By Tim Higgins
After seeing lackluster results with its pricey line of niche
electric vehicles, BMW AG will take a more aggressive swipe at
Tesla Motors Inc. by offering electrified versions of entire lineup
of luxury vehicles.
BMW Chief Executive Officer Harald Krüger, speaking with
journalists Tuesday, said the German auto maker "will
systematically electrify all brands and model series." The
company's electric i3 small car and i8 sports car have been praised
as engineering marvels, but the auto maker's move to electrify more
popular mainstream models -- including crossover sport-utility
vehicles -- could help BMW better meet tightening emissions
standards.
Auto makers are placing bigger bets on electrification as
regulators in Europe, the U.S. and China demand improved emissions
over the next decade. Mr. Krüger, spending the past year bolstering
the company's tech pursuits, including the announcement last month
that an all-electric Mini brand vehicle will arrive in 2019
followed in 2020 by an electric version of BMW X3 sport-utility
vehicle.
"It's only possible to achieve this one in the next phase by
building on the previous steps," Mr. Krüger said in an interview.
BMW's sales in the U.S. have been sluggish in 2016, and the
executive was visiting America -- considered the world's most
profitable auto market -- as part of a centennial celebration for
the company.
Volkswagen AG and Daimler AG have also accelerated plans for EVs
despite modest demand for them. Tesla, considered a leader among
luxury electric-vehicle makers, aims to launch a cheaper Model 3 in
2017, a move that will be met by fresh battery-powered offerings
from Audi, Mercedes, Porsche and other high-end brands.
Cheap fuel, inadequate infrastructure and fears about battery
range have tamped down demand for EVs. Auto makers will need to
invest more to move electrics up on buyer shopping lists, analysts
say.
Volkswagen for example, plans 30 new electric vehicles during
the next decade and for one in four of its cars sold to be pure
electric or plug-in hybrid by 2025.
"It comes down to 'bang for your buck,'" Jeff Schuster, an
industry analyst with LMC Automotive, said Tuesday. "For the German
brands, EVs have to have high penetration for them to get anywhere
near the emission targets and BMW won't be able to do it with [the
i3 and i8] lineup."
In addition to electric, Mr. Krüger has expanded BMW's focus on
autonomous-vehicle research, also following a trend in the global
car business. The company recently announcing a deal with chip
maker Intel Corp. and auto supplier Mobileye NV, which makes the
systems needed for self-driving cars, to team up to make a fully
autonomous vehicle by 2021.
When it comes to electric vehicles, BMW is considered a
first-move. BMW's i brand was launched in 2014 as part of the auto
maker's efforts to address growing interest in electric
vehicles.
The move came after Tesla's Model S's 2012 debut, costing as
much as premium Mercedes luxury sedans, surprised the industry with
rapid success with buyers and traditional auto enthusiasts. The i8
plug-in hybrid, with a $140,700 base price, was aimed at the
high-end to attract attention for the brand while the compact,
battery-electric i3, starting at $42,400, was to appeal to more
mainstream buyers in big cities.
Sales didn't take off. In the U.S., for example, BMW sold 391 i3
cars last month, a 77% decline from a year ago, according to
Autodata Corp., which tracks sales.
Globally, it sold about 25,000 of the i3 last year. Mr. Krüger
said the company should sell a total of about 60,000 electric
vehicles this year, including plug-in hybrids.
Tesla, by contrast, is on track to build 80,000 electric SUVs
and sedans and aims for 500,000 by 2018. The Tesla Model 3, which
will aim at the popular BMW 3-Series, is "not a threat," Mr. Krüger
said. "We welcome competition."
The i3's odd look may have been a reason for limited appeal,
Rebecca Lindland, senior director of commercial insights for Kelley
Blue Book, said. "It really must've been the appearance of the
vehicle, it's not the most attractive, neither is the Prius, but
the Tesla is," she said. "If you're going to pick between the two,
you're going to pick a Tesla almost every time if only from the
emotional part of it."
Mr. Krüger said the company hasn't decided to make an electric
version of the 3-Series, but "I'm open to ideas."
Write to Tim Higgins at tim.higgins@wsj.com
(END) Dow Jones Newswires
October 11, 2016 19:47 ET (23:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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