It is innovative, small, and with a design that can best be described as cute. And it's as zippy as a bumper car at a fun fair.
Yet no BMW model is burdened with such high expectations as the electric-powered i3. Together with the hybrid gasoline-electric i8, it is expected to drive electric mobility forward and make the survival of BMW, a legend in the field of combustion-engine cars, easier in the era of merciless CO2 emission limits.
Now it's been on the market for a year, it's time for a progress update.
The targets for electric cars set by the German government are ambitious. It wants one million of the vehicles to be on the roads by 2020. This is seen as the private transport sector's contribution toward the goal of reducing carbon-dioxide emissions by 40 percent by 2030 compared to 1990.
But according to the German Federal Motor Transport Authority, there are currently barely 100,000 electric cars registered, including hybrids, some of which have only a very limited electric-power capacity. There is a real risk that in five years the industry will fail to meet Chancellor Angela Merkel's target. BMW's contribution in reaching the goal has been modest.
The vehicle emissions targets set by the European Union are also ambitious, and fines will be levied to enforce them. By 2021, all new cars must emit less than 95 grams of CO2 per kilometer. But the top producers negotiated slightly higher levels based on their fleet sizes.
BMW managed to get a rise to 102 grams of CO2, said Thomas Göttle from the consulting firm PA Consulting Group. But at the end of 2013, the average for BMW 's fleet of cars was 134 grams. According to Mr. Göttle's calculations, it will most likely be 105 grams in 2021. This means that BMW would face penalties of €50 million, or $62 million, not big money but devastating for the company's image.
We assume that we will be able to meet the limits. Penalty payments are not an option for us. BMW source
BMW is confident that fines can be avoided. “We assume that we will be able to meet the limits,” a company source at the firm's base in Munich said. “Penalty payments are not an option for us.”
The sales figures for BMW's i-series electric cars have so far been pretty meager. Global sales this year are likely to be around 20,000 i3s and i8s, but Norbert Reithofer, the head of the company, demands that it sell around 100,000 i-cars a year by 2021. That would be one percent of total sales. This means there's lots of room for improvement.
The company is already taking risks. Although Ian Robertson, chief of sales and marketing in the BMW Group, stated that BMW has been making money with the i-models from day one, he most likely didn't take into account the some €3 billion, or $3.73 billion, invested in their development.
The production infrastructure is remarkable. A production plant for ultralight carbon fiber was built especially in the small town of Moses Lake in Washington State in the United States, and in Germany, components for the car are made in three separate towns before assembly in Leipzig. At present, about 100 cars are rolling off the production line each day.
Electric mobility is also costing other car manufacturers a lot of cash. Wolfgang Bernhart, of the consulting firm Roland Berger, doubts if there's a strong business case for cars with non-combustion engines in the foreseeable future. This is particularly true of vehicles driven solely by battery. He calculates that “in the premium segment producers have to add a markup of €10,000 ($12,500).”
Although costs will fall – batteries, for example, are expected to cost about 30 percent less by 2020/21 – this will only mean a saving of around €1,500 in a typical medium-size electric car. “I don't expect other appreciable effects from lower costs in production until after 2020,” says Mr. Bernhart.
Even then imponderables remain, for example, the development of a network of charging stations. “I think expecting local power companies to volunteer on their own to build electric tank stations is rather unrealistic,” said Mr. Bernhart. “It simply doesn't pay for them to do it.”
The author is a freelance writer for Handelsblatt. To contact the author: [email protected]