Transition To Happen Fast

Whether it puts BMW in a camp of masochists or not, the matter may be as simple as: slow this EV revolution down ASAP! As I’ve discussed at length elsewhere, so won’t do again here, a quick transition to electric cars threatens BMW’s (and other conventional automakers’) IP, competitive advantages, ICE-related sunk costs, and overall financial sustainability. Through a combination of the three things above; a focus on plug-in hybrids with very little electric range; and/or delayed releases of compelling, fully electric, cost-competitive cars; BMW may be trying to draw out the transition to EVs … just to keep its balance sheet in the black.

For more on that topic, see:

Why Tesla Model 3 Will Upend The Global Auto Industry (Cleantech Revolution Tour Video)

What’s Actually New In The Electric Car World?

Sergio Marchionne Admits EV Revolution Would Crush Automakers

Co-Founder Of Tesla About Starting Tesla (VIDEO)

Did I miss something? Any more thoughts on these matters?


 

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About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. Zach has long-term investments in TSLA, SCTY, FSLR, SPWR, SEDG, & ABB. After years of covering solar and EVs, he simply had a lot of faith in these companies and felt like they were good companies to invest in as a portion of his retirement strategy. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.
  • Martin Lacey

    Whatever the reason, or combination of reasons, the reluctance of established brands to embrace EV’s is giving a huge lead to those willing to bite the bullet. Tesla probably more than the many new manufacturers and we have to include the Chinese manufacturers who could well be placing themselves for global domination.

    • Mike333

      And gives a boost to Tesla’s stock valuation.
      After all, they’ve got no real competition.
      BMW has a weak 330e, that could compete with the Model 3. But, we’ll see when it’s released. 14 miles of electric range isn’t going to look good compared to a Four Wheel Drive, 200+ mile range, high speed, high performing Tesla.

      • Martin Lacey

        That’s the point of the Model 3 – to beat everything with a BMW 3 badge on it.

        To that list we can add Audi, VW and Mercedes.

  • MaartenV

    It looks like BMW, Honda, Toyota, FCA and Ford think they can sit this one out.
    And go back to real car making with real fuel when HFC comes of age.

    I think they are very wrong.

  • athbr

    I have to disagree with many of the points. I just picked up an i3 this week and had a great experience with the dealership. The i3 was prominently displayed at the front along with the swankier models and the dealer did not try to “persuade me to buy something else”, and many of the sales staff were driving i3s themselves. If anything, the guy purposefully walked me past the i8 a couple of times while doing the paperwork to see if I would bite. At least up here in the northeast, EVGo has plastered the I-95 corridor with CCS chargers. You really can’t go for more than 25-50 miles from Portland Maine to Richmond Virginia without encountering multiple EVGo or Chargepoint stations. Where are options 2,3, and 4 coming from? FUD? or some actual facts?

  • H.Invent

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  • Bob Fearn

    The big car companies would never bother with EV’s if they were not forced to or if Tesla was not such a successful competitor.
    They have never been concerned about the planet and as a former head of GM said, “We are not here to make cars, we are here to make money”.

    • trackdaze

      They from time to time they seem not to be able to do either.

  • trackdaze

    Let’s see how the german incentives force bmw to move. Combined with volkswagon now practically compelled by its own hand to act and tesla model 3 about to vaccum up 3 series demand.