BMW Head Of Sales & Marketing: Cheap Gas May Kill Electric Car Sales (w/video)

JAN 20 2015 BY ERIC LOVEDAY 80

BMW i3

BMW i3

BMW’s head of sales and marketing, Ian Robertson, stated yesterday at the DLD-15 conference in Munich, Germany that cheap gas will likely make electric cars even harder to sell.

We know that gas prices don’t impact sales of pure electric cars and  that there’s only a slight connection between gas prices and PHEV sales, but perhaps Robertson isn’t privy to this factual information.

Robertson stated:

“There are some short-term changes that will occur in some countries.  There would be some moves toward some bigger-engine vehicles.”

Robertson believes that cheap gas prices could even impact the automaker’s plug-in electric car sales in the U.S., but again, he must not have done his homework.

Robertson claims that this predicted dip in sales will not change BMW’s future strategies:

“The legislative framework in the U.S. and Europe, China and Japan is clear, and it’s not going to change.  The advent of zero-emission cars is coming, so our strategy remains on that track.”

Why is Robertson convinced that sales of plug-in electric cars will decline due to low gas prices?  Well, as we see it, BMW sells 2 plug-in hybrids (BMW i8 and BMW i3 REx) and one BEV (BMW i3).  PHEV sales do dip slightly when gas prices drop.  BEV sales do not.  Therefore, Robertson could be assuming that the automaker’s combined plug-in electric car sales will decline slightly due to cheap gas.  That’s a reasonable assumption, but please don’t wrongly assume that electric car sales are negatively impacted by declining gas prices.  That’s simply not true.

Keynote video below:

Source: Automotive News

Categories: BMW

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80 Comments on "BMW Head Of Sales & Marketing: Cheap Gas May Kill Electric Car Sales (w/video)"

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Here’s the huge problem: Automakers keep marketing electric cars as fuel savers.

They need to realize it goes beyond that. The silent and instant torque, constant acceleration, no shifting gears, and no inconvenience of going to the gas station, are all great reasons to own one, besides “saving money at the pump”

When are the marketing departments going to wake up?

Yes, they need to just market them as “better” cars.

The stone age didn’t end because we ran out of stones.

+1, like the analogy

Big Solar

Nice one!

Ontario Leaf

Night. Gas station. Winds howling, snow drifting, -15 C. A man (has to be a man, this, coming from a man) fuels up his gas guzzler shivering while inhaling fumes and fumbling with the credit card.
Meanwhile, the BEV silently passes the gas station. A good looking woman drives it into the garage, steps off and plugs in.
The next morning the car is fueled up and heated up.
Priceless.

Jonathan

Except at those type of cold temps, the EV driver’s battery is gonna be draining at a ridiculous rate.

mhpr262

I typically get around 50mpg, or around 600km per tank out of my car with long-distance driving.

I had to use it for short distance commuting one not particularly cold winter in Germany (about 5km one way) and mileage was so bad that I only got around 7-8mpg or 100km to the tank. That is worse than any electric car.

Gsned57

As long as the new federal fuel standards stay in place automakers will need to internally raise the price on gas hogs to “subsidize” evs. They’ll have to find that perfect balance to arrive at a fleet wide avg that meets the gov standards.

Mint

CAFE standards will be met with minimal
EV/PHEV penetration.

The standards are adjusted for vehicle footprint, and they use the EPA’s 2-cycle test as opposed to the 5-cycle one. That 54-mpg figure is more like 35-mpg.

V Bowman

I’m continually amazed at just how short-sited large businesses can be…both in the U.S. and abroad! At times they appear more fickle than a politician with an opposing lobbyist in each pocket.

Lustuccc

Look at that! A gas car maker who explain why they will not sell more EVs.

Another pretext for not trying to sell electrics.
As everyone knows(!) ICE car makers are always looking for a reason to explain why their BEV sales sucks.
Aside from the artificial high cost of batteries, this is another pretext to sit on their ICE car lucrative business..

mustang_sallad

While I really hope you’re right, i think it’s way too soon to say “low gas prices don’t impact EV sales” with such confidence. Sure you can say that “so far, low gas prices have had no impact on EV sales”, but it isn’t reasonable to extrapolate this and state that there won’t be a correlation between gas prices and EV sales in the long run. How could there not be a correlation?? Look at the PEV driver survey that was conducted in California, the number one reason to buy a PEV was the economics.

