BMW Board Member Talks About Electric Car Cost Nightmare

OCT 7 2018 BY EVANNEX 281

ELECTRIC VEHICLE ‘NIGHTMARE’ IS HAUNTING BMW

Over half a century ago, the auto industry fought against seat belts. Then, in the 1970s, they fought against smog regulations because of expensive catalytic converters. They also opposed other safety standards like airbags. Today, legacy automakers cling to diesel and fight against reducing emissions. The latest target of their displeasure and dismay? Well, it’s obvious — they complain about a transition to electric vehicles.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Visions for the future differ from Tesla and BMW (Image: Teslarati)

A recent example comes to us courtesy of BMW. John Carey (via news.com.au) sat down with Klaus Frölich, the 58-year-old BMW board member in charge of development. According to the senior BMW exec, electric vehicles will always be more costly than gas-burners. “No, no, no,” was Frölich’s reply when asked if EVs will ever equal the prices of equivalent conventional cars. “Never.”

“It’s very simple,” says Frölich. In EVs with 90 to 100kWh battery packs, the cell cost alone will be $17,000 to $25,000. “You can produce whole cars, only with the cost of the battery,” he says. And Frölich doesn’t buy into the theory that when batteries are being produced in larger numbers, prices will fall. Instead, he deflects — noting certain materials in batteries which may become more expensive.

Above: Tesla’s Model 3, meanwhile, goes Pac-Man on BMW and the entire mid-size luxury sedan market* (Source: Reddit / Lord Zeekos via Twitter / Walter MacVane)

An example, he claims, is cobalt. “When everybody wants to have cobalt, the prices of cobalt will not go down, they will go up,” Frölich predicts. Nevertheless, he says BMW is working to secure low prices for cobalt out until 2030. “We are the only ones who are doing that,” Frölich claims. Hmmm.

Even though BMW plans to grow its portfolio of electrified vehicles, Frölich sounds anxious about leaving the gas-guzzling internal combustion engine behind. “So, it’s a nightmare that an electrified vehicle will cost the same as a combustion-engined car,” Frölich says. So, it’s no wonder BMW fans are backing away from the brand. And (more than) a few are coming around to Tesla.

===

Source: news.com.au / *Chart sourced from US sales data via Good Car Bad Car for September 2018 (Note: Tesla doesn’t break out sales by country, and the Model 3 tally assumes some deliveries to customers in Canada)

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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281 Comments on "BMW Board Member Talks About Electric Car Cost Nightmare"

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deine Mutter

Obviously it is true that electric cars will never be cheaper than combustion cars. No matter how cheap batteries will become they will always cost more than a plastic container for fuel.
The question itself is completely missing the point. The cost of the car is only one aspect.

Vexar

An EV drivetrain is something like a third the price to build versus combustion, plus there are several systems no longer involved in the cost of the vehicle, like a transmission or an exhaust. Don’t buy into this guy’s whining. Look into the numbers yourself. You can do that by doing a seach for past articles here. I would start by looking up German labor unions. Oddly, that is where tge truth seeps out, union fights!

deine Mutter

A combustion engine including the gearbox and exhaust system is less than $1000. You don’t get a battery pack for that.

Kbm3

Good one! A BMW engine, transmission, emissions systems altogether cost $1k.

Made my day:)

Undertaker

So how much is it, then? They sell complete cars for such a low price that if you’d actually made any calculations you’d have noticed that there’s not much budget left for the engine. They are unbelievable cheap. The engine is something like $300-400.

Will

Typical is 10 to 20% the cost of the car. Given BMWs gross profit of 20% I will assume about 30% on their cars and the engine is on the lower end of the typical cost since more will be put into luxury items. This means a hypothetical $50k car would cost about $35k to produce and the engine around d 3.5k. Yes, I am making some pretty loose assumptions but I think you will find my numbers pretty close. This does not include support systems or the rest of the drive train.

Fool Cells

i was going to say, a quick google shows rebuilt/used BMW motors going for slightly over 3k. Brand new would be in the 5k range.

Undertaker

That includes profit margins and what not. A typical gas engine is only a couple hundreds for the MANUFACTURER.

zzzzzzzzzz

It depends on what kind of engine. $25-$30/kW ICE drivetrain factory cost is accepted norm in such calculations. VS $10-$15/kW for electric drivetrain.
It may cost more for specialized high performance engines and it is niche where EVs may have some cost advantage.

But for mass market cars ICE drivetrain is still much less then Li Ion cell cost. And you have battery pack cost that doesn’t go down automagically just because cells (hope springs eternal) get cheaper. Or somebody pretends that they are cheaper for marketing purposes.

