BMW Says “We’re In The Midst Of An Electric Assault” From Tesla

1 week ago by Eric Loveday 46

BMW i3

BMW fears Tesla and its CEO Elon Musk.

So much so that the automaker is now hosting meetings that are razor-focused on Tesla, according to Bloomberg.

Tesla CEO Elon Musk (Image Credit; flickr via Brad Holt)

Bloomberg states:

“Inside a bright auditorium at an abandoned airfield near Munich, rows of men and women gaze at images flashing by on a giant screen: a Mercedes sedan; Porsche and Jaguar SUVs; the face of Elon Musk. “We’re in the midst of an electric assault,” the presenter intones as the Tesla Inc. chief’s photo pops up. “This must be taken very seriously.”

The audience is BMW employees. The focus is electric vehicles. The main rivals include Tesla and Mercedes-benz.

Bloomberg adds:

“The takeaway: The market is shifting in ways that were unimaginable just a few years ago, and BMW must adapt. The subtext is a recognition that the company has gone from leader to laggard. For years, it set the benchmark in luxury, but it needs to hit the accelerator to fend off resurgent rivals such as Mercedes-Benz and new competitors like Tesla. “BMW is falling behind in electrics,” says Ingo Speich, a fund manager at Union Investment, which owns almost 1 percent of the company.”

It’s hard to say that BMW is behind in the plug-in vehicle space. The automaker has numerous plug-in hybrids on the market, but just one pure electric vehicle. Perhaps that’s why the focus is on Tesla?

BMW CEO Harald Krueger is behind this fear of Tesla approach. BMW itself has seen revenue and profits soar in recent years, so financial concerns are not what’s pushing the shift to electric cars. It’s more or less driven by BMW’s desire to always lead the way, which it doesn’t do in the electric vehicle segment.

Jürgen Pieper, an analyst at Bankhaus Metzler in Frankfurt, stated:

 

 “BMW has lost its leadership in innovation. It’s not brave enough to get into pioneering projects and do something really new.”

 

Unfortunately, BMW doesn’t seem to have concrete plans for a next pure electric vehicle until 2019 or later. Maybe as late as 2021, in fact.

Source: Bloomberg

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50 responses to "BMW Says “We’re In The Midst Of An Electric Assault” From Tesla"

  1. John says:

    Hah! Maybe if car manufacturers could somehow get past their obsessive love of ICE then maybe they’d figure it out. Apparently they still can’t..

  2. leafowner says:

    BMW should be worried…..Everyone who I know who buys higher end cars would rather have a Tesla vs. a BMW.

    Tesla is becoming the prestige brand!

    1. SparkEV says:

      Becoming? Tesla is already a prestigious brand. If I’m willing to spend $35K-$45K on a car, there’s only one brand, and that’s Tesla. Heck, even if I’m willing to spend $1M, it’d be Tesla, and use the remaining $850K on sex, drugs, rock and roll. 🙂

      By the way, is it just me, or does it seem tacky to see celebrities in “luxury” gas cars instead of Tesla? It used to be that Ferrari and Porsche meant status, now they seem like too much bling and no substance.

      1. Rich says:

        “If I’m willing to spend $35K-$45K on a car, there’s only one brand, and that’s Tesla.”

        This!

      2. leafowner says:

        Spark — the old “Prestige Brand” was BMW — what I was saying is Tesla is Becoming “That” Prestige Brand. Until they have a complete offering, BMW is still on top — but my bet is soon after the Model 3 and Model Y releases — BMW will become an afterthought….

      3. Martin Winlow says:

        It’s you.

    2. Joel says:

      Not me thank you. I will not give up my BMW diesel until I can go 1000 km, then fuel in 5 min and go another 1000 km. Electrics have a long way to go. We live in northern bc Canada, and have no recharge stations. As well the 150 km range of a Tesla in -30 weather just will not cut it.

      1. Ziv says:

        LOL! Go for it, Joel!
        But the vast majority of people aren’t going to be too worried about range and recharge speed for the BEV’s that are being built today. By 2020 even the curmudgeon class will realize that the positives of BEV’s outweigh the mild negatives.