Lustuccc

Stop polluting and cool the climat maybe?

mustang_sallad

That’s exactly why i mentioned this survey – I thought it stated that economics were more important than the environment, but now that I’ve looked up the survey to link to it, i see that I wasn’t remembering it very clearly! The environment is indeed the most important factor for Leaf owners, and economics more so for Volt drivers, which matches what we’ve seen in recent trends.
http://energycenter.org/sites/default/files/docs/nav/transportation/cvrp/survey-results/California_PEV_Owner_Survey_3.pdf

That said, the existing Leaf owners covered by this survey are early adopters, and I would argue that the economics are much more important for the more mainstream customers that we hope will move toward plug-in vehicles. What EV driver hasn’t talked about the economics when explaining to friends and family what it’s like to own and drive an EV?

Either way, I still think it’s way too early to assert so unequivocally that gas prices do not impact EV sales.

Murrysville EV

I didn’t buy a Leaf to save the environment from the myth of global warming.

LuStuccc

SMOG

Mikael

I can assure you that 100% of scientists in any real scientific field can guarantee you that global warming exists.

And if you don’t believe them then just go out at night and feel for yourself 😉

Bill Howland
HORRORS! You don’t mean that dangerous “POLUTANT” Carbon Dioxide!!!! (sounds like carbon monoxide). You don’t actually mean a little co2 is actually good for you do you? I mean CO2 has to be the main problem facing MANKIND! Who cares if there is Plutonium floating around in the Northern Pacific which all the living things are Bio-Accumulating to the point where there used to be thousands of species on the coast of Vancouver and now there are, what? TWO?, or that there has been a baby ORCA whale born that has lived more than 7 months in the past 3 1/2 years, or that the adult Orcas have stopped Singing, and look emaciated. Or that some people in the Seatle, Washington area were complaining about a metalic taste in their mouths a few days after 3/11/2011. That can’t be a problem since “Science” has stated this is a “strange virus” (which they don’t identify), and who cares that all the sea life in general has tumors and deformations all over the place on it. We also have to worry about this great huge temperature increase that only the white house and Nasa have stated, while independent scientists say differently, but… Read more »
Scott

I think it’s just a matter of time. How long that is, depends on how much resistance people/companies like this provide and how much acceleration occurs from others like Musk. Ultimately, I think BEV’s are and will be much simpler to manufacture, own, maintain, etc. and the price of fuel won’t even have to enter into the equation.

Jim_NJ

“We know that gas prices don’t impact sales of pure electric cars and that there’s only a slight connection between gas prices and PHEV sales, but perhaps Robertson isn’t privy to this factual information.”

With all due respect, you don’t know that. Average gas prices have been above $3/gallon since the introduction of EV/PHEV’s in 2010. At best, you can say that prices above $3/gallon don’t impact sales of pure electric cars. We have no meaningful data yet for prices under $3/gallon. It’s possible that there is a ‘tipping point’ where gas prices do have an impact. And perhaps that is $2.50/gallon, or $2.20, for which we really have no data.

Well, we do have the plug-in sales data for Nov & December of 2014. January 2015 will be more data in a couple weeks.

Spec9

I love the hilarious the 2nd paragraph but it is premature to assume the trend will continue. That said, I think assuming gas prices will remain low is a much worse assumption.

M Hovis

This race is a marathon, not a sprint. EVs, for now, are still a small sector. It is refreshing that EV sales have held during 30% drop in conventional fuel pricing, however HEV sales have suffered while SUV sales have soared. We all want this to be solved quickly, but it wont be. There are enough improvements and 2nd gens coming to keep EVs steady four 2015-16. Low gas prices wont sustain past then. 2017-18 should be big years for EVs with substantial numbers. Honestly, I would be surprised if 30% drop in gas prices did not effect EV sales some. Killing EVs sales? Not happening. This train has left the station.

pjwood

A silent killer, in all of this, is rising electric rates. In New England, rates are up 20-35% this winter, on poor natural gas supplies. That will end, in March. Even at our rates, electric is still cheaper. For the rest of the country, gas (@30mpg) would have to be $1.20 to beat the national average $.12/kwh rate. That’s at the 3mi/kwh most PHEVs accomplish, and doesn’t include the comedy of parts in your standard ICE vehicle.

Spec9

That is largely a local New England problem caused by a rapid move to NG for heating and electricity without a concurrent move to more NG pipelines. I hope those prices cause more people to invest in wind and solar PV. And they should build the damn Cape Wind project.

Phatcat73

They’re starting to sound like Lexus

Chris

Time to “stimulate” the sales BMW with better prices and discounts 😉

Mikael

And new models of different kinds, preferable BEVs, BEVxs or EREVs.