$20,000 for cells plus more thousands for pack is way more than a FACTORY COST of the whole mass market car. Then you have warranty, retail markup, R&D, administrative costs above factory cost. Sorry to break your dreams, it is just what it is.

MaartenV NL

The German engineers tear-down of the Model 3 LR came to a parts and material bill of $18,000. They calculated another $10,000 for labor and other costs.
When the Tesla Bill of Materials to German standards is $18,000 for the whole car, the BMW acquisition department has a problem buying batteries.

zzzzzzzzzz

There is much more in retail cost of car than bill of materials and labor. And even this bill assumes competent manufacturing at scale. Undocumented alien Dreadnought in sweatshop tent in California is likely to cost more when you add all waste.

philip d

“$20,000 for cells”. Um, who’s buying cells for $200 kWh anymore? You numbers are way, way off.

LG Chem is selling them to GM for $145 kWh right now. And that was a deal they locked in 2 years ago. Will be $100 kWh for cells in 2020. Then there’s Tesla/Panasonic which are likely already close to $100 kWh for the cells and $150 kWh at the pack level. So right now a midsized Model 3 with 310 miles of range has a pack that costs around $11,500. In 2021 likely close to $100 at the pack level.

Martin Lacey

BMW make their own engines…. they don’t buy them in for a couple hundred $’s.

It’s common knowledge that a new engine/gearbox, exhaust, emissions control (hardware and software) is in the region of $6,000.

That’s the price parity point that industry analysts work too. If any automaker can produce a 60 kWh pack and motor for $6,000 it is assumed the showroom sticker price will be the same as an ICE version of the same vehicle.

You can argue the point until you’re blue in the face, but the industry knows better than you and I.

Undertaker

It’s not “common knowledge” because its not true! Is it so hard to understand that there are normal gas cars that cost around 10 000 EUR? This means that producing the car cannot cost more than 5000 EUR. And 10-20% of this is the drive train.

MaartenV NL

The new Renault K-ZE is competing on price with these less than €10k cars. Next year in China, after that the rest of the world.

Progress has passed your outdated opinions.

super390

Those AREN’T BMWs! This article is talking about premium-priced German cars, whose stickers and repair costs are jacked way up.

philip d

Then there’s the question of how much is gas vs. how much is electricity per mile driven. And how much is maintenance over 5 years of ownership.

zzzzzzzzzz

It is mouse nuts compared to car depreciation. You can calculate it yourself.

What is really expensive in Europe is gas taxes. But is
questionable how long tax-free bonanza for plugins will last, governments need to balance budgets one way or another. Electricity is also taxed, up to 30 cents/kWh in Germany.

Robert Weekley

And ALL that Tooling, is going to become a “Sunk Cost” when sales drop, even before they hit “Zero!”

More Model 3’s will be “Sold” by owners of them, than by most of Elon’s “Tweets”, and just continuing at Septembers Sales and Delivery Rate, for 3 more Months, equals about another 70,000 Model 3 “Salespeople” on the Road!

How Many Salespeople do USA & Canada BMW Dealerships have?

What is that going to do to help BMW understand that EV’s ARE Coming, and that they need to figure out how to get cheaper & better batteries? Soon! (Like. “Yesterday!”)

pjwood1

I think Will is close, on a cost basis. It’s something all makers keep close to the vest. I remember engine/transmission being discussed as $3000 to an Impala, for GM, in what seemed a revealing context. For mainstream engines, alone, to retail for 5k is also believable. Then, there is the sum of the parts…that wear out….calculation. This is what is underneath Germany, and others, tears. Losing the markup on all those parts.

Electric cars don’t need mufflers, but you can spend well over $10,000 on parts aft of the exhaust manifold in a diesel. Even as batteries become proprietary, and companies like Tesla do all they can to prevent you from working on your car (or their Model S-degrading V9 software), the other ICE-entrenched automakers have sunk costs to protect. I am not being reverent, to brand, here. Just realistic.

Love it, when unfiltered board members let us know what we have been thinking all along.

Undertaker

Retail price has NOTHING TO DO with the costs for the MANUFACTURER. The retail price of a new manual gearbox for an old Peugeot 206 is 5000-6000 euros which is insane. When those cars were built PSA didn’t pay 5000 euros for the gearbox. Maybe 150-200 euros MAX.

Undertaker

LOL…3.5k is way too expensive…it’s couple of hundreds depending on the source.

Mike

The support systems are a huge cost. Consider the Platinum, Palladium and Rhodium that go into catalytic converters. There are between 3 and 7 grams of Platinum in a converter at 29$ a gram. Exhaust system are really expensive. Also figure the engine, block, head, transmission case and differential cases probably weigh a bare minimum of 300 lbs with aluminum at 1.02$ a pound.

