BMW says it’s not taking on Tesla for luxury EV buyers, but who’s kidding who?

BMW i3 and i8“Revenge of the Electric Car” was a must-see in 2011 – the sequel to the influential “Who Killed the Electric Car?” shifted gears and explored who might become the iconic leader of the reincarnated electric vehicle market – Tesla’s Elon Musk, GM’s Bob Lutz, Nissan’s Carlos Ghosn, or custom electric car do-it-yourselfer Greg “Gadget” Abbott. While watching the movie, I kept wondering:  What about BMW?

BMW was testing out the Mini E with US drivers during the time the Nissan Leaf and Chevrolet Volt made it to the market. Next came the BMW ActiveE and now the BMW i3, and the i8 plug-in hybrid is next. Maybe the problem was the German automaker didn’t have any recognized US “car guy” celebrity to star in a movie? Well, the game is changing and BMW is poised to take on Tesla Motors for market share in the luxury electric vehicle market – even if BMW or Tesla doesn’t admit that being the case.

BMW says that’s its upcoming i8 sports car is not competing directly with the Tesla Model S. It’s a supercar of the future with the driving performance of the BMW M3, and the plug-in hybrid gets more than 80 miles per gallon, BMW says. The i8 is being shown at the Frankfurt auto show next month and will go on sale in the US in early 2014. Pricing hasn’t been released but it’s going to be steep – something less than $150,000. BMW is obviously paying attention to how well the Tesla Model S has been doing this year in sales performance. BMW says that the i8 and Model S will be reaching different buyers – but both automakers are clearly targeting sophisticated, high-income consumers. Incentives/rebates do apply, but that doesn’t really matter much at these price points. Leasing takes some of the edge off of it, but it’s still got a limited market potential. German luxury automakers have known this for years but have been committed to battling competitors (including Japanese luxury brands) for more share.

What about the BMW i3 versus the Model S? It doesn’t appear to be competing directly with the Model S. The i3 is a hatchback with a starting price of $42,275 versus the Model S sedan that starts at about $70,000. It might be more comparable to the Tesla Model X crossover that will be launched in 2014 for a starting price around $35,000. Tesla says it will go 200 miles on a charge, while the i3 gets 80 to 100 miles on a charge. The i3 is getting a lot of raves out in the automotive media and cleantech space – it’s the first in the series of BMW electric cars and the German automaker has been masterful at marketing its image – tying into BMW’s legacy as a high-performance carmaker and also tapping into the grand theme of global urbanization, as depicted in the photo above.

During a recent investor quarterly conference call, Tesla CEO Elon Musk chuckled when asked by an analyst about the BMW i3. It wasn’t clear what was so funny with Musk and a group of co-workers inside the conference call room, but he is known for putting down competitors (just ask Henrik Fisker). “I’m glad to see did BMW is bringing in electric car to market. That’s cool. There’s room to improve on the i3 and I hope that they will,” Musk said.

 

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