Thursday 13 November 2014

Has BMW Been Catching Up To Tesla In The EV Sector?


It is very rare when one can say BMW needs to catch up to someone in the automotive segment, but when it comes to the electric vehicles market, that statement might be valid. BMW is new at the EV game where companies like Tesla Motors have been at the forefront of this for years and have opened the doors for other automakers as well. Often seen as competitors, truth is that Tesla is not only helping BMW, but the entire industry of electric vehicles.
Tesla has been providing the upper-mid class of car owners the green solution they need with the Model S which was launched back in 2012. Only a handful of Model S units were sold that year, but that was followed by 22,000 deliveries in 2013. This year, Tesla Motors are now looking into delivering more than 33,000 cars.

On the other hand, BMW has not yet ventured in developing a luxury sedan powered only by electric motors, but it has still managed to put out the high-performer BMW i8, and the great, small and nimble BMW i3. Especially the latter one is selling in respectable numbers.
According to green energy website CleanTechnica, it seems that over the past three months sales for BMW’s fully electric i3 accounted for 4.9% of its total US sales – which is the highest share of total sales among all the car manufacturers that don’t strictly sell electric cars. What’s more important, the high share means an overall shift to the electric car technology as well.
For the first three months after its launch, the mid-range electric city car only made up 2.3% of BMW’s total U.S. sales, so the latest sales report show a healthy increase in overall sales and demand.
It was also reported earlier that the BMW i3 had outsold Tesla’s Model S in August. Sales for BMW i3 in the month totaled 1,025 units, a nice increase of 182% sequentially, while Tesla Model S sales came at 600 units, which is  54% lower over the same period last year.
While not competing directly now, the two automakers are on a collision path within the next 2-3 years. While BMW has their own share of sedan hybrid vehicles, a fully electric powered mid-range sedan has yet to arrive. The BMW i5 might be the solution.

On the other hand, Tesla Motors has yet to venture into the small city car electric vehicle product range, meaning the American automaker still relies mostly on the Model S for the time being. A 3 Series electric competitor is in works though and will arrive in 2017.
During a shareholder meeting in April, Tesla CEO, Elon Musk said, “We can produce something like the i3 or better than i3 right now, but it wouldn’t be great. It wouldn’t be amazing.”
While BMW has been catching up to the Tesla Motors in terms of electric vehicles, overall sales of vehicles in general is still very much on BMW’s side of the fence.
Both automakers need a subtle transition into different market; Tesla, on one hand, needs to expand its product range accordingly, while BMW needs to improve the i3 in the next iteration and also deliver new electric vehicles to the masses.
Sales and demand for the BMW i3 and BMW i8, and the Tesla Model S show that the electric vehicles market is ready and future, diversified products will cater to new demographics therefore increasing their market share.

The two companies are certainly at the forefront of the electric vehicles revolution, and both are also disrupting other industries as well. BMW is heavily invested in the production of carbon fiber reinforced plastic (CFRP), while Tesla is building their own battery factory.

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