That is 500-1500$ in raw materials alone.

P Roppo

Nonsense. It’s nearly worth that as scrap metal.

Undertaker

No, it’s not.

REXisKing

I heard BMW engineers work for free.

William

That’s a well known FUD Fact.

Clive

That’s called hearsay REx

Xcel

They pay to work for BMW.

amt

That’s Why BMW Cars Are So Expensive ! …lol

jzvm

A used BMW engine for a 2016 BMW 3 is about $4k and a used BMW engine for a 2016 X5 is about $10k. That is just the engine block. If these engines are $1k to produce new including transmission and emission systems, I am sure there would be some new engine blocks on the market for less than $4k.

deine Mutter

because it isn’t on the assembly line.

jzvm

I still think BMW is missing out on a great opportunity to make a lot of money. If they can make just the engine block for $500 (assuming transmission and the rest of the ICE parts are the other $500) on the assembly line and they can sell it for $4k, why would they not do that. That is an 87.5% margin. I think the real answer is that the $1000 is a made up number while there is actual market data for used engine blocks.

deine Mutter

This is what they do. But lifting it into a crate and all the other shipping infrastructure for just a couple of engines a year make the replacement engines muvh more expensive to them.

jzvm

The used engines also have to be shipped. Those prices I quoted are from online vendors of used auto parts. I just checked the shipping cost for one of them. They charge $245 to ship the engine block for a 2014 BMW 5.

Undertaker

There was a study that if you build an MB out of spare parts only you’ll end up with a price 10x the list price of the same car.

Once again: the prices of used or whatever engines HAS NOTHING TO DO with the prices that manufactures pay for their engines on the assembly line.

Alex

I think it must be a lot worse, but it’s the same for any car, Tesla also. Drive unit price for an EV outside warranty is as insane as an IC engine.

Some Guy

Lifting an engine in a crate can be done even in a small garage, and cross country freight can be had for a few hundred Euros in Europe. If the sender is a small garage, that ships one engine per month. Surely, BMW has to pay 10 times as much if they do it frequently nd needs Gigafactory sized infrastructure for that purpose…

Undertaker

Jesus…that’s not what the MANUFACTURER pays for it! Are you people really this lost?

super390

If you claim 1000% markups, you have to prove it with date instead of repeating it over and over again because you refuse to accept the coming of electric cars, on a site that exists for the benefit of electric car fans.

Clive

Jesus has nothing to do with this.

Gasbag

“combustion engine including the gearbox and exhaust system is less than $1000”

There are more costs to an ICEV than that. You have to add pollution controls, vibration mitigation, sound dampening, heat dissipation, etc and of course the cost of assembling that hairball. If you do go with the cheapest components then you end up with a vehicle no one wants….. at least not in America. Realistically the costs of your Yugo like vehicle are much higher.

Undertaker

There’s no sound dampening or heat dissipation in EVs ? Ever heard of Model S overheating? Ever heard of battery coolant?

Gasbag

“There’s no sound dampening or heat dissipation in EVs ? Ever heard of Model S overheating? Ever heard of battery coolant?”

That is in the pack cost that we’ve already accounted for clown shoes.

Clive

Cool story bro. The tranny alone on my BMW costs well over 5K.

SJC

A new engine costs $5000 retail, cost to make might be have that.

deine Mutter

way less. The retail engine includes packing and shipping of a sensitive and heavy object with a funny shape.

SJC

You are SO far off with the $1000 for a new engine/transmission manufacture it is absurd, show the proof, post the links. I can show you a new engine that costs $5000 and you are saying it cost $500 to build?
Prove it!

Undertaker

You can buy new cars for ~10 000 euros and that includes CO2 taxes, 24% ALV. The whole car must cost around 5000 euros to make. Depending on source the drive train cost is 20-25%. 20% of 5000 euros equals 1000 euros.

Now show me how it would be possible to make an EV that costs 10 000 euros and has a similar range of 600-700 km?

super390

This is an article about the head of BMW, which does not make 10,000 euro cars, whining about battery costs as an excuse. With the average car costing over 30,000 bucks now, and no one in America in particular buying small cars, this is the price range that is relevant.

And screw range. We can plug in at home. You keep moving the range goal posts to protect criminal polluters. VW/Audi and BMW and Mercedes carried out a criminal conspiracy against democratic governments around the world. What does it cost to build a diesel that actually passes emissions regs?

Dave K

It’s also common knowledge that OEMs make little if any profit on the cheap cars. Also that high power engines and drivetrains cost a lot more than dinky little 4bangers in cheap cars.

Gasbag

“You can buy new cars for ~10 000 euros”

According to Trucar.com the series 2 BMW has a street price of over $39,000 and the Nissan Leaf goes for $28,000. Is there a cheaper model BMW available in Europe?

