The Worldwide Reveal of BMW's i3 Could Equal Trouble for Competitors

BMW (NASDAQOTH: BAMXF  ) is known for a number of things when it comes to cars: fast, sporty, renowned German engineering, and cutting-edge technology. However, on July 29, BMW added something completely new to its list of accomplishments: all-electric-car manufacturer. The company has pulled back the curtain on its highly anticipated i3 electric vehicle, marking its first venture into the all-electric-car market. Here's what you need to know.

BMW i3. Image source: BMW. 

A look at the i3
At first glimpse, it's easy to see that the rumors surrounding the appearance of the i3 are true -- it looks like the concept model. That's either good or bad, depending on your view of the i3 concept. I like it. But what I like even more are the specs.

The price of the i3 starts at $41,350 -- that's without federal or state credits. Standard on the i3 is a 170-horsepower, 184 pound-foot hybrid-synchronous electric motor with maximum revs of 11,400 rpm. BMW also says the i3 can go from 0 to 60 in 7.2 seconds and is capable of going 80 to 100 "real world" miles in comfort mode -- however, according to European Union test procedures, the i3 can go 118 miles per charge in comfort mode. Further, thanks to BMW's e-drive technology, the driver has the option of driving the i3 in an "EcoPro" mode that extends the initial range to 124 miles per charge. Plus, BMW's navigation system, Intelligent Emergency Call, anti-theft alarm, and Rear Parking Distance Control are all standard on the i3.

For those who want to roughly double the range, the i3 with Range Extender starts at $45,200. For that you'll get a rear-mounted, 34-hp, two-cylinder, 650cc gasoline-powered engine that works by maintaining the battery's charge, but never directly powering the wheels.

Finally, the i3 is the world's first mass-produced electric vehicle constructed of carbon-fiber-reinforced polymer, has a 50-50 weight distribution, and uses a 22kWh lithium-ion battery capable of recharging in three hours with the use of a 220-volt 32-amp charger. However, the SAE DC Combo Fast Charging option charges the i3 up to 80% in 20 minutes, and 100% in 30. As for driving performance, reviewers such as Edmunds and BBC's Top Gear test-drove the i3, and gave it rave reviews.

Coming Q2 2014
The i3 won't go on sale in the U.S. until Q2 of 2014. But once it does hit showrooms, the EV, which seats four, could definitely have an impact on General Motors' (NYSE: GE  ) 2014 Chevy Volt, which in 2012 was the best-selling EV with a starting price of $39,145 and is expected to undergo a price reduction this month, and Ford's (NYSE: F  ) 2014 Focus EV, which, after a recently announced price reduction of its own, will start at $35,200.

At the beginning of 2012, there were really only three comparable EVs available -- the Volt, Nissan's Leaf, and Toyota's (NYSE: TM) Prius Plug-In Hybrid (the first sales were reported in February 2012). Overall, the Prius Plug-In sold relatively well against comparable EVs -- in fact, it was the second best-selling plug-in.



Source: Inside EVs' Monthly Plug-in Sales Scorecard 

But in May, Ford saw its first sales of the Focus Electric. That was followed by more releases of EVs, and by 2013, there were a number of additional EVs available.



Source: Inside EVs' Monthly Plug-in Sales Scorecard 

Since the market gained more options for EVs, starting last November, Toyota has seen a steady decline in Prius Plug-In sales -- the opposite for sales of the Volt, Focus Electric, and Leaf.

There are a number of possible reasons. First, last October, Ford released the C-Max Energi, which had a sales jump in November. And second, last September, GM discounted Volt leases in an effort to regain market share -- and that, right there, is a key factor. EVs are a niche market, and although sales of EVs continue to have a small and overall upward trajectory, they are by no means growing by leaps and bounds. That means each EV that enters the market is competing for a small percentage of overall sales. Consequently, the i3's release is probably bad news for comparable EVs.

Further, the new i3 is a luxury-brand EV. The only other one is Tesla Motors' (NASDAQ: TSLA  ) Model S. And while the i3's standard configuration doesn't get near the range of the Model S, with the add-on of the range extender, the range of the i3 hovers at around 200 miles. So, for buyers who want a luxury-brand EV but may not want to shell out the extra cash for the Model S, the i3 is a viable option. It's too early to tell how this will play out, but considering EVs are still a niche market and it's the first time the Model S has had company in the luxury EV market, it's something to watch.

BMW enters the EV ring
So far, the i3 has received a great deal of praise. However, the i3, while being backed by BMW's reputation, is still a new model. Consequently, it may have a few kinks that need to be worked out. But so far, the i3 looks promising. More pointedly, BMW is adding to the i3 launch with some interesting plays. First, it's teaming up with U.K.-based EV charging-station provider Chargemaster, in a venture to build fast-charge ChargeNow stations across the U.K. for BMW's new i-Series. True, these charging stations are only for the U.K., but considering the U.S is currently BMW's largest market by sales, building quick-charge stations in the U.S. isn't out of the question.

What's more, later in 2014, BMW is releasing its i8 extended-range plug-in hybrid. Considering that the rumors regarding the look of the i3 were true, the reveal of the i8 is something car enthusiasts should keep a close eye on.

All of these moves added together show that BMW is going full-speed ahead into the EV market and, as such, is something investors should continue to monitor -- especially for how this could affect comparable EVs.

