After months of teasers and years of testing, BMW showed off the i3
today, its first electric vehicle designed to go into full production.
The odd-looking hatchback offers some of the “green cred” of Toyota’s
Prius, combined with a promise of BMW-like driving that should please
those who don’t want to give up much performance to get there. But
because BMW also offers an option of a small gasoline engine to extend
the car’s range up to 160+ miles, the i3 ends up encroaching on the
territory of both the Chevrolet Volt and even some of the ground Tesla Motors TSLA +3.99% is seeking to conquer.
The specifics of the i3 are no accident. BMW has spent 2 billion euro developing electric vehicles, running pilot programs where a number of Mini Coopers and 1-series sedans were leased to real-world customers. The company learned that most people drive 30 miles a day, it says. Like Nissan’s Leaf, the i3 will travel 80-100 miles on a single charge, though BMW claims its ECO PRO and ECO PRO+ modes will add 12 and 24%, respectively to that.
Because the car is shipping in spring of 2014, it will benefit from the latest in charging technology, which is a plus and minus. The SAE DC Combo charger will allow for a 20 minute recharge to 80% of a full battery (a Leaf can achieve a similar result on a comparable charger). Sounds great, but the few fast chargers in place so far are either Tesla’s proprietary Superchargers or generally support a different standard popular in Japan called CHAdeMO. The hope is that most will end up supporting SAE and CHAdeMO, but don’t expect the fast chargers at Nissan dealers, for example, to become i3 friendly anytime soon.
Where the i3 separates itself from the Leaf, though, is through the range-extender option. Though the engine is tiny (it’s a 2 cylinder displacing .65 liters) and the gas tank holds only 2.4 gallons, the extender will double the car’s range to 160 miles or more by keeping the battery charged. The practicality of stopping to refill the range extender every 80 miles means this isn’t designed to make a 400 mile trip from, say, San Francisco to Los Angeles. But New York to Washington, D.C. might not be out of the question.
To completely eliminate range concerns, though, BMW is offering an option to allow owners to rent an X5 SUV for up to several weeks per year to take a road trip. Cost is to be determined.
The i3, BMW says, is a true 4 seater and has the interior space of the 3-series sedan with an exterior footprint closer to the smaller 1 series. The extra room is one of the benefits of electrics and even the range extender option fits under the vehicle floor near the batteries. While the i3 is technically a 2-door hatchback, it has smaller back doors that are hinged in the rear allowing a wide opening that should make getting in and out fairly easy.
The other unique attribute of the i3 is that its the first production vehicle made with a substantial amount of carbon fiber, which is low in weight but high in strength and rigidity. The i3 is expected to come in at 2700 pounds, about 600 pounds lighter than the Leaf, but BMW is promising not to compromise safety. Given that the technology allows race-car drivers to survive crashes at 200 MPH, it’s certainly possible the claims are true.
The competition should worry
BMW’s entry into the green-car category is going to come with a marketing push that should strike fear into the hearts of every present and future competitor. Today’s reveal was heavy on present the company’s green credentials. BMW is touting its use of wind power at the factory and everything from recycled-plastic interior parts, to hemp-fiber door panels, to “responsibly-forested eucalyptus” dashboard trim.
In California, especially, where millionaires regularly drive the still-a-bit-weird Prius and it’s hard to go 5 minutes without seeing a Tesla in Silicon Valley, it’s easy to imagine the i3 being instantly popular. That’s true even though it starts at $42,275 and will get quite a bit more expensive from there. (BMW promises more details on pricing later this year, but did announce three trim levels called Mega, Giga, and Tera. You can get a preview.)
The range extender option pushes the start price even higher, to $46,125. But some perspective is in order. First, the i3 will be eligible for the federal tax credit of $7,500 and any state incentives. Second, it’s a BMW and the 3-series sedans start above $33,000. It’s also fairly competitive with the Chevrolet Volt — at least in theory. The Volt’s base price is right around $40,000 and it rises above $44,000 with its short menu of options (leather, GPS, some safety features).
But GM has been discounting the price down to $36,000 for a while and sales have jumped correspondingly. In fact, Volt sales went from being flat year-over-year through May to increasing 53% in June after the discount went into effect. Whether GM is motivated to sell more of this first-generation Volt at these prices hasn’t entirely been clear. Similar pricing was very successful in the second half of 2012 only to be reversed early in 2013.
If the Volt moves back into the $40,000-plus range, it moves back squarely into BMW’s territory. And while the Volt offers true “go-anywhere” driving thanks to a more standard-size gas tank that basically makes it a traditional vehicle once its 38-mile electric range is depleted, the way Volt’s are driven suggests many owners could consider an i3. Of the nearly 370 million miles Volt owners have put on their cars, 62% have been electric despite the relative small battery range.
GM knows from tens of thousands of owners what BMW learned from its testing: most days in the car don’t involve much driving. While the i3 won’t match the Volt’s range, it will outperform it to 60 mph, getting there in 7 seconds, BMW says. (The i3 is,however, limited to 93 MPH on the top end.)
And that kind of performance has interesting implications for Tesla, too. Not the current Model S, for which the small i3 isn’t any kind of competitor. But rather for Tesla’s upcoming “Gen III” model, expected to debut in 2016 or 2017 at a starting price of $35,000.
Tesla is looking for volume production in the hundreds of thousands for that smaller sedan and has BMW’s 3 series directly in its sights as well as a range of at least 200 miles. While the i3 won’t ship before next spring, it will get a 2-year head start on the Tesla. And while a gasoline range extender isn’t as appealing as a pure electric to aficionados, the more mainstream customer simply might not care, especially if the ability to add gas in 5 minutes means another 80 miles of range in a pinch.
The way the tax credits work, BMW will eventually sell enough i3s that its cars are no longer eligible and Tesla’s Musk is figuring by the time he launches his cheaper model, it won’t be either. So the pricing on both will be within a few thousand dollars of one another. There’s little doubt that the all-electric range will be far greater on the Tesla, but the i3 will have had time to build that market and the next-generation Volt will also be out by then (along with an improved Leaf in all probability).
It’s also fair to note that the marketplace is dynamic. Chevy has stated it intends to sell the newer Volt for $10,000 less than the current one but whether that reflects the Volt also losing the tax credit it hasn’t mentioned. It will, however, have to find pricing daylight between itself and BMW one way or the other if it wants to grow momentum behind the Volt.
None of this is to suggest that BMW has doomed Tesla or Chevy today by producing a funky-looking small car that is going to still give people range anxiety and might be too polarizing in appearance to even be a commercial success. But that kind of thing can be fixed if it proves a problem. So far, 92,000 people have signed up for a test drive online and BMW hopes to sell a “meaningful” number of cars.
The German automaker has joined the electric party at a time when it notes plug-in cars are still only about 0.1% of auto sales; the producers of the “Ultimate Driving Machine” intend to be the ultimate competitor for that market.
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