Spec9

Yes. More variety and longer range pure EVs are what is needed.

Lustuccc

“The advent of zero-emission cars is coming, so our strategy remains on that track.”

So you start a “*fast*” network of only 25 amps for the future? BS!

So you produce an ugly, overpriced, ill adapted hybrid and brag about it in the media as the most important car since the Model T ?
What a fine and bold strategy!

If your “strategy remains on that track”, you will produce a good affordable EV in 20 years.

pjwood

VA=W If 480V=50kw, amps are more like 100. Maybe I’m far off?

A pivot could already have happened on the dime of CCS goals, because of gas prices.

LuStuccc

Sorry it was kW. 24 kW actually.

Just enough to recharge 80% of an i3 in 30 minutes.
Nothing for the all the upcoming cars with more range. This network will rapidly become slow charging.

mustang_sallad

Unfair to rip on BMW’s efforts so far – their EVs are more successful than the vast majority of other manufacturers, and thats after less than a year of sales. And I would argue they’re playing a similar role to Tesla in terms of getting the general public to recognize that EVs are a thing.

LuStuccc

I would say less unsuccessful than others… But again, all ICE car makers make small productions of overpriced weak EVs only to comply to the law and make believe to the public they’re doing their best.
Nothing in their marketing will make me forget that GM, Toyota and Nissan produced +120 miles BEVs 15 years ago. And two of them ordinary adapted models.

ffbj

Ouchie!

BraveLilToaster

I guess it’s a good thing we have Tesla around to soundly kick their asses in the marketplace then, since they’re doing right all the things that every other manufacturer is doing wrong.

Aaron

Wow. Another executive who can’t see past tomorrow. Do people actually think low gas prices will last forever?

Zim

Perhaps they are jaded by the fact that Malthusian environmentalist doomsdayers have predicted “peak oil” for the past 60 years and failed every time.

LuStuccc

It is big oil that predicted peak oil, only to keep prices high.

pjwood

I beg to differ.

The “Peak Oil” guys are more like the Gold Bugs, than the environmentalists. And the Malthusians say “we’re running out”, not that “we’re destroying what we don’t have to”.

Aaron

@Zim: You are correct. It’s difficult to tell when the sky is falling after hearing it so many times.

+1

pjwood

Both GM’s Mahoney and Reuss had a shot at the “What about gas prices?” question, and each gave an answer laced with “sustainability” and a judgement they think consumer minds are changing.

Robertson who could be treated as Mahoney’s equivalent, said, “the advent of zero emissions cars is coming, so our strategy remains on track”. He’s not in a position of loose lips. So, reading into it means BMW may be aiming at U.S. regs.

I think Automobile magazine published a take-down of regs, saying Germans were worse off because their fleet average CAFE targets were ~43, for the U.S. makers ~38. Though they didn’t say it, that’s because the weighting of truck sales for the US OEMs is so much higher (ever heard of the household with the foreign SUV, and American cars?). Then, there’s the MPGe standard, as a defacto metric supporting CAFE, and what that spelled for diesel/VW.

In the auto segment, as CAFE defines it, I don’t know that BMW is any worse off than GM. Anyone? If so, could that be a reason Anderson might take a pot shot? Am I Captain Obvious?

James

Not to split hairs, but the i3 REx really is a BEV with a range extender. How do I know? I could remove the gas tank and the car would still run, the same isn’t true of the battery. My wife has just had a 24hr test drive covering around 100 miles total, she’s not even got close to the range extender kicking in! In fact I doubt she’s actually got the battery below 50% SOC in that time. BMW just put a REx in the car to double the range without having the cost associated with that quantity of batteries, you almost never need it however.

Mikael

Which makes it one of the smartest car that has ever existed.
More models like that please.

JakeY

That perfectly describes a series hybrid design (engine can always be removed, battery not). The Fisker Karma is another example.

James

There is one further difference though, the i3 actually has enough range to drive on electricity from the battery for a whole day (at least 95% of the time). With both the Volt and the Fisker you’d use some small amount of fuel on 1 out of 2 days, if not more often than that! In other words, without the range extender the i3 REx is still a car that would be produced and sold, the same can’t be said for the Volt and Karma, with those cars you have to have a gas engine or the vehicle would be a complete joke that would never see the light of day.

I go months w/out burning any gas in my Volt. Average US daily driving is 40 miles or less. The Gen1 Volt has this range. The Gen2 Volt will have 50 miles. Many drivers get well over the EPA range.

Spec9

The $4K premium for the Rex could have paid for more batteries that make it go as far as a tank of rex goes.