  3. georgeS says:

    Meh,
    BMW is about as serious as GM and the rest of the big 3. Their moves seem to be timed with the regs. Not one bit faster. Just play the game and milk the ICE market for as long as you can.

    1. Priusmaniac says:

      Right on, and that is also why they only propose a BEV in a segment they were totally abscent from, the micro car with half suicide doors. That way they make sure that no BEV they produce would cannibalize their dear combustion engines sedans.

  4. Paul K says:

    The Tesla revolution in the auto industry seems to be following the Gandhi outlines: First they ignore you. Then they ridicule you. Then they attack you. (which starting now). And then you win. (to be seen).

    1. ffbj says:

      If you just simply compare stock values Tesla is winning already, though that is based upon a supposed future.
      I think it’s clear that Tesla has won in the spaces in which it competes.

    2. Pushmi-Pullyu says:

      Well said, Paul K!

      I think you hit the nail precisely on the head.

  5. Toni says:

    “The market is shifting in ways that were unimaginable just a few years ago” – Yeah, right, “unimaginable” 😀 It is your own fault if you believe your bulls***, Hans.

    1. mike says:

      Spot on – I remember their CEO calling Model X a prototype .

  6. Longvsshort says:

    A legacy premium car brand in a global, increasingly middle-class and image-conscious world population. They’ve sure been riding a tide, but see one threat on the horizon: an over-ambititios, young revolutionary out of California.

  7. Eco says:

    Traditional ICE vehicle manufacturers will never catch up to Tesla let alone lead. By the time they make a BEV that competes, Tesla will have innovated once again i.e. it’s a moving target that only futurists like Bill Gates, Steve Jobs, and now Elon Musk understand. I could be wrong but I don’t see any futurists at traditional ICE manufacturers.

    1. Allan says:

      I agree. Revolutionary companies become that way through a messianic vision, absolute devotion to execution and driving ahead while others attempt to follow.

    2. Priusmaniac says:

      Perhaps, but they could still at least make the genuine effort of making a true BEV sedan especially since I don’t think there will be much evolution left beyond a BEV sedan. Or then like Elon said of what will be beyond reusable rockets, warp drive, we can say that beyond BEV cars there will be teleportation.

  8. Someone out there says:

    Yes, good morning mr Krueger. Electrics are coming really fast so you better get a move on to secure access to batteries.

  9. Rich says:

    I’m not convinced BMW has a roadmap to achieve competitive offerings by 2020, let alone lead anything.

    BMW 3 series is in for a rough ride in 2018 & 2019. Anyone have forecast analysis on losses due to Model 3?

    One of the arguments against transitioning to BEV is lower profit margin BEVs will cannibalize sales from the high profit margin ICE products. BMW should take this “cannibalization” analysis and weigh it against their projected losses from BEV competitors like Tesla.

    At some point, BMW will face the decision to make less money and keep the customers vs. make no money due to a lost customer. BMW needs a CEO with courage to make the unpopular decisions that will strengthen the company long term. This CEO sounds like he’s laying the “excuse” foundation so he can tell the board he’s been calling for action and his underlings wouldn’t support him. LOL, this isn’t going to save him.

    Side note: If Tesla’s quality and service model can maintain high customer satisfaction, it’s unlikely BMW will (ever) get those lost customers back.

    Moving forward. IMO, BMW should focus on the next devastating wave coming at them … the Model Y. They’re insane if they’re not bringing a BEV X3 to market with 300 EPA rated miles and a $45K average price. BMW should bring it to market in MY 2018 and in large numbers. If BMW waits till 2020, they’re going to get crushed.

    1. Sch says:

      It depends what have the researchers at BMW been doing since the launch of i3. If all they have done were the PHEV versions of existing models it is bad, but I would bet they secretly and slowly were working on the i5.
      It’s not about having the expertise but having the will with all the money on research BMW and other big car makers have, they still can catch Tesla if they would want to.
      VW has put aside 18 billion euro for the dieselgate and it still made profit last year.