Benedictus

The cheapest new BMW in Germany is the BMW 116i, that starts from € 21.000 excluding 19% VAT. It has an amazing 80 kw / 109 hp and will do 0 – 100 km in 10.9 seconds, and it’s missing the back doors… LOL

Benedictus

BTW: That is about $ 24,120

Where is this magic $ 10,000 BMW?

Nonbiker

No one said that it would be a BMW. Does BMW have some miracle engines that costs more?

Gasbag

“”Does BMW have some miracle engines that costs more?”

No miracles but like all things BMW it costs more.

Clive

I looked up the real cost to purchase a replacement transmission for my BMW.

Close to $13K USD ‼️

SJC

Engine is $3000, transmission is $2000, you are WAY off.

deine Mutter

if you want to buy one. That isn’t what it does cost BMW right on the assembly line. You buy cars for less than $5000 and they obviously contain an engine and a transmission.

Will

But not a BMW engine and transmission.

Undertaker

That’s not the point. ICE is ICE and it’s incredibly cheap FOR THE MANUFACTURER.

Clive

Costs are incredibly cheap for an Undertaker…

Undertaker

That’s RETAIL!

SJC

Automatic (6) speed transmission cost : MY $2,000 (2012)
Engine is $2000-$4000, read the article…REAL facts.
https://www.researchgate.net/publication/260339436_An_Overview_of_Costs_for_Vehicle_Components_Fuels_and_Greenhouse_Gas_Emissions

Some Guy

Yeah, sure, in a lawnmower or two-stroke scooter. Unless you are cheating, 1000$ does not even buy the metal, as you need at least 100 kg of all kinds of alloys and don’t forget about the precious metals for the catalytic converter. Can be as much as an ounce in a big one for a truck.

Dimitrij

“Less than $1000”, hmmm … I think you are talking about a BMW engine starter 🙂

super390

A 1960s combustion engine including the gearbox and exhaust system might be that cheap. The damn things keep getting more complicated precisely to battle their own pollution and fuel consumption. Nine-speed transmissions? Variable camshafts? Twin turbos on everything?

Robert Weekley

Recheck those prices at the Dealer Parts Counter, and remember to include all the extra bits it needs! I doubt that even at half that price, would take you down to $1,000.00!

I had to do a Remove and Replace on a New Yorker Engine, 20+ years ago, and that ran $2,800 then!!!

rey

Try replacing a Mercedes AMG engine.

Jaimie

Had to replace the gearbox of an Opel Zafira : 3000€. ONLY gearbox !
German but in mine opion less expensive than BMW.
So i think you mean 10000 $

rey

Tell that to anyone who has to replace their AMG engine built by Mercedes

Muthulingam

Dude… An Electric Motor and a Single Speed Transmission is way cheaper than an Internal Combustion Engine and an Automatic Transmission….
Batteries, should be compared with Fuel Cost, not Powertrain

Doggydogworld

This thread contains massive amounts of misinformation.

The UBS/Munro Chevy Bolt teardown report compares manufacturing cost for the Bolt drivetrain vs. a VW Golf Wolfsburg 1.8 TSi. The cars are of similar size and power/weight ratio.

VW drivetrain – ICE, transmission, ECU, all exhaust and auxiliaries – is $4500.
Bolt drivetrain – motor, gearbox, all power electronics and cabling – is $3800.

This is from detailed teardown cost analyses by people who know vastly more than anyone on this message board. They roughly estimate Bolt drivetrain can get a bit below $3000 in 2025. Tesla is a little ahead of GM/LG and would be in the ~3400 range at this 150 kW level.

Battery cost will NOT fall enough for BEV purchase price to match ICE in this or similar categories. Drivetrain savings are much greater for high performance sedans and CUVs. That’s the BEV sweet spot for the next ~5 years.

Gasbag

“Obviously it is true that electric cars will never be cheaper than combustion cars. No matter how cheap batteries will become they will always cost more than a plastic container for fuel.”

Obviously it is true that tech and economics are not your areas of expertise The relevant initial cost of ICEVs is in the labor and engine not the tank. From 2010 to 2017 battery prices fell by over 80% while engine costs went up slightly. If battery costs fall 80% from their 2017 levels material costs of BEVs will be less than ICEVs and labor costs are already less. That doesn’t even broach the operating costs.

deine Mutter

Even at $50 per kWh in the finished pack a combustion car would be cheaper to put on the road.

