7 ms·

BMW's Electric Strategy Makes No Sense

49 points by valiant-comma 7y ago

netfl0 7y ago
Interesting analysis, but I wonder if they have plans the author is not aware of. BMW knows Tesla is eating their 3 series lunch. I’d be surprised if they had nothing up their sleeve.
- objektif 7y ago
  If it was anything imminent I think we would have known by now. If they do have a plan to reveal slmething 2-3 years from now it is already way too late.
  - netfl0 7y ago
    Why is that too late, I am curious if you have any source or data for that?
- tachyonbeam 7y ago
  As far as I know, no other car manufacturer has the battery production capacity Tesla has, and Tesla itself is limited by its own battery production capacity. It will take them years to catch up on that front.
  - clouddrover 7y ago
    > It will take them years to catch up on that front Not really. They'll just buy batteries from battery makers like CATL, LG, SK Innovations, Panasonic, etc. as well as pursue partnerships with companies like Northvolt: https://www.france24.com/en/20190502-asia-charge-electric-car-battery-production https://www.france24.com/en/20190502-asia-charge-electric-ca...
    - netfl0 7y ago
      This was my thought as well. Regarding modularity, batteries seem to be the easiest to deal with. I was always impressed with Tesla’s idea of laptop batteries, it essentially has not changed much. Lots of little batteries.
  - mikekchar 7y ago
    Serious question: Does Tesla actually have that capacity, though? My understanding (which may be wrong) is that Tesla batteries are being produced by Panasonic. The Toyota/Mazda/etc joint venture has revealed that they are going with Panasonic as well. Meanwhile the Panasonic/Tesla battery factory in South Korea has been shelved. I'm actually more than a bit curious if this will cause problems for Tesla in the near future. BTW, in case it's not obvious, I'm not that well versed in this, so nobody should read too much into my comments. I'm really just soliciting opinions from people who know more than me.
    - imtringued 7y ago
      EV companies are hesitant to invest into battery cell manufacturers because if they don't get an exclusive deal then they end up funding their competitors. Tesla probably solves this dilemma by leasing floor space to Panasonic inside the Gigafactories. Tesla will always be the highest paying customer because they don't have to pay shipping costs.
  - benj111 7y ago
    Panasonic was cancelling planned production increases not so long ago, have you got a link? http://thestoreyteller.online/2019/04/25/tesla-and-panasonic-halt-gigafactory-expansion/ http://thestoreyteller.online/2019/04/25/tesla-and-panasonic...
- dano 7y ago
  No kidding. I want to replace my aging 325i with an all electric 325e and there seems to be nothing on the horizon. I truly enjoy driving BMWs and would like to stay in the fold, but my next car will be electric.
- tonyedgecombe 7y ago
  I’m not sure that is the case, BMW have had eight consecutive years of growth. If they are suffering at all at the moment it is probably down to weak demand in China as much as anything. https://www.best-selling-cars.com/brands/2018-global-bmw-mini-rolls-royce-worldwide-sales/ https://www.best-selling-cars.com/brands/2018-global-bmw-min...
rsync 7y ago
"Eight years ago, it looked like BMW was positioning itself in a good place for the electric future." No, it didn't. They had a single, sub-brand model (the i3) that was neither technologically interesting nor performant. "It founded BMW i, a sub-brand to bring electrified products to its dealers" I didn't want a cutesy little i-car. I wanted an electric 7-series. There have been three model iterations of the 7-series since the Model S was revealed ... and they have nothing to show for all of that time. To auto makers: We don't want your electric car, we want your car, electric. "... BMW’s current plans as reported by InsideEVs, which include keeping the 6-year-old i3 around for a few more years and canceling the i8 entirely." The i8 was not an electric car - it was a a hybrid car with a little chainsaw engine inside that had worse performance than (I believe) even a base spec Tesla 3 series (for example). There was never a serious strategy and there were was a single (silly) e-mobile/i-car. I repeat: We don't want your "electric car", we want your car, electric.
- cnasc 7y ago
  > No, it didn't. They had a single, sub-brand model (the i3) that was neither technologically interesting nor performant. The i3 didn’t exist 8 years ago. What BMW did have then, and for some time before, was essentially a test fleet of electric 3-series sedans. They had a graphic applied to the sides so you could tell it was one of them. Those were essentially what you’re asking for, and what the article says was poised to be a sensible strategy. For whatever reason they decided to do the i sub brand instead, and that’s where there strategy makes no sense.
  - tdiggity 7y ago
    People loved these too. The problem was that you couldn’t buy the car after the lease was up, bmw wanted them all back to destroy.
    - foepys 7y ago
      Maybe they wanted them back to study the parts? It's a completely new type of vehicle for them so they might have wanted real world data about the components.
