BMW’s i3 is Here, Will it Increase BMW’s Market Share?

BMW has embraced electric cars and hybridization in a big way, launching the hot-selling i3 electric city car and the exciting BMW i8 electric supercar to rave reviews already. BMW isn’t finished yet, though, and has plans to electrify even more of its models, including the German company’s other sub-brand, Mini.

The real question for industry-watchers, then, isn’t “can BMW sell electric cars?” Rather, it seems to be “will BMW’s electric cars increase the company’s overall market share?” That’s the question Zachary Shahan is asking over at our sister site, EV Obsession, and we’ve reproduced his article, below. Enjoy!

Will The BMW i Lineup Boost BMW’s Market Share?

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I’ve discussed it many times: I’m confident that electric vehicles will replace gasmobiles within the next decade or so. There are so many clear benefits that electric cars have over gasmobiles, including convenience, acceleration, and drive quality.

Electric car sales more than tripled from 2010 to 2011, increased 2½ times from 2011 to 2012, and more than doubled again from the end of 2012 to the end of 2013. As some have explained, electric cars may be ~50% of the way toward market domination. Battery costs have come down fast, which is an important driver of that growth, and that trend isn’t likely to stop anytime soon, especially as it is getting boosted by economies of scale.

You would think that industry insiders would see the writing on the wall: electric vehicles are coming, and they are coming to take over the market. However, as we’ve seen many times before, established industries have a lot of inertia and industry insiders have a hard time seeing that they need to transition to a disruptive technology… or be eaten. It has happened in many industries, but I like to call it “the Kodak moment,” in reference to Kodak’s great fall and a slogan that teenagers today have probably never heard (because of Kodak’s great fall).

Industry Inertia & Denial

The automobile industry is one of the largest in the world, and I think that only increases industry inertia and denial. However, a few major auto manufacturers seem to see what’s around the corner. Nissan-Renault is one of them, with strong statements coming from Chairman and CEO Carlos Ghosn about the future of electric vehicles, and I’d say the other big proponent of the electric vehicle future among major automakers is German giant BMW.

BMW Already Benefiting From BMW i Lineup

BMW hasn’t just introduced a couple of electric cars. It hasn’t simply modified gas versions of vehicles to make them electric, like most auto manufacturers have done. No, it has an entire program focused on developing electric cars. Its BMW i program, as it’s called, was kicked off in 2013 with the launch of the BMW i3 and the BMW i8 plug-in hybrid electric supercar. However, BMW plans to eventually have electric versions of all of its vehicles.

The BMW i3 is very nicely priced between the Tesla Model S and the Nissan Leaf, and its performance fits the pricing. It is a clear performance and comfort level above most electric cars. As I wrote when I reviewed the i3, it’s the nicest car I’ve ever driven (Note: I’ve driven a number of nice gasmobiles, but not a Tesla Model S).

Not surprisingly, the i3 is bringing in a lot of first-time BMW customers. In fact, last I read, 80% of BMW i3 buyers came from other brands. That’s impressive, and a great sign that BMW is moving in the right direction.

BMW is bringing the i3 to the Chinese market later this year. It is supposed to be selling it all around the US, not just in select markets (like many automakers do with the electric options). It is selling the i3 across its home country of Germany, as well as much of Europe. And it already has a nice market of supplementary BMW i3 products.

But it’s not just about where you are selling and to whom you are selling; it’s how much you are selling.

Luckily, the news is good on that front as well. Earlier this year, BMW announced that it would be increasing production to match strong demand.

We don’t know for sure which car companies are going to lead the electric car market once it grows to dominate the overall car market, but history has shown that companies that lead the way into a new market tend to benefit greatly from that leadership. Look at Toyota’s success in the hybrid market. Look at Google’s success in the search engine market. Look at Microsoft’s success in the software market. Look at Apple’s success! BMW is certainly one of the first serious movers in the electric vehicle market. It has an aim of selling 100,000 electric vehicles by 2020, which isn’t a great amount, but for it’s higher-end target market, that may not be a bad target. Furthermore, BMW is one of the only companies I’ve seen announce electric car sales targets.