    2. pjwood1 says:

      “One of the arguments against transitioning to BEV is lower profit margin BEVs will cannibalize sales from the high profit margin ICE products. BMW should take this “cannibalization” analysis..”

      I think the top management team of every maker has a version of this in a Power Point slide. Where I disagree is in anybody having great technical advantage. Production advantage, yes, but this has mostly been about what companies have the “will” to do.

      Losing brand image is hard to put a price on. That may be happening around here, and maybe we see right through things, but profits aren’t in raising production costs when you believe only a couple of whole-percentage points, of share, will be going away.

      1. Rich says:

        “but profits aren’t in raising production costs when you believe only a couple of whole-percentage points, of share”
        If the projected losses are in the 1% to 2% range, then it makes sense why BMW is on their current course. I’ll be shocked if the 3 series doesn’t take at Least a 10% hit in 2018 & 2019. It’s going to be fun watching all the 200+ miles range BEVs come to market over the next 2 years.

    3. JakeY says:

      “One of the arguments against transitioning to BEV is lower profit margin BEVs will cannibalize sales from the high profit margin ICE products. BMW should take this “cannibalization” analysis and weigh it against their projected losses from BEV competitors like Tesla.”

      This a good point. I’m sure a lot of marketing managers point to the cannibalization problem, but then they neglected that competitors like Tesla will do even worse damage for them via conquest sales.

      I guess a few years ago there was still doubt that Tesla can reach the Model 3 stage. Now that Model 3 is about to be released, I’m sure there’s a lot of BMW executives sweating. 400k reservations is no joke and the target is aimed right at the high volume 3 series.

      If Tesla can get some of the buyers that have bought BMWs for most of their lives to switch to Tesla (Model S/X is already starting to do that at lower volume) this can be a big hit for BMW.

    4. AlphaEdge says:

      [If BMW waits till 2020, they’re going to get crushed.]

      I hope so! I hope Tesla decimates the entire German auto industry, but unfortunately they will change and adapt.

  10. SparkEV says:

    Assault is also coming from GM. BMW has to get its act together soon, or it’ll be shut out of EV market. At far higher price than Bolt or Tesla 3, it won’t be easy.

    1. evnow says:

      GM doesn’t assault. It just teases.

  11. Roy_H says:

    BMW and M-B are the ICE companies that are taking the Tesla threat most seriously. Tesla has consistently compared themselves with BMW and targeted their customers. M-B has probably been hurt more by Tesla than any other company in terms of loss of customers. Don’t underestimate them, they will fight back hard.

    1. Rich says:

      Keep in mind that Big Oil own controlling interest of Daimler and VW group. This creates a serious conflict of interest in transitioning to EVs.

      The UAE owns largest share of Daimler (Mercedes Benz)
      http://www.cbsnews.com/news/abu-dhabi-becomes-biggest-daimler-shareholder/

      Qatar owns largest share of Volkswagen (VW, Audi, Porsche)
      http://www.reuters.com/article/volkswagen-shareholders-idUSL5N11T3ID20150923#kZ7cXDxx2QW7lsVt.97

      1. Priusmaniac says:

        This is why those companies will rather go on selling ICE cars instead of BEV cars. In fact they would even go as far as to sell ICE cars for a 1 $ per unit symbolic price if that’s what it takes to make sure Big Oil can continue to sell gasoline and diesel at the pumps.

  12. Robert Malcolm Kay says:

    If I won the lottery, would I buy a Jaguar, a Daimler, a Porsche, or a BMW?
    No way! I’d buy a Tesla.
    In the interim, I’ll be happy with my Nissan Leaf.
    Screw ICE: the days of dinofuel are gone.

  13. menorman says:

    Aren’t they also still putting a couple billion into ICE research over the next few years? They’d be wise to completely ax those programs and devote even just half of that amount to BEV research and development. That is the only way for them to survive into the future.

    1. Pushmi-Pullyu says:

      Hmmm, I’m not so sure that would be wise. There will still be demand for gasmobiles for some years, altho hopefully that demand will dwindle ever more rapidly over time. I expect there will still be enough demand for some models to be produced for 20 years or so, unless governments move to put strong regulations in place to prohibit sales.

