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BMW Going All-Electric

BMW Going All-Electric

The age of electric vehicles may finally be upon us – or at least that’s what BMW is banking on. BMW recently announced that it will convert all models to electric drive trains, range-extending engines, and plug-in hybrids over the next decade in response to a coming series of strict EU carbon emissions laws. The company’s 3 Series sport sedans will even become plug-ins. The transition is a dramatic statement from one of the world’s most recognized and well-regarded car brands.

The change would also be a huge shift for the firm. BMW introduced the first of its eco-friendly alternative fuel i-series vehicles last year. That car, while well received by electric vehicle standards, sold less than 18,000 units worldwide in 2014. That made it the 4th best-selling EV in the U.S. region. The fact that the car is considered a success while selling so few units, shows just how far the world has to go to truly embrace EVs. Related: Is OPEC Too Big To Fail? Not Anymore

In fact, electric vehicles have consistently fallen well short of many proponents’ ambitions. For instance in 2008, then Senator Barack Obama set a lofty goal – seeing the U.S. field one million EVs by 2015. That didn’t happen. As of mid-2014, the total number of EVs on the road sat just below 200,000. Research consulting firm Navigant does not foresee having 1 million vehicles on the road until beyond 2025 (when its current forecasts end). Even that figure of 1 million vehicles would be a sliver of the total vehicle market.

Time will tell what effect BMW’s move to an electric focus will have, but at this stage EVs still appear very much in their infancy, and if BMW’s change goes through as advertised it could represent a seismic shift in the market. BMW is pushing forward with other electric initiatives including its first all-electric tractor trailer. Germany has not been a major EV market in the past, but this move could change the situation going forward. Related: California Oil Bill Defeated

One question that BMW’s announcement raises though, is what effect a known brand name going all electric will have on the market? It’s possible that BMWs will prove to be supremely attractive electric vehicles and the announcement will jump start that market. That seems unlikely though given the limited demand for the company’s existing EVs. What’s more plausible is that consumers may, in effect, be forced to buy an EV if they want a BMW. It is also possible that BMW’s move will spur other car makers to follow suit.

The fundamental problem with EVs so far seems to be that consumers simply do not want the product in many cases. The electric tractor trailer highlights one of the major reasons for that lack of interest from consumers – limited vehicle range. The BMW all electric tractor trailer has a range of roughly 62 miles per charge for instance. That is so limited that the truck will only be useful for around-town trips. Related: Decline In U.S. Oil Production Accelerates

Of course, EV ranges are rising slowly especially as vehicle weights come down, and BMW has years to improve the product. Nonetheless, it’s not clear that consumers want what EU regulations are going to force them to take. Thus, if the age of the internal combustion engine really is coming to an end, it may be driven as much by stringent regulation as by genuine shifts in consumer preferences.

By Michael McDonald of Oilprice.com

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  • John B on September 13 2015 said:
    Now that I have driven a BMW i3 for a year , I consider it a fantastic vehicle. I'm guessing that 2025 for 1M EVs is off the mark..I'd say by 2020 we'll see that 1M mark hit..then hold on to your hat.

    Range has not been a problem for our local metro driving in the Phoenix AZ area. We get a solid 90 miles on a full charge, and easily recharge over night using our standard 120v power outlets. Range anxiety is an innate fear in so many, and I agree this will be hard to over come. But once we see 200 mile range BEVs, and understand their superior performance and maintenance schedule, I think the adoption of EVs will be as rapid as the adoption of smart phone, video streaming, and the connected society.

    Then once gas stations bite the bullet and provide charging stations with supercharging capacity as Tesla has done..we'll see range anxiety disappear.

    Also, my solar panels were a big incentive for switching to BEV..the savings are incredible. I think the oil industry is has to face these changes, but unlike other industries I hope the understand the future and adapt ...I'd sure hate to see my oil stocks sink any further.
  • John G on September 14 2015 said:
    I've had a Leaf going on 5 years (I lease so this is my 2nd) with solar PV (net metering) to charge it, a combination that can't be beat. I'd rather be driving a Tesla, though. I think BMW recognizes a twofer opportunity/threat: EU's regulations and Tesla's product/business model. I think Tesla will have (a short term?) upper hand with their battery gigafactory. The demand/supply numbers for EVs suggests the company that commercializes a new >2X battery energy density technology will be a really !$BIG$! winner.
  • mulp on September 14 2015 said:
    I'm not sure that oil will have a future in fueling vehicles. In 1900, gasoline sales were virtually non-existent.
  • Bob H on September 15 2015 said:
    Cars are not the only use of petroleum products, but in many cases their use of it has been extravagant and wasteful. There will always be a need for petrochemical products that will keep the industry viable so let's stop polluting the at atmosphere by needlessly burning oil products. I cheer on BMW.
  • tyler on January 14 2016 said:
    Yes range is an issue, so if BMW has any sense, they will make an optional battery charging engine (like the Volt). Its a smart idea as a backup, and never directly powers the drive-train, only charges batteries if necessary. Its amazing to me that until battery technology catches up with long distance driving requirements, that more EVs have not been outfitted with these small charger engines.

    Assuming BMW will be converting "all" of their vehicles to electric, so the hope being that aesthetically pleasing electric vehicles will soon exist. I feel that a HUGE reason EVs don't sell is because they are ALL FUGLY or way too expensive! I don't think it was just a conspiracy in the recent past that vehicle manufacturers only design ugly EVs so that people don't buy them, so they can meet their legislative EV requirements, but ensure driver's continue rely on fossil fuels. "See; people aren't buying EV's"! Yes, maybe try making an attractive one for an affordable price, crazy thought. Instead of a $100k nice looking one, or an affordable $30k ugly one.

    My 2 cents.

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