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BMW will surely innovate in some regards, no question. But the real issue is if they can keep up with Tesla and disrupt their own 3 Series market. BMW is like

BMW will surely innovate in some regards, no question. But the real issue is if they can keep up with Tesla and disrupt their own 3 Series market. BMW is likely not to release or innovate on a new product that will cannibalize their main source of income (3 series sales). They're probably incrementally try to improve the 3 Series. And they'll release sub-par electric cars like the i3 and i8 (http://www.bmw-i-usa.com/en_us/bmw-i3/ http://www.bmw-i-usa.com/en_us/bmw-i3/) that won't hurt 3 Series sales. What BMW doesn't see is that Tesla is gunning for the 3 Series market with the GenIII car. Tesla is confident they can make a substantially better car than the 3 series (or Lexus IS, Audi A4, etc) in most regards and make it priced competitively. I don't think BMW is taking Tesla seriously... they're more focused on existing competitors. If Tesla succeeds in making a substantially better car than the 3 Series that's priced competitively, then everybody in that market (BMW 3 Series, Mercedes C, Lexus IS, Audi4, etc.) will be in catch up mode. And that will the story of the decade in the car industry... how a scrappy Silicon Valley startup did the impossible to the auto industry.

fghh45sdfhr3 14y ago
The fact that most of the time market leaders resist cannibalizing the main source of their income is well known. The reasons are complex and connected to the nature of large human organizations. And it is also why most truly disruptive innovation is driven by smaller companies.
- ryanhuff 14y ago
  Automobile manufacturers already offer petrol and diesel engine vehicles. How is this any different from a cannibalization perspective?
  - jessaustin 14y ago
    This cannibalization argument is the same reason that Henry Ford only sold black cars. Car companies didn't (actually, if you go back long enough ago, they did, but they're over it now) have to transform their company and manufacturing processes in radical ways when they began offering both types of fuel, any more than had to when they began offering multiple cylinder displacement options (2.0L, 454cc, etc.) Diesel and gas engines both require fuel systems, radiators, alternators, air intakes, exhaust pipes with mufflers, transmissions, etc. It is actually possible (although not always easy) to just replace one type of engine with the other in a user-owned car, so much more in the factory. It is quite another thing to rip out everything involved in the motive function, except the axles, wheels, and tires. If BMW wait too long to start the process, they won't get the results to a BMW quality level for many years. They'll have to decide whether they want to saddle the brand image with crappy electrical cars or if they'd prefer to sell their crappy electrical cars with a low-prestige marque.
el_cuadrado 14y ago
BMW has been making ActivE (all-electric 1 series) for a while now. They are not released to general public because, well, the technology is not good enough yet - and BMW is not under pressure of bankruptcy.

fghh45sdfhr3 14y ago

The fact that most of the time market leaders resist cannibalizing the main source of their income is well known. The reasons are complex and connected to the nature of large human organizations. And it is also why most truly disruptive innovation is driven by smaller companies.

ryanhuff 14y ago
Automobile manufacturers already offer petrol and diesel engine vehicles. How is this any different from a cannibalization perspective?
- jessaustin 14y ago
  This cannibalization argument is the same reason that Henry Ford only sold black cars. Car companies didn't (actually, if you go back long enough ago, they did, but they're over it now) have to transform their company and manufacturing processes in radical ways when they began offering both types of fuel, any more than had to when they began offering multiple cylinder displacement options (2.0L, 454cc, etc.) Diesel and gas engines both require fuel systems, radiators, alternators, air intakes, exhaust pipes with mufflers, transmissions, etc. It is actually possible (although not always easy) to just replace one type of engine with the other in a user-owned car, so much more in the factory. It is quite another thing to rip out everything involved in the motive function, except the axles, wheels, and tires. If BMW wait too long to start the process, they won't get the results to a BMW quality level for many years. They'll have to decide whether they want to saddle the brand image with crappy electrical cars or if they'd prefer to sell their crappy electrical cars with a low-prestige marque.

el_cuadrado 14y ago

BMW has been making ActivE (all-electric 1 series) for a while now. They are not released to general public because, well, the technology is not good enough yet - and BMW is not under pressure of bankruptcy.