Originally published on Gas2.
BMW has announced that it will have an all-electric 3 Series sedan on display at the Frankfurt Auto Show in September. The company is cutting a number of previously available options throughout its model lineup to pay for electric car research and development. Is there anything Elon Musk cannot disrupt?
When the Tesla Model 3 goes into production this month, buyers will have a choice of color and wheels. That’s about it. It’s all about manufacturing efficiency. It is cheaper to build 10,000 cars that are essentially identical than to build 10,000 cars that are significantly different from each other.
Here’s what we know about the electric BMW 3 Series. It will have a range of about 248 miles. That’s it. Pretty sketchy info, huh? Even though the the car will be first shown to the public in September, it may not be in showrooms for a year or more after the reveal. Clearly, BMW is feeling queasy about the Tesla Model 3 and wants to respond in any way possible.
But will the electric 3 Series be a purpose-built EV with the battery mounted low in the chassis and a frunk where the engine used to be? Or will it be a bastardization of the traditional 3 Series chassis, with batteries stuck here and there? Nobody knows. Just as nobody knows the size of the battery, whether dual motors will be an option, or the price. “Stay tuned” is about all anyone can say at the moment.
BMW says it has spent nearly $6 billion on electric car R&D recently and will continue to invest heavily in adding electric and plug-in hybrid cars to its selection of models. To help pay for all this, the company is taking a page from the Tesla playbook and simplifying the dizzying array of options and equipment levels in its product range. For instance, it now has more than 100 different steering wheels in its product mix.
“Our biggest lever is to reduce complexity and lower the amount of choices there are,” says Nicholas Peter, BMW’s chief financial officer. For a company that is accustomed to profit margins of between 8% and 10% on its cars, adjusting to life in a world of electric cars is painful. “Profitability on electric cars is definitely challenging,” Peter adds. “Our electrified cars are profitable today, but it’s less than vehicles with combustion engines. Models like our plug-in hybrids need to become more profitable and we need to cut costs to ensure we can meet our goals on profitability.”
As part of the austerity plan, manual transmissions will be eliminated from the company’s sporty 2 Series lineup. The number of steering wheels will be rationalized. Certain low-volume models will be discontinued. Instead of pursuing more pure electric cars like the i3 sedan, BMW says it prefers to invest in electrified versions of its current production cars. That may explain why the long-rumored i5 sedan has been axed from the company’s plans.
Elon Musk is on record saying he wants more companies to build “compelling electric cars.” If BMW is focused on reworking existing models to add batteries and electric motors, it’s hard to see how the resulting products will be “compelling.” And diesels aren’t dead at BMW yet either. “We won’t be able to meet regulation in Europe on CO2 without the diesel,” Peter says. “So we’re continuing to invest in the technology.”
It seems as though BMW has one foot planted in the past and another in the future. It is afraid to let go of what has worked so well for so many years and afraid to fully embrace the electric car future. Instead, it has adopted a sort of “muddling through” strategy like many of its peers. That may not be enough to guarantee its survival.
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