James

Yep that would have been better, but I don’t think that the battery chemistry’s with adequate energy denisty were ready in time. At least that’s my guess.

However you lose the “supercharging” ability of just filling with gas when you need to.

Lustuccc

Aside from a BEV, a series hybrid is the best way to go. But not like the poor engineered REx on the i3.

Unfortunately there is no other series hybrid on the market today.

The Volt is a series hybrid except in rare cases.

Lustuccc

Technically it is a parallel hybrid with software driven series capabilities.
Not a much efficient as it should be if it was (well) designed from the ground up to be a series hybrid.

No, a parallel hybrid has the gas engine assisting the drive train directly at all times. This only happens in rare instances on the Volt. Also, a series hybrid would not be as efficient in these instances because you would have a dual power conversion. Engineering = efficiency.

LuStuccc

No, a parallel hybrid has the engine connected to the wheels, like the Volt.
The computer determine when one, or the other or both motors are needed… I can see it on the display of my Prius.
GM mislead everybody with their marketing. It ACTS often as a series hybrid, but it is not.
In a real series hybrid the engine is in no way connected to the propulsion/traction and act solely as a generator to replenish the batteries. Like the optionnal REx of the i3 or the defunct Karma.

Again, there are only rare cases where the engine is coupled to the wheels, not all the time. The battery in your Prius only assists the gas engine.

You drive a gasser? After all your EV rhetoric?

LuStuccc

I’ll be the first in line for Model 3 !

And again no, the electric motor is on very often it is just only an assistant … Nonetheless the Volt is a good parallel hybrid 😉
And what do you make of other plugin hybrids? They go many miles on theis AER. This is no parallel behavior.

Anyway you drive a gasser as well since it has a tailpipe!
Yes I know, you don’t tank often, Volt owners always say that..

GM could have done a much better job with the 2.0 . Less ICE and more EV power is supposed to be the goal…

LuStuccc

OUps! “It is NOT just an assistant”…

“Less ICE and more EV power is supposed to be the goal
———-
The goal is more EV miles. It’s already been shown that Volts put on more EV miles than the pure BEV leaf. The Gen2 will only increase on these values. The other goal is to get more people in plug-ins. Cars that are no compromise and be someone’s only car are what are required. The Leaf or i3 wouldn’t work for me, but the Volt does. A 200 mile BEV may do it.. but again, that doesn’t apply to everyone.

I’ll look for the video where Andrew Farah explains that the Volt is a series-hybrid. He’s the chief engineer, he should know. This is an old argument that really isn’t worth the time though. Most ppl on this site understand the difference between an EREV and a parallel hybrid.

Lustuccc
If the goal is to have the most EV miles, they just have to do the EV2. Pure electrics with good range are the only way to go. Tesla knows this. Actually the Volt is a mix of different modes of operation, but basically it is a parallel hybrid. Like all other Plug-in hybrids. It only has more AER than the others. What about the guys at Edmunds? They are not tied to GM and their marketing dept. “Mode 4: High-speed series-parallel hybrid mode up to top speed. This is classic gasoline-powered series-parallel operation. You can’t have both electric motors driving the car at high speed like we saw in Mode 2 because the battery is discharged, meaning that the second motor-generator must continue to be a generator driven by the engine. This is where the engine begins to directly drive the ring gear. The engine is already clutched to the second motor-generator, so a straight-through mechanical connection is established when the ring’s motor-generator clutch is engaged.” Here you can see clearly the architecture tied to the planetary gear and the wheels. https://www.youtube.com/watch?v=AX5ZwzNwTc4 EREV is not the proper term to describe it from a technical point of view, It is… Read more »

As I said before; a BEV is not going to work for everyone, so unless you want those people to drive gassers, EREV is they way to go. They will end up putting on more EV miles than 80 mile BEV’s since there’s no range anxiety.

As far as the drive train debate.. this is over 4 years old, and here’s a 4 year old audio clip of Andre Farah explaining it, because as usual, the car magazine guys get it wrong, and the engineers have to set them straight.

http://www.plugincars.com/exclusive-chevrolet-volt-chief-engineer-explains-volt-drivetrain-says-volt-electric-vehicle-90758.ht

Lustuccc

Notice that the last link above is from GM.
🙂

Not GM. It’s plugincars.

Lustuccc

It would not have this professional design and the Chevrolet logo if it were not authorized/ordered by GM.

I have no idea what you are talking about at this point.

pjwood
BraveLilToaster

Only if EVs cost more than ICEs. I believe that there will be a day in the not-too-distant-future where that’s a distinct possibility, and the benefits of driving an EV will be tremendously more obvious to the buying public.