Also, targets can be raised. In fact, it’s quite good press to say that you are exceeding your targets. I wouldn’t be surprised if we saw BMW raise its electric car sales targets before too long. Eventually, I think BMW could see strong market growth from being bullish about electric cars. But we’ll have to see how bullish it ends up being, how innovative, and how much better than the competition.

Source: EV Obsession.

2015 Porsche Panamera E-Hybrid Lifts Sales

Sales of the Porsche Panamera are up to 13,500 units so far in 2014, a 28% increase. Of those, fully 10% were Panamera E-Hybrids, helping lift sales a lot. Porsche is having a very good year so far. Sales during the first half of 2014 were up 8% to 87,800 units, and of that total, 30,000 cars were delivered to European customers, 23,000 went to the US market and 19,800 to China.

Worldwide, the best selling Porsche model remains the Cayenne, with 37,200 units, followed by the 911 with 15,615 sold. Purists have always put the knock on Porsche for selling “trucks” (even though the Cayenne is a very, very nice truck) but clearly the corporate bottom line has been fattened considerably by doing so, since the Cayenne outsells the 911 by more than 2 to 1.

As for the Panamera E Hybrids, they’re equipped with an electric motor that adds 95 hp, more than double the 47 HP of the previous hybrid model for a grand total of 416 ponies.  The hybrid has a 9.4 kWh lithium-ion battery which can be fully charged in about 2.5 hours via the integrated on-board charging system and the standard Porsche Universal Charger (AC) when connected to a 240V power source.

The Panamera S E-Hybrid, which starts in the US at $99,000, accelerates to 60 mph in 5.2 seconds on its way to a top speed of 167 mph.  Porsche expect Panamera sales to more than double this year with the hybrid model, and with so many buyers opting for the plug-in hybrid version, it would make sense that Porsche want to add that capability to its best selling vehicle, the Cayenne.

Are you listening, Porsche?

Will There Be Enough Batteries For Tomorrow’s Cars?

The age of  hybrid and electric automobiles is truly upon us, with more than 100,000 such cars added to American roads just last year. In 2013, worldwide capacity for automotive lithium-ion batteries stood at 4,400 megawatt-hours. By 2020, production could increase by more than ten times that amount to over 49,000 megawatt-hours,  according to a report from Navigant Research.

Says David Alexander, senior research analyst at Navigant:

“Li-ion technology continues to improve, as increased energy densities translate into smaller and lighter battery packs with more power. At the same time, leading battery cell manufacturers have built new factories utilizing the latest production techniques, including greater automation and faster throughput. This will lead to a reduction in the cost per kilowatt-hour (kWh) over the next few years, provided that volumes continue to increase.”

Those rosy predictions aside, demand for electric cars is exploding and the batteries they require are typically bigger and more powerful – up to 80 kWh – than those found in plug-in hybrids, where 4 to 16 kWh batteries are the norm. Will there be enough batteries for everybody? And who will produce them?

Once Tesla’s gigafactory gets up and running, it should be able to manufacture a half million units a year – enough for about 50% of the anticipated worldwide demand in 2020. With the value of the total battery market approaching $25 billion annually by then, plenty of other companies will be vying for that business as well, which means supply should be more than adequate for industry needs in the near term.

But that leaves two questions unanswered. What about technological change in battery technology? And how does the world recycle all those lithium-ion batteries?

One answer may be the cotton battery, which is more environmentally friendly, charges 20 times faster and runs cooler than lithium-ion batteries. Plenty of other research programs around the world are going flat out to develop new battery technology as well. Will the Tesla gigafactory be able to keep pace with changes in the field?  Or will it wind up building batteries that nobody wants?

No one knows the answers at this time. But with $25 billion a year at stake, we can be sure that the pursuit of that market will be intensely competitive. Check back with me in 5 years. Chances are the solutions of the future haven’t even been thought of yet.

Source: Gas2