      With only about 2% of the market now going to plug-in EVs, it seems unwise for BMW to go “cold turkey” on gasmobile R&D. Certainly R&D money should be weighted toward where the market is going — which is to plug-in EVs — but ending R&D entirely when there is likely to be another human generation or so of gasmobile sales, seems imprudent.

      We EV advocates like to compare the fate of legacy auto makers refusing to embrace the EV revolution to Kodak’s refusal to embrace digital camera tech during that tech revolution, but there is an important difference: Electronic tech revolutions move at the speed of Moore’s Law. The EV revolution moves at the much slower pace of improvements in battery tech. Moore’s Law has computer processing power doubling roughly every two years. By contrast, the energy density of batteries doubled in 10 years in the transition from NiCad to NiMH to li-ion. It may be that the pace will accelerate a little, with increasing resources devoted to improving batteries, but there is no rational reason to ever think improvements in battery tech will proceed at the pace of Moore’s Law.

      Bottom line: Legacy auto makers will probably have considerably longer to transition to the new tech than did the market leaders in recent consumer electronics tech revolutions, such as the smart phone revolution and the digital camera revolution.

      1. Priusmaniac says:

        It will take longer, that’s correct, but let’s also remember that Kodak had digital cameras on the market, so they were not really out of the digital camera market. What really ended Kodak was not the advent of digital cameras it was the fact that being late gave them an image of being laggards. So even though there digital cameras were quite good, people saw the brand as backwards and who wants to buy a product from a backwards looking company.
        Like wise, BMW must not be afraid of being late to propose BEV sedan on the market, but BMW must be afraid of getting a backwards car brand image compared to new brands like Tesla. Brand image is where the danger reside.

  14. MattUK says:

    Times have changed. Nowadays you see an Audi RS, BMW M5 or AMG on the road, you really don’t bother with a second glance simply because a Tesla P100D obliterates them hands down in real day to day performance.

    1. Volt says:

      Pretty much any Tesla will smoke them. Even a 85.

      But ya cars like those do nothing looks wise

  15. Devin Serpa says:

    I’d rather have an EV that is made by a company that only makes EVs.

  16. RKumar says:

    BMW, your problem is not just with making electric vehicles to compete with Tesla. Also make reliable vehicles. I currently own a 7 year old 328i. The kind of issues I had to fix on this car is unbelievable. Every time, there is an issue, it ends up with a $1000 repair bill. I really have a love/hate relationship with this car. $1200 for battery and alternator. $2300 for a replacement of valve cover which totally crumbled on a n 8 year old car. Yes, I made a reservation for Model 3. And I am seriously considering a Model S instead, even if it’s little over my budget. I am just tired of BMW.

    1. BenG says:

      This repair expense problem is why I would never consider owning a BMW.

      Though, to be fair, I also worry about that for Tesla, and for that matter I worry about my Volt. There’s just not a long track record to judge what my expenses might be like the next 5 years.

  17. Robert says:

    We are watching the space!

  18. trackdaze says:

    About 8000 bmw 3 series get sold each month about 300 of those are plug a pifling 7kwh plugins.

    Not so serious then.

  19. Apkungen says:

    So much talk, so much crap. Take the BMW 3-series, remove, engine, exhaust, gearbox and add an electric motor, batteries and fast charging. It should really not be impossible to add 60kWh 200hp and 150kW fast charging for around 10kusd more than the cheepest ice version abd after tax rebate the car should sell like crazy! Just do it!

  20. Doggydogworld says:

    This article massively misrepresents the meeting, which was perhaps 30% about electric cars and less than 10% about Tesla.

  21. JAC says:

    We see that Tesla,Inc. is leading the way in safe electric car clean energy technology in the world. Be proud of the change, don’t kill the EV again. We deserve clean air and much more.

  22. ModernMarvelFan says:

    Well, BMW’s biggest volume is from 3-series and Tesla Model 3 is aimed squarely at 3-series.

    So, BMW should be worried.

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