REXisKing

And yet automotive consultants have been saying for years 100 per kWh was the magic number were all manufacturers would switch to EV production.

deine Mutter

because the price of the car isn’t everything. Obviously an EV offers more value to the customer and you can charge for that as well. That is why I have written in the initial comment that the question is missing the point.

pjwood1

“Obviously an EV offers more value to the customer” -This is not obvious to the vast number of people buying cars. “The media is the message” is one of few things I learned in high school. Those protecting conclusions opposite of what you call obvious, are what gives rise to little websites like “Inside EVs”.

deine Mutter

I don’t think this is true. People quickly started paying a couple of thousands more for a diesel because they understood that fuel costs are lower.

super390

Not in America.

super390

If the EV offers more value, then you compare it to a better gas-engined car.
You want to compare EVs to nasty 4-cylinder econoboxes. What about the premium that people pay for sixes and eights, to get better performance and less vibration? EVs beat them both.

Will

The price of batteries IS falling to $100/kw-h and all manufacturers ARE switching over to EV production. They are just complaining about it, loudly.

SJC

If Nissan can make a Versa that sell for $10,000 they can make an eVersa that sells for $20,000. Honda will have the eFit that sells for under $20,000 in 2020.

Will

Hope so, I can’t afford a new Tesla.

Troy

They did make an eversa — but they badge it as Leaf.

I do suspect $20,000 is their actual COGS so they made tons of money when I paid $28,000 + tax etc for my 2018 S.

Then again running a car co co comes with a ton of overheads too. One recall can wipe out half of that profit easily.

Pushmi-Pullyu

“Even at $50 per kWh in the finished pack a combustion car would be cheaper to put on the road.”

This is like arguing that people won’t buy motorcars because they need expensive gasoline, and horses can eat grass for free.

Auto makers have had more than a century to bring down the cost of making ICEngines. You’re talking about an engine with two to three hundred moving parts! Just because you can find a Yugo-quality ICEngine that can be had for only a few hundred dollars, doesn’t mean the average engine in the average car costs that little, especially not when you add in the transmission, exhaust system, and all the kludges which ICEngines need to work without melting or tearing themselves apart. You can add in the air filter, oil pump, fuel pump, and a lot of other components which are completely unnecessary in a BEV.

Once legacy auto makers start making BEVs in large numbers, it won’t take them many years before they figure out how to make them cheaper than comparable gasmobiles. Certainly much less than the century it took them to be able to produce a Yugo-quality gasoline engine for less than $500 at today’s prices!

deine Mutter

you are missing the point. The point was that a EV will always be more expensive to build. This is simply a fact. That doesn’t mean you can’t make EVs that offer better value than an ICE car.

MaartenV NL

No, it is not a fact.
BEV will be cheaper to build than comparable FFV in the near future (next couple of years).
That is looking at the historic costs developments and reasonable expectations for the future.

Pushmi-Pullyu

“…a EV will always be more expensive to build. This is simply a fact. ”

Not only isn’t it a “fact”, there is generally accepted consensus in the auto industry that somewhere between 2022-25, EVs will achieve price parity with comparable gasmobiles. And then it’s going to be downhill all the way for gasmobiles.

Apparently a few of you gearheads, who have decided to crash this EV supporter party, are used to your assertions going unchallenged even when they are utterly contrary to well established fact.

https://evobsession.com/ev-revolution-timeline-evs-cheaper-icevs-2022/

https://www.forbes.com/sites/neilwinton/2017/05/22/electric-car-price-parity-expected-next-year-report/#4f0d29387922

MaartenV NL

The ICE drivetrain from a €10,000 car is not acceptable in a BMW5 series car.
An electric drivetrain for a €10,000 car is nearly identical to the Model S drivetrain.

Tesla started by selling Model S 60 with a drivetrain in the BMW 7 drivetrain price class.
After a time the Tesla S85D did have a drivetrain in the BMW 5 drivetrain price class.
Now the Tesla Model 3 drivetrain in the BMW 3 4-cylinder drivetrain price class.

In 2025 there will not be a mass market Car/SUV/Truck categorie without at least price parity for electric vehicles.
In the car classes above $25k the electric offerings will be significantly cheaper than comparable ICE offerings.

Andy

Even at $50 a 300kWh battery will still be around $15,000, way more than the equivalent ICE drivetrain in a pickup or larger SUV with towing in mind. While smaller vehicles with smaller battery packs may well be comparable, longer range vehicles are unfortunately going to be a while longer.

super390

Engine and transmission costs will skyrocket just to eke out 10% improvements in pollution and MPG.

Thermanator

I have real data that battery prices between 2010 and 2018 only dropped by 30%. We will need totally new chemistry of the anode and cathode for real price improvement

Undertaker

Not sure why your comment got voted down. Maybe some people really do believe that a plastic container can be more expensive than 100 kWh battery. Sad times..

