Will BMW Be Tesla's First Competitor?

Tesla Motors (NASDAQ: TSLA  ) has made a huge splash with its all-electric Model S luxury sedan -- its first big move in its effort to become the electric-car version of Germany's BMW (NASDAQOTH: BAMXF  ) .

But now, BMW is making its own first move on to Tesla's turf. Executives said this week that BMW already had 100,000 people signed up to test drive the all-electric car it plans to launch this fall. Is it time for Tesla to worry? In this video, Fool.com contributor John Rosevear takes a closer look at BMW's new electric car -- and gives his take on how it's likely to affect Tesla's sales.

Tesla's plan to disrupt the global auto business has yielded spectacular results. But giant competitors are already moving to disrupt Tesla. Will the company be able to fend them off? The Motley Fool answers this question and more in our most in-depth Tesla research available. Get instant access by clicking here now.


Read/Post Comments (13) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 18, 2013, at 11:52 AM, calaiz wrote:

    The BMW i3 is not an "all electric" vehicle. It is a Fisker-like vehicle with a small combustion engine that extends the range by generating electricity. This is a hybrid. The EV mode range is 80-100 miles.

  • Report this Comment On June 18, 2013, at 12:01 PM, autoinsider wrote:

    None of Tesla's main components are proprietary. They don't have economy of scale for a mass market. Strip out their financial engineering and government subsidies and they are actually losing money on every car built. The majors will squash Tesla like a bug. Remember Tucker, Bricklin, DeLorean, Studebaker, American Motors..........Tesla?

  • Report this Comment On June 18, 2013, at 12:10 PM, ckgod wrote:

    BMW i3 is just a fancier and higher priced version of GM Volt. They are small hybrid cars with less than 100 mile of pure electric range. How much threats Volt has given to Tesla?

  • Report this Comment On June 18, 2013, at 12:16 PM, Grumpycat wrote:

    I wouldn't buy a volt with someone else's money.

    Please don't compare GM to BMW. No comparison,

    and yes, BMW is Tesla's next competitor.

  • Report this Comment On June 18, 2013, at 12:30 PM, jamesdan567 wrote:

    The I3 BMW does not compete with the Tesla S. The 745i and 750i, where BMW makes all its profits, are what compete with the Tesla S. The Tesla S has 95mpg EPA rates, the 745i is at 22mpg EPA rated. By buying a Tesla S you save $38K in gas costs over the life of the car, so obviously, The award winning Tesla is far less expensive going forward.

    Tesla is an EV, and the majors have nothing to compete with it. Some fellow says "oh the majors will squash it" -- why don't you go ahead and explain how...because your plain opinion with no facts is worthless.

  • Report this Comment On June 18, 2013, at 12:43 PM, ckgod wrote:

    No way Grumpycat. The tiny i3 that you still need to add gas for "extended range" costs close to $60000. It's a threat to your wallet only.

  • Report this Comment On June 18, 2013, at 1:09 PM, jeffhre wrote:

    "The BMW i3 is not an "all electric" vehicle. It is a Fisker-like vehicle with a small combustion engine that extends the range by generating electricity. This is a hybrid." - Calaiz

    Yes, but the gasoline generator/range extender is an add on option. The standard i3 is an 80 mile EV.

  • Report this Comment On June 18, 2013, at 1:21 PM, jeffhre wrote:

    "I wouldn't buy a volt with someone else's money. Please don't compare GM to BMW. No comparison, and yes, BMW is Tesla's next competitor." - Grumpycat

    The chief engineer of the i3 Frank Weber, is the Frank Weber who was chief engineer for the Volt. Despite your guts reaction, the Volt has the awards and customer satisfaction scores to prove it's execution is on point, in contrast to the emotional responses to GM as an automaker.

  • Report this Comment On June 18, 2013, at 1:37 PM, Petronilus wrote:

    BMW is just following in the footsteps of other brands in entering the EV market with a more entry level product and an insufficient range. It's conceptually a very wrong business model as early stage of new innovation is more costly and needs a higher margin only possible in higher-end models.

    In the smart phone market for example, high-end models are the ones carrying the latest of multi-core CPU technology, display technology, radio technology etc. Making an EV car with a too short range is like making a smart phone with the latest in 8 core technology while saving the money on less memory and display resolution to get the price to more mainstream pricing.

    Tesla seems the only brand really understanding the concept of new innovation introduction and where in a product lineup you must start to make an overall consistently appealing and still profitable product.

  • Report this Comment On June 18, 2013, at 1:54 PM, TMFMarlowe wrote:

    @jamesdan567, who recently suggested that I should drop dead, wrote thus:

    "Tesla is an EV, and the majors have nothing to compete with it. Some fellow says "oh the majors will squash it" -- why don't you go ahead and explain how...because your plain opinion with no facts is worthless."

    And I answer: Um, with a big pack of top-shelf battery cells and a purpose-built design, just like Tesla's. Tesla's battery-management software is cool, but that's an incremental advantage, not a moat. Do you seriously think there's some magic in there that giant professional automakers won't be able to duplicate or at least approximate, likely at a lower cost?

    (So why hasn't anyone stepped up with a Model S competitor yet? Because sales so far haven't been big enough to make a business case that a major automaker will find compelling. Meanwhile, they're doing their R&D in plain sight on the relative cheap, with short-range commuter EVs and plug-in hybrids. That's why I keep saying that if Tesla shows there's a sustainable market, THEN serious competitors will emerge. And that will put downward pressure on Tesla's margins, and that in turn will lead everyone to greatly lower their profit expectations, which is why I don't like the stock at current prices.)

    John Rosevear

  • Report this Comment On June 18, 2013, at 2:38 PM, syrgrad91 wrote:

    The BMW i3 was engineered from the ground up to be an EV, and was originally called the 'Megacity concept'. Yes, it has a limited range, however, it was never designed for extended range driving. Instead, it was designed to be a city car. In Europe, city cars are very common, while here in the US, with so much urban sprawl, the concept is not as well understood nor appreciated. Also, keep in mind that one of the reasons the range is so limited is that BMW engineered it as a balance between weight and range. The vehicle has a carbon-fiber body and other weight saving measures engineered into it. Because of this, BMW was able to use fewer batteries which, in turn saves on cost, weight and gives better range without having to use more batteries which add additional weight. Frankly, anyone who orders it with the range extender engine is defeating the purpose of this vehicle.

    As for competition with Tesla, both cars are in completely different classes both in terms of size, range and usage and cater to completely different buyers. The Tesla Model S is a large sports sedan with impressive performance, handling and range numbers, while the BMW i3 is a city car, nothing more. Unless BMW releases an electric vehicle comparable to their 7-series, they will be no threat to Tesla's current customer base. And for those naysayers out there, BMW could easily engineer a Model S competitor. Again, that's not the purpose of the i3.

  • Report this Comment On June 18, 2013, at 9:43 PM, markwb wrote:

    The new Cadi ELR ( that's Electric Long Range) its GMs first attempt to move upstream into TESLAs Turf.

    The Volt has hammered out the Teck, now its time to dance...

  • Report this Comment On June 19, 2013, at 5:03 PM, TMFBreakerRob wrote:

    Good job, John! You crammed a lot of info into 4 minutes. :)

    And a good response in the comment section. In my opinion (FWIW), you have a good grasp of the EV market and I think folks would do well to consider what you've said.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2495560, ~/Articles/ArticleHandler.aspx, 8/22/2014 11:51:26 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement