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BERLIN—BMW AG has lost the core development team of its i3 and i8 electric vehicle line to Future Mobility Corp, a Chinese startup backed by Tencent Holdings, as the German premium brand struggles to come up with a convincing answer to competitor Tesla Motors Inc.

Carsten Breitfeld, a 20-year BMW veteran who developed the company's i8 plug-in hybrid sports car, left the Munich-based car maker last month to become chief executive of the Chinese electric car company. Now, three key executives from the "BMW i" electric car group are following him.

Dirk Abendroth, who developed electric powertrains for the i-series, Benoit Jacob, who was head of design at BMW i, and Henrik Wenders, head of BMW i product management, will take up positions at Future Mobility, according to two people familiar with the situation.

BMW declined to comment on whether the executives had departed.

The defections come as BMW and other premium brand manufacturers are struggling with weak sales of their electric vehicles and a growing threat from new rivals in the nascent electric car market.

BMW unveiled the i3 battery electric vehicle at the Frankfurt Motor Show in 2011 and began selling the vehicle two years later. The i3, marketed as an ecological city car, was soon followed by the futuristic i8 plug-in hybrid sports car.

But sales haven't lived up to the hype, and BMW has slowed development of future models. Last year, BMW sold 24,057 i3 models, and 5,456 i8 models, a 66% increase in BMW i division sales.

Wieland Bruch, a BMW spokesman, said the BMW i products have been very successful in their individual market segments. The i8 is the best-selling plug-in sports car, he said in an email.

But the defection of BMW i's core development team suggests that BMW's strategy of developing niche products at time when Tesla Motors Inc. is moving into the mass market could make it harder for BMW to attract and retain young talent in the future.

After launching with much fanfare in 2013, the i3 has changed little and there are few plans for further development of the brand.

The i3 will get a new battery extending its range and a open-top derivative of the i8 is also planned. But a long-awaited third model in the i-series won't be launched before 2020, Chief Executive Harald Krü ger said recently.

"That's too long for young people who want to change the world," a person close to the company said.

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

April 20, 2016 02:55 ET (06:55 GMT)

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