REXisKing

Yes, and the high tech 4-6-8 cylinder high horsepower engines are build for free by BMW engineers and then the compliance tests are also free, the catalytic converters are free, the 8 speed automatic transmissions are free, etc…

MikeM

REXisKing: Did you forget the fuel? It’s free too!
Yes, yes, OT! Couldn’t resist – sorry!

Undertaker

As if electricity is free…

super390

What part of nearly 5 miles per kilowatt can you not understand? What does gas cost in Europe?

Andy

“Gas” costs around 30p a litre. The tax on it costs around 100p.

That 100p tax per litre of petrol is going to have to come from somewhere else eventually. How governments claw that lost tax back will be interesting. Blanket increases on purchasing cars, higher yearly fees, high taxes on EV chargers?

arne-nl

You pay for the health damage that you gas powered cars are causing to citizens all over Europe. Nothing unjust about that.

Dave K

Not quite but nearly, I’ve been driving EVs for a decade now, electricty is dirt cheap!

Undertaker

They can produce whole cars for the price of a 100 kWh battery pack! What is it that you don’t understand here?

MaartenV NL

Completely true, Tesla can produce the Model 3 for the price BMW pays for a 100kWh battery pack.

Will

Or maybe some people are smart enough to realize you have to compare the complete drivetrain with support systems.

BojanF

Even if you do that, and the EV turns out to be cheaper to make, that doesn’t mean it will be cheaper to buy.
In the end, market forces will make it cost whatever people are willing to pay for it. Since it is a superior product, people will be willing to pay more for it than for an ICE vehicle, therefore it will cost more.

Undertaker

Ok. Let’s just agree that EVs are far cheaper than gas cars. Fine. Tesla Model S costs $30 000.

super390

The burden of proof is on you to prove that batteries won’t keep getting cheaper as they have for years.

pjwood1

Maybe the votes are coming from the supposition EVs will always be more expensive than gas cars, not gas cans?

Limited battery materials offer a unique place for a “new entrant” to disrupt the car market. Beyond the labor costs of ICE assembly, I think these comments underweight the carefully built “tier 2”, “tier 3” supply networks that do not really exist for volume EV manufacture, yet. “How are we going to make money, when we don’t need to do this, this and that, anymore”, frustrates boards whose corporate mission statements say something about “maximizing profits”. Profits which were attached to inordinate value-added items, that are suddenly going away.

Conclusion: Must throw shade, crappy tires, crappy looks upon EVs.

Pushmi-Pullyu

“Maybe some people really do believe that a plastic container can be more expensive than 100 kWh battery.”

Your argument seems to be that the entire BEV powertrain should be compared in price to a plastic gas can.

Does that sort of B.S. argument actually work for you on gearhead forums?

Gasbag

In Mr BMW for brains simple world the price of cobalt rises endlessly with increased battery production. In the world the rest of us live in the price of cobalt was almost 40% higher just seven months ago. This should surprise no one who follows the mining industry as it was forecast last year based on increased production schedules.

Even if he only followed the battery industry he might be aware that NMC 811 replacing NMC 622 next year will mean half the cobalt per kWh and there are other chemistries which use less cobalt or none at all.

REXisKing

https://cleantechnica.com/2018/06/09/cobalt-free-car-batteries-in-the-works-for-panasonic-tesla/

jzvm

And in the world that Mr BMW lives in, there is an unlimited supply of Oil and there is no climate change. I would love to live in his world. Unfortunately I am stuck in a world where there have been wars fought for decades to get access to oil and where climate change is real. I guess he bought enough gasoline to fuel his own cars until 2030.

pjwood1

Forget the “gold peg”. What BMW World really needs is a “cobalt peg” 😉

Will

The cost of a battery vs gas tank is a red herring. You have to compare the cost of the complete drive trains AND THEIR SUPPORT SYSTEMS. Once you do this, you realize that EV drive trains are only slightly more expensive that FFV and the cost is falling rapidly. In two or the years, the complete EV drive train will cost the same and after, will be cheaper. The speed of this coming technology change over cannot be understated. In five years the resale value of FFVs will fall to near scrap value as the used EV market will develop in three years and no one will want the maintenance headache of older FFVs. This will then depress the value of new FFVs as well. BMW has its head in the sand and they will be the first casualty of the technology change unless they wake up and throw everything into EVs before they are left behind. They have time as Europe is Tesla’s third target after China, but only about five years.

REXisKing

OIl Refineries are well known to be free, and sell their product for nothing.

William

Free oil refineries, are as easy as calling Saudi Aramco. You just have to have them build it, and of course the the oil will come!

“Details of the refinery’s costs and scope are to be worked out later.” At least it’s Free for Now!

