2014 BMW i3 and Electric Cars
Sales are still small
Date Posted: June 13, 2014
By Zack Spencer
Electric car sales have been slow to catch on. BMW hopes its new compact electric car is the right combination for todays's buyers
I recently had a chance to fly to Toronto to drive the all-new all-electric BMW i3. This got me thinking about the electric car market as a whole and where we stand today. It could be argued that this article will be obsolete in a month or so as more and more automakers are adding electrification to existing models, or all new models, at an alarming rate. The market for electric cars or plug-in hybrids is very small but the market is slowly growing. The success of Tesla’s Model S has shot its stock price into the stratosphere, as investors bet on that company’s emergence as the electric car and technology leader. The stock price should not be based on the actual number of cars sold, as they can only make about 20-25,000 cars annually for a worldwide market. If you live in a trendy part of Vancouver, you might be excused for thinking the Tesla is the king of electrics… but it isn’t.
Green Car Report recently published a sales report on all electrics sold in Canada for the first six months of the year. The list of vehicles sold is compiled from companies self-reporting but Ford’s data is missing from its report. This Green Car Report estimates that Ford’s numbers will push overall electric sales to 2200 for the first half of the year, a 50 percent improvement over a year ago. What we do get is a good snapshot of the market. With only 1941 electrics officially counted, amounts to only 0.21% of the overall Canadian marketplace. (Canadians are on track to buy almost 1.7 million vehicles this year) So these are tiny but important numbers and the trend is higher. The clear winner isn’t the Tesla at all; in fact it is in third place behind the Chevy Volt and Nissan LEAF. Chevy sold 831 Volts up to July with Nissan selling 462 LEAF’s and Tesla moving 290 Models S’. The Smart Full Electric Drive comes in forth with 163 cars sold and in its first month of sales (June) the BMW i3 looks good with 50 units sold.
Not all electric cars are the same
What many people don’t realize is the complexity of the electric car market. I look at it this way, if the car can be plugged into an outlet; it is at least partially electrified. There are pure electric cars like the Nissan LEAF, Tesla Model S, Smart Electric, Mitsubishi i-MiEV and BMW’s new i3--all of these use just electricity to propel the car. Then there are electric cars that have an onboard generator, should the range of the electric pack limit driver’s intentions. The Chevy Volt, Cadillac ELR, the Toyota Prius Plug-In and the BMW i3 are, or can be equipped, with a gasoline engine to either drive the wheels or charge the battery. This is one area where the Chevy Volt wins. With roughly a 65km range on pure electricity and a small generator on board to extend the range indefinitely, this car makes a lot of sense. This is why the BMW i3 has an optional generator for $3000 to extend the range of that model. But if the buyer chooses this option, the range of pure electric drive is limited because of the added weight of the car. Basically, electric car buyers need to know if they can live with the limits of the electric cars range or want the flexibility to extend the range with an on-board generator.
What is still to come?
We are living in interesting times. More and more electric cars are being added, not to meet the demand but to meet regulatory requirements. For the model year 2016, the United States has a new cooperate average fuel economy (CAFE) standard that has each manufacturer trying to hit 35.5mpg average across their fleet, including small trucks. This isn’t doable with the current internal combustion engine technology, so these manufacturers are looking to electrification as the answer. Even though more and more electric versions will arrive, don’t expect them to sell. In fact, most car companies don’t expect them to sell at all; they just want the mpg credit towards the new regulations. This might sound cynical but watch how many electric cars will arrive, especially for the 2016 model year, and how many you will actually see on the road. Most are built at a loss, to offset thirstier, gas-loving machines.
Even though electric car sales are very small and many new models will go unnoticed, the trend to electrification is here. With markets like China mandating a percentage of electric cars to offset its horrific pollution, will help move the numbers of electric vehicles worldwide. This, along with steady adoption rates here in North America will help promote better charging infrastructure. Another factor is the price to own an electric car. The Smart Electric is priced at $27,000 making it the least expensive full electric car. With Nissan hacking its price on the LEAF to just over $31,000 and the Volt starting at roughly $35,000, these cars are more affordable than ever. I think the BMW i3 is very attractive for $45,000 because it is a luxury brand at an attainable price. The real show stopper will be the Tesla Model III that they hope to sell for US$35,000 with over 400km of electric range when it is introduced in 2017. Even though Tesla has the sex appeal going right now, don’t count out the other mainstream manufacturers with decades, if not centuries of auto making knowhow, to take on the challenge.
Even though electric car sales are very small and many new models will go unnoticed, the trend to electrification is here.