ivanstegic 7y ago
I thought there was an iX3 in the works? No mention of that.
mdorazio 7y ago
BMW's EV strategy makes perfect sense from a short-term perspective. Re-tooling factory lines for EV powertrains is expensive and time consuming. Coming up with a post-sales revenue model that doesn't rely on fixing/replacing ICE powertrain parts is hard. Scaling battery pack and related components production to meet potential demand for something like an electric 3-series is hard and expensive. Meanwhile, gas prices haven't shot through the roof and the overall auto market is shrinking, which is putting a lot of pressure on OEM margins. Is it a foolish long-term strategy? Yes. Does it make sense if your goal is to maximize profits over the next three years? Absolutely.
gok 7y ago
Traditional auto manufacturers are mostly approaching EVs the same way old mobile phone makers approached smartphones. They remain convinced that ICE cars (dumbphones) and hybrids (featurephones) will remain relevant indefinitely, even when there is ample evidence that BEVs (smartphones) are the only logical path forward. Without a dramatic change in course I don't see many of these car companies surviving another 15 years.
- xallace 7y ago
  > I don't see many of these car companies surviving another 15 years especially BMW, they are a very conservative brand. their whole culture revolves around old money, do they understand the future? do they care?
KaiserPro 7y ago
THe author dismisses the eletric mini out of hand. Unlike any other electric car on the market, its cheaper than the petrol model. That alone is far more disruptive than anything else. I accept that a lack of high end electric is bad, but not end of the world.
- thejenk 7y ago
  Is the electric mini cheaper than the standard 3 door hatch? The only price points I'm seeing are £16195 for petrol [1] and £24400 after UK incentives for the BEV [2]. [1]:https://www.mini.co.uk/en_GB/home/range/mini-3-door-hatch.html https://www.mini.co.uk/en_GB/home/range/mini-3-door-hatch.ht... [2]:https://www.mini.co.uk/en_GB/home/range/mini-electric.html https://www.mini.co.uk/en_GB/home/range/mini-electric.html
  - tonyedgecombe 7y ago
    It’s only cheaper if you compare it to the high end Cooper. It’s an exercise in positioning for BMW.
moneytide1 7y ago
I saw an ad for an electric BMW on Reddit today. The very first sentence was "forget other electric vehicles." This tells me that someone writing copy for a living was employed as a measure to somehow increase interest and sales. The only thing they could do was reference other companies that make EV's (I'm not even going to say the name of the one that everyone will automatically think of when instructed to "forget other EVs").
tibbydudeza 7y ago
BMW is a small car manufacturer but they will end up as SAAB or sold as brand to another company (VW) ... won't surprise me if Tesla takes over their 3 series market once they get better at mass manufacturing.| Toyota is another odd one ... they are still dreaming that Hydrogen fuel cells is the answer ... as a layman I will be thinking Hindenberg.
- fgonzag 7y ago
  2 million vehicles a year is small? Who's big then? Ford moved 2.5 million vehicles in 2018...
tjansen 7y ago
I remember reading that many of the assumptions BMW made for the i3 didn't hold true. The main design focus of the i3 was the expensive low-weight carbon-fiber body. They regretted that later when it turned out that the cars' weight didn't have that much of an impact on the efficiency. Also, when I drove an i3, I was seriously underwhelmed. It just felt too small to be practical and didn't drive well enough to be fun. I think Tesla's strategy of starting with large, expensive vehicles make more sense. Most people who can afford an expensive car don't want a tiny car.
- ErikCorry 7y ago
  Yes. The focus on weight makes perfect sense for their combustion engine cars, but they went totally overboard with it on the i3. The cost of all that carbon fibre made success impossible. The other big mistake was the 2 gallon petrol tank on the hybrid version. They had the opportunity to have the only hybrid on the market that has no gearbox, no complicated transmission, no clutch and a decent sized battery. But nobody wants to have to stop to fill up every 50-60 miles.
jerome-jh 7y ago
None of the EV strategies make sense from a CO2 emissions point of view, because producing batteries already emits the equivalent of driving the same petrol car for 80000 to 100000km. In countries where electricity is largely carbon based (such as Germany), the EV never offsets the CO2 emissions of the petrol one during its lifetime. Only hybrids make sense: it yields the largest fuel reduction per kg of battery, while still being usable cars.
- rhinoceraptor 7y ago
  The highest estimate for battery production I can find is 17.5 tonnes of CO2 for a 100kWh battery. Most EVs have smaller batteries than that. One liter of gas will produce about 9.3 kg of CO2 (including production and transport), so with an average fuel economy of 10.58 km/kg, you'd need to drive 20,000 km before the 100 kWh EV makes up for its battery. That's a little less than the average American drives in a year.

