BMW (OTC: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.
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.
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.
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.