Later, not so much.

https://www.google.com/amp/s/www.rferl.org/amp/29526706.html

Undertaker

That doesn’t change the point. A 100 kWh battery currently costs 15 000 – 20 000 euros. It doesn’t matter if you factor “support systems” in or not. You can buy new gas cars for less than 15 000 euros and they include “support systems”. People fail to understand how incredibly cheap the ICE parts are for the manufacturers. They have had 100 years to bring the costs down..

Some Guy

Here is the kicker: For a good deal of small city runabouts, 30-40 kWh are enough. Make it 50 kWh and add a charging solution for the occasional road trip, and you have a decent product (Model 3 base version)
The large packs at Tesla will likely be at 130$/kWh by the end of the year.
That’s equivalent to a 6.5 k$ battery pack. Now, if one can make an ICE that sells for less than 15 k€, take out the ICE related junk and leave the “car” part you got a good portion of the battery cost back in. Then sell that entry segment BEV in large quantities for less than 20 k€, and with fuel savings you are way cheaper than ICE equivalent after 2-3 years.
Think that is impossible? The Chinese will teach you how it’s done, just wait a few years. First Chinese EV plants are already built in Belarus, to cater for the Eastern European market.

Troy

Dis is my view too, sitting parked in my 40kWh Leaf as I type this.

50kWh plus expanded charging infrastructure would be a perfectly acceptable minimum.

40kWh is OK now but I would like another 10kWh (25%) as a buffer on pack degradation.

100kWh is a lot of overkill if you can reliably get 30kWh of recharge in 30 minutes.

antrik

Which maker(s) have plants in Belarus?

I heard about one (I think SAIC?) having one in Kazakhstan for a while — but thus far only building rather symbolic volumes…

Mir

Yeah, but the second someone mentions less range, the collective Tesla cult rises up and starts dumping on the model because “it’s 2018, and there is no excuse to have less than 200 miles of range.” Can’t have it both ways folks. Either everything has to be 100kwh 300+ miles or must accept that 100-150 miles is acceptable range. And it really is!

antrik

“The collective Tesla cult”. Right.

MaartenV NL

When you talk about 100kWh batteries, you talk about the BMW 5-series or better with at least a V8.
The Tesla price for those batteries is about €10,000 now and falling. That is tough competition for BMW, but it is what they have to face.

If this thinking is directing the BMW strategy for the next years, BMW is toast.

antrik

Actually, the used EV market will remain relatively small, as long as market share rises so fast that the number of EVs produced in the last two years is larger than all previous years combined… Which will be the case for at least a decade still.

scott

An ICE drive-train is infinitely more complex than an EV drive-train. The reason it cost less to produce gassers is automakers have been doing it for over 100 years.

MDEV

An IPhone won’t ever be cheaper that an old cord telephone, technology cost.

Stan1
This is utterly false. Contrary to your claims, the general costs of both electric and internal combustion engine (ICE) drivetrains are fairly well understood. When a teardown specialist like Munro develops material costs, he has an extremely good handle on the total costs at production scale. His cost analyses are reliably close: https://insideevs.com/munro-tesla-model-3-profitable/ EV drivetrains are cheap. They generally cost significantly less than internal combustion engine (ICE) drivetrains. The only reason ICE have had a price advantage is that once the drivetrain is paid for adding range for ICE vehicles is cheap. You just make the fuel tank larger. To add range in an EV has been comparatively expensive. Every cell adds cost, volume and weight. Extremely short range EVs have therefore always been fairly cost competitive. Lead acid battery powered golf carts have held their own for a long time. But, adding enough range for even practical use in a road worthy car had been fairly expensive. Lithium-ion batteries changed that equation. Electric motors already were smoother than even the best ICE. Adding enough range to get a couple hours of highway driving range with lithium had the benefit of enabling high end competitive power. EVs have been cost… Read more »
DonC

You have a point. However, an electric vehicle can have about 10% of the parts. And not just parts but moving parts. Take the gas out of an engine and you don’t need the engine block, the exhaust system with muffler and cat converter, spark plugs, carburetors, valves, fuel injection systems, and automatic transmissions. This is why the Chinese government wants electric vehicles — China doesn’t have the chops to make ICE vehicles but may be able to make much simpler electric vehicles.

So while you’re right that a battery pack will always cost more than a gas tank, at some point electric cars will likely cost less to build than electric vehicles. Of course when that happens is anybody’s guess. My guess would be 5-7 years barring some battery breakthrough. Eight years ago you could get a Leaf that went 70 miles. Today for about the same price you can get a Chevy Bolt, which is a much better car that goes 240 miles.

The big problem for BMW, and for all the established auto makers, is that software is going to be the force driving the industry and it doesn’t have any expertise in this area.