49 points by valiant-comma 7y ago

Interesting analysis, but I wonder if they have plans the author is not aware of. BMW knows Tesla is eating their 3 series lunch. I’d be surprised if they had nothing up their sleeve.

objektif 7y ago
If it was anything imminent I think we would have known by now. If they do have a plan to reveal slmething 2-3 years from now it is already way too late.
- netfl0 7y ago
  Why is that too late, I am curious if you have any source or data for that?
tachyonbeam 7y ago
As far as I know, no other car manufacturer has the battery production capacity Tesla has, and Tesla itself is limited by its own battery production capacity. It will take them years to catch up on that front.
- clouddrover 7y ago
  > It will take them years to catch up on that front Not really. They'll just buy batteries from battery makers like CATL, LG, SK Innovations, Panasonic, etc. as well as pursue partnerships with companies like Northvolt: https://www.france24.com/en/20190502-asia-charge-electric-car-battery-production https://www.france24.com/en/20190502-asia-charge-electric-ca...
  - netfl0 7y ago
    This was my thought as well. Regarding modularity, batteries seem to be the easiest to deal with. I was always impressed with Tesla’s idea of laptop batteries, it essentially has not changed much. Lots of little batteries.
- mikekchar 7y ago
  Serious question: Does Tesla actually have that capacity, though? My understanding (which may be wrong) is that Tesla batteries are being produced by Panasonic. The Toyota/Mazda/etc joint venture has revealed that they are going with Panasonic as well. Meanwhile the Panasonic/Tesla battery factory in South Korea has been shelved. I'm actually more than a bit curious if this will cause problems for Tesla in the near future. BTW, in case it's not obvious, I'm not that well versed in this, so nobody should read too much into my comments. I'm really just soliciting opinions from people who know more than me.
  - imtringued 7y ago
    EV companies are hesitant to invest into battery cell manufacturers because if they don't get an exclusive deal then they end up funding their competitors. Tesla probably solves this dilemma by leasing floor space to Panasonic inside the Gigafactories. Tesla will always be the highest paying customer because they don't have to pay shipping costs.
- benj111 7y ago
  Panasonic was cancelling planned production increases not so long ago, have you got a link? http://thestoreyteller.online/2019/04/25/tesla-and-panasonic-halt-gigafactory-expansion/ http://thestoreyteller.online/2019/04/25/tesla-and-panasonic...
dano 7y ago
No kidding. I want to replace my aging 325i with an all electric 325e and there seems to be nothing on the horizon. I truly enjoy driving BMWs and would like to stay in the fold, but my next car will be electric.
tonyedgecombe 7y ago
I’m not sure that is the case, BMW have had eight consecutive years of growth. If they are suffering at all at the moment it is probably down to weak demand in China as much as anything. https://www.best-selling-cars.com/brands/2018-global-bmw-mini-rolls-royce-worldwide-sales/ https://www.best-selling-cars.com/brands/2018-global-bmw-min...

rsync 7y ago

"Eight years ago, it looked like BMW was positioning itself in a good place for the electric future." No, it didn't. They had a single, sub-brand model (the i3) that was neither technologically interesting nor performant. "It founded BMW i, a sub-brand to bring electrified products to its dealers" I didn't want a cutesy little i-car. I wanted an electric 7-series. There have been three model iterations of the 7-series since the Model S was revealed ... and they have nothing to show for all of that time. To auto makers: We don't want your electric car, we want your car, electric. "... BMW’s current plans as reported by InsideEVs, which include keeping the 6-year-old i3 around for a few more years and canceling the i8 entirely." The i8 was not an electric car - it was a a hybrid car with a little chainsaw engine inside that had worse performance than (I believe) even a base spec Tesla 3 series (for example). There was never a serious strategy and there were was a single (silly) e-mobile/i-car. I repeat: We don't want your "electric car", we want your car, electric.

cnasc 7y ago
> No, it didn't. They had a single, sub-brand model (the i3) that was neither technologically interesting nor performant. The i3 didn’t exist 8 years ago. What BMW did have then, and for some time before, was essentially a test fleet of electric 3-series sedans. They had a graphic applied to the sides so you could tell it was one of them. Those were essentially what you’re asking for, and what the article says was poised to be a sensible strategy. For whatever reason they decided to do the i sub brand instead, and that’s where there strategy makes no sense.
- tdiggity 7y ago
  People loved these too. The problem was that you couldn’t buy the car after the lease was up, bmw wanted them all back to destroy.
  - foepys 7y ago
    Maybe they wanted them back to study the parts? It's a completely new type of vehicle for them so they might have wanted real world data about the components.