FFY

“We know that gas prices don’t impact sales of pure electric cars”

This has to be one of the silliest claims I have seen on this web site yet. You can’t extrapolate from a tiny early adopter market that hasn’t seen gas prices under $3 before to the mass market. If gas prices stay low for the long term (which is a very real possibility given potentially vast amounts of new oil coming online via fracking), of course that will make it more difficult to market electric cars. Even Musk said the low oil prices are removing an “economic forcing function” driving adoption of EVs on his recent appearance at the Detroit auto show.

In some areas in the US we are now approaching the point where driving electrically is equally expensive as using gas. In many countries in Europe, electricity is already more expensive than gas. If you think this will have no impact on EV sales, you are dreaming.

“In many countries in Europe, electricity is already more expensive than gas.”
——–
Where?

James

Not in the UK that’s for sure!

> In some areas in the US we are now approaching the point where driving electrically is equally expensive as using gas.

Where? Rates for comparison, please.

Tim E

When comparing the least efficient miles per KW car – Tesla P85 – 320 wh per mile = 4 cents per mile for average grid price of 12 cents per KWh.

Most efficient gas hybrid – the Prius – also is 4 cents per mile while gas is about $2 a gallon.

I will still take my BEV any day over any gas car. $0 per mile using my Solar Power.

I don’t think sales of BEVs will necessarily see a slide downwards – as most of us that drive them highly enjoy them, but the growth of the market may be slower as a result of the lower fuel costs. Bring on the gas taxes/carbon taxes heavily please!!!

Bill Howland

I’ve heard discussions on here where SCE charges 51 cents/kwh at times, and PG&E charges 37 cents/kwh on tier 4.

Then SCE’s demand charges occassionally are $20/kw. So in that area many people have solar panels out of almost necessity.

If I had to drive in SCE territory, during the summer it would be more expensive than gas, and then in the winter time if PG&e, the heater consumption would also make it more expensive than gasoline.

Driverguy01

Ev’s are a superior product and that’s what should sell the cars and that’s the reason companys like Tesla use to sell their cars.

Djoni

Superior for everyday commute, sure.
And even if the economic is constraining, it would do so without adding any smog to city* where this does have an economic impact.

Don’t debate about coal produced electricity here, it’s been done long and large.

J

Pretty sure pricing the new model year $1000 higher than the outgoing model won’t help your sales any either. Especially when the current model year requires pretty heavy incentives to move.

ampzilla

i say it again no practical reason for ev
other than saving money on fuel. im eco minded yet not at the expense of mo money in the pocket $ 2.10 GALLON OF GAS WAS $ 3.90
NOW FIGURE OUT THE SAVINGS REMEMBER COMPARE
PRICE OF AN ICE VEHICLE VS EV VEHICLE
MSRP KIA SOUL ICE VS
MSRP KIA SOUL EV MINUS ANY STATE / FEDERAL TAX INCENTIVES
ICE IS CHEAPER BY A LONG SHOT NO RANGE ANXIETY AND JUST FILL IT UP N GO EV’S ARE IN TROUBLE IF GAS PRICES REMAIN THIS LOW

Just_Chris
Just out of interest am I the only one on the planet who thinks that the current low gas price is a good thing or rather a good sign for EV’s? I have been trying to envision what a transition away from ICE would look like. I just can’t see a future where we gradually bring in a range of new sustainable technologies whilst slowly moving the existing technologies to the side line. With it all done in a controlled and sensible fashion based on scientific fact and a solid consistent strategy. What I think is more likely is people who make petrol will try to keep making petrol as the price of production goes up they will pass the cost on to consumers, the consumers use less, the producers charge more to cover their fixed costs. This continues until someone goes bust, people find alternatives or, as is happening now, a producer tries to retain market share, kill off the high cost competition and stimulate growth in sales by dropping the cost to below break even point. This can only end in tears, if we have 12 months at $50 dollars a barrel the unconventional oil industry will collapse… Read more »
Tim E

I completely agree – the low oil prices will bust unpredictably at some point in time and the prices will jump up radically – this is a ticking bomb waiting to happen with oil prices jumping higher than ever as a result.

Those that can remember yesterday and went out and bought that big truck or SUV without thinking about the fuel costs will be in a world of hurt – and more people will be irritated by the unpredictable costs. It will ultimately end as a win to the EVs, but at a short term reduction in growth and potential cut in the investment of the technology. No matter what – there is no turning back to gas cars for me – it will not happen!