EVs are still a niche market, and there's no guarantee they'll take off. However, Ford has its hand in EVs and in one of the fastest growing-markets in the world, China. It's is already the world's largest auto market -- and it's set to grow even bigger in the coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names Ford, and one other global giant, poised to reap big gains that could drive big rewards for investors. You can read this report right now for free -- just click here for instant access.



Read/Post Comments (12) | Recommend This Article (7)

Comments from our Foolish Readers

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  • Report this Comment On August 03, 2013, at 10:50 AM, AlaaSadek wrote:

    You say Coming Q2 2014. Isn't that a long wait? By 2014 Q1 the Tesla Model X will be out and maybe a new Roadster AND maybe a Tesla electric Truck. Now how will BMW compete with Tesla then or even now?

    I see a trend here that all the big 3 came out with small cars like the Focus the Spark and the Fiat 5oo. Now this i3 comfirms my trend!

    I wonder why all of them are not coming up with something of the Model S size?

  • Report this Comment On August 03, 2013, at 11:39 AM, AdamSssss wrote:

    There are two big problems with the i3 - 1) It's hideously ugly, just like every other plug-in electric except the Model S. 2) BMW's reputation for reliability is atrocious according to every BMW owner I've ever spoken to, including several who continue to swear by the brand despite innumerable problems.

  • Report this Comment On August 03, 2013, at 12:03 PM, Soflason wrote:

    Here is the best head to head comparison between BMW i3 and Tesla Model S:

    http://www.slate.com/blogs/future_tense/2013/07/29/bmw_i3_re...

  • Report this Comment On August 03, 2013, at 12:05 PM, Ustauber wrote:

    Let me get this clear, the range extender is a 2 cycle motor on the back of the Bmw I3 that powers and gives juice to the battery.

    Lol. Is like having an all charcoal grill power by propane gas?

    C'mon BMW is this all you came out with !!

  • Report this Comment On August 03, 2013, at 12:09 PM, Ustauber wrote:

    Have you ever drove by your local BMW dealer and notice the very very large amount of used and new cars waiting for the pushy salesman to be sold.

    All the sales employees are standing on front of their building smoking and waiting for pray .

  • Report this Comment On August 03, 2013, at 1:11 PM, jamesdan567 wrote:

    the BMW I8 will have a retail price of $140K. So we can all imagine how few cars will actually be sold.

    The BMW i3 competes directly with the Chevy Volt and the Nissan Leaf. Its embarrassing itself compared to the Tesla Model S.

    The Tesla Model X will not be shipping before Q3 of 2014. The Roadster is just a nice niche car. The Tesla Truck will likely not be around before mid 2016 or early 2017 at best.

    Tesla has such an advantage in range, quality and battery safety that people will wait to buy the Model X and the Gen III models....

    But, expect more. 4-5 models for Tesla is just barely scratching the surface of their plans.

  • Report this Comment On August 03, 2013, at 1:20 PM, Soflason wrote:

    The only real competition for Model S could be BMW i8 -- the i3 has the EV range of Nissan Leaf for context. But even the i8 pales in comparison, no one can seem to come close to Model S and the competition seems to be backing away from a direct battle... two articles present some compelling analysis:

    http://seekingalpha.com/article/1508662-teslas-competitors-a...

    http://insideevs.com/tesla-model-s-is-slowly-but-surely-elim...

  • Report this Comment On August 03, 2013, at 4:38 PM, rand49er wrote:

    That thing is butt ugly.

  • Report this Comment On August 04, 2013, at 3:09 AM, TurbulentTime wrote:

    It looks kind of like the cars that my 7 years old draws .... Hmmmm, who designs this thing?

  • Report this Comment On August 04, 2013, at 3:10 AM, TurbulentTime wrote:

    It looks like the cars which my 7-year-old draws .... Does BMW spend $70,000 for someone to design this thing?

  • Report this Comment On August 04, 2013, at 12:07 PM, sranger wrote:

    I really like this car. It's exterior and interior are quite different.I think it is futristic and it appeals to the engineer in me because it is a very efficient design... You appear to get a lot of room in a small package...

    I am an easy sale, however, because I already own an EV with an 80-90 mile range and now how efficient and fun it is to drive. Most would also think it is ugly, but I love it any way. (www.EVThing.me)

    This Tesla is a better car in terms of range and performance, but it is also at lease $28,000 more expensive and less energy efficient due to the extra weight.

    60Kwhr Model S, 208 Mile Range, No options = $70,000 and consumes 288 Watt Hr per mile.

    85Kwhr Model S, 265 Mile Range, No options =

    $82,000 and consumes 320 Watt Hr per mile.

    22Kwhr i3, 90 Mile Range, No options = $42,000 and consumes 244 watt hr per mile.

    It will be interesting to see what the GEN III Tesla is like, but it is at least 5 years away mainly because even Elon has admitted that you cannot do a $35K 200 mile car with current battery technology. Also, once the battery tech is available, it will most likely be available to ALL manufactures, not simply a Tesla exclusive.

  • Report this Comment On August 05, 2013, at 9:58 AM, jeffhre wrote:

    "The Worldwide Reveal of BMW's i3 Could Equal Trouble for Competitors"

    It certainly could, if any OEM's were producing competitors. IMO it appears that BMW has introduced enough variations on the EV theme for this price point and type to introduce a vehicle for market expansion, as opposed to a direct competitor or substitute for other EV's.

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