ivanstegic 7y ago

I thought there was an iX3 in the works? No mention of that.

mdorazio 7y ago

BMW's EV strategy makes perfect sense from a short-term perspective. Re-tooling factory lines for EV powertrains is expensive and time consuming. Coming up with a post-sales revenue model that doesn't rely on fixing/replacing ICE powertrain parts is hard. Scaling battery pack and related components production to meet potential demand for something like an electric 3-series is hard and expensive. Meanwhile, gas prices haven't shot through the roof and the overall auto market is shrinking, which is putting a lot of pressure on OEM margins. Is it a foolish long-term strategy? Yes. Does it make sense if your goal is to maximize profits over the next three years? Absolutely.

gok 7y ago

Traditional auto manufacturers are mostly approaching EVs the same way old mobile phone makers approached smartphones. They remain convinced that ICE cars (dumbphones) and hybrids (featurephones) will remain relevant indefinitely, even when there is ample evidence that BEVs (smartphones) are the only logical path forward. Without a dramatic change in course I don't see many of these car companies surviving another 15 years.

xallace 7y ago
> I don't see many of these car companies surviving another 15 years especially BMW, they are a very conservative brand. their whole culture revolves around old money, do they understand the future? do they care?

KaiserPro 7y ago

THe author dismisses the eletric mini out of hand. Unlike any other electric car on the market, its cheaper than the petrol model. That alone is far more disruptive than anything else. I accept that a lack of high end electric is bad, but not end of the world.

thejenk 7y ago
Is the electric mini cheaper than the standard 3 door hatch? The only price points I'm seeing are £16195 for petrol [1] and £24400 after UK incentives for the BEV [2]. [1]:https://www.mini.co.uk/en_GB/home/range/mini-3-door-hatch.html https://www.mini.co.uk/en_GB/home/range/mini-3-door-hatch.ht... [2]:https://www.mini.co.uk/en_GB/home/range/mini-electric.html https://www.mini.co.uk/en_GB/home/range/mini-electric.html
- tonyedgecombe 7y ago
  It’s only cheaper if you compare it to the high end Cooper. It’s an exercise in positioning for BMW.

moneytide1 7y ago

I saw an ad for an electric BMW on Reddit today. The very first sentence was "forget other electric vehicles." This tells me that someone writing copy for a living was employed as a measure to somehow increase interest and sales. The only thing they could do was reference other companies that make EV's (I'm not even going to say the name of the one that everyone will automatically think of when instructed to "forget other EVs").

tibbydudeza 7y ago

BMW is a small car manufacturer but they will end up as SAAB or sold as brand to another company (VW) ... won't surprise me if Tesla takes over their 3 series market once they get better at mass manufacturing.| Toyota is another odd one ... they are still dreaming that Hydrogen fuel cells is the answer ... as a layman I will be thinking Hindenberg.

fgonzag 7y ago
2 million vehicles a year is small? Who's big then? Ford moved 2.5 million vehicles in 2018...

tjansen 7y ago

I remember reading that many of the assumptions BMW made for the i3 didn't hold true. The main design focus of the i3 was the expensive low-weight carbon-fiber body. They regretted that later when it turned out that the cars' weight didn't have that much of an impact on the efficiency. Also, when I drove an i3, I was seriously underwhelmed. It just felt too small to be practical and didn't drive well enough to be fun. I think Tesla's strategy of starting with large, expensive vehicles make more sense. Most people who can afford an expensive car don't want a tiny car.

ErikCorry 7y ago
Yes. The focus on weight makes perfect sense for their combustion engine cars, but they went totally overboard with it on the i3. The cost of all that carbon fibre made success impossible. The other big mistake was the 2 gallon petrol tank on the hybrid version. They had the opportunity to have the only hybrid on the market that has no gearbox, no complicated transmission, no clutch and a decent sized battery. But nobody wants to have to stop to fill up every 50-60 miles.

jerome-jh 7y ago

None of the EV strategies make sense from a CO2 emissions point of view, because producing batteries already emits the equivalent of driving the same petrol car for 80000 to 100000km. In countries where electricity is largely carbon based (such as Germany), the EV never offsets the CO2 emissions of the petrol one during its lifetime. Only hybrids make sense: it yields the largest fuel reduction per kg of battery, while still being usable cars.

rhinoceraptor 7y ago
The highest estimate for battery production I can find is 17.5 tonnes of CO2 for a 100kWh battery. Most EVs have smaller batteries than that. One liter of gas will produce about 9.3 kg of CO2 (including production and transport), so with an average fuel economy of 10.58 km/kg, you'd need to drive 20,000 km before the 100 kWh EV makes up for its battery. That's a little less than the average American drives in a year.