Hauer

Fine.
If BMWs cell (!) cost are indeed 250,- per kWh they are dead.

Alex

I just bought 18650 cells (from Sanyo – the same as Panasonic) at about $180/kWh. Assuming that cell is 75% of the cost I could be a lot better that $250/kWh.
BMW must be doing a lot better than I do. Actually the i3 is getting bigger batteries without getting more expensive. I think BMW is just being a “cry baby”.

(For that price I had to buy 1000 cells).

Some Guy

180 $/kWh is a fair price for a quantity of 1000.
BMW has chosen the prismatic hardcase type cells, which are a bit more expensive to make than the cylindrical ones.
But a good deal of BMW interview can be considered tactics, blow smoke to prevent competitors learning their real costs. If they say 170-250 $/kWh, I’d say around 150 $/kWh is what they are paying now.

MaartenV NL

The assembly costs for the prismatic hardcase cells into a battery pack are about $50/kWh higher than when using the 2170 cylindrical cells.

Alex

I think prismatic are cheaper to build our the difference is irrelevant.
The advantage for a small consumer is that 18650 are common and so largely available that they are “cheap”.
Per example the 21700 cells are way more expensive if I want to buy them – like twice more or so.

antrik

That’s Australian dollars. The range given seems more or less realistic for current cell costs…

REXisKing

Yes I’d be shocked to see them be paying more than $100 per kWh today.
They buy in bulk with long term contracts. They don’t pay retail.

Pushmi-Pullyu

I’d be shocked if they don’t pay substantially more than USD $100/kWh. Elon Musk said at the last stockholder’s meeting Q&A that Tesla believes it can get its cost down below $100/kWh by the end of this year. Many people are saying that Tesla has lower battery costs than any other EV maker, which is certainly believable given that they buy in larger quantity than any other.

OTOH, Mr. BMW’s claim for $17,000 – $25,000 for the price of cells alone in a battery pack, is absurd. Maybe they have to pay that much for batteries in a one-off concept car or a few test mules, but nobody will be paying that much for cells in quantity in a mass-produced car.

Now, if you mean Australian dollars; I see the current exchange rate is USD $1 to AUD $1.42, which means the prices will be higher in AUD… not lower.

antrik

Err, what? The numbers in USD will obviously be lower. Or you can just take the Euro prices from the source article. (100 – 150 Euro per kWh at cell level.) Either way, it puts the range for the cell price at some 115 – 170 USD. That sounds about right. Tesla should be a tick lower than $115 by now, and $170 would apply only to some very old or low-volume contracts — but the range is not significantly off…

Taylor Marks

About three weeks until we get Tesla’s Q3 numbers… might be rather difficult to keep up the argument that batteries have to cost $250/kWh at that point.

Although actually, the Model 3 batteries aren’t even as large as this guy is talking about.

Doggydogworld

I expect Tesla to report a small profit in Q3 because they sold a ton of Model 3s at an average price of $60,000 vs. a cost of $51,000.

But how does a $51,000 production cost disprove $250/kWh for the battery? I know Musk says the cost is much lower, but do the numbers back him up?

REXisKing

Tesla cars are reported to have a 25% profit margin.

Will

That is the S and X. The 3 had to get production up to gather margin down. The 3 ran at a loss last quarter but not much of one. I expect to see a profit on it this quarter, but not 20%. The 3 should be close to 20% by the end of Q4.

antrik

The projection was 15% margin on Model 3 in Q3.

Alex

That’s very unlikely, BMW is having an operation profit of 8% to 10%, but Tesla so far just lost money.
It’s true that during Q2 they were still ramping up production, but let’s see Q3 – they’re no longer a small quantity maker, if they don’t show solid profits soon it’s not going to look good for them.

Pushmi-Pullyu

25% gross profit margin, yes. Not net profit.

Rusty

36% gross on the RWDLR Model3 at scale according to Munro. Maybe more if you factor in the lack of dealerships.

MaartenV NL

That is when production is stable in 2019-H2.
At the moment 15% would be great.

Alex

If that’s true they’re going to show a ton of profits this quarter.

Doggydogworld

Munro numbers are almost always contribution margin, not gross margin.

Telsa goal is 25% gross margin for average Model 3. Basic LR AWD will be pretty close to average.

zzzzzzzzzz

Yes, it costs $4.20 for him!

vr

Tesla competition royally screwed, no Gigafactory of their own= higher cost of battery pack.

Lou Grinzo

I am reminded, yet again, of the observation that Tesla is not a car company, but a battery company that also happens to make cars.

Years ago, many of us here saw the handwriting on the wall and realized that in a future with electrified transportation and much more massive use of renewable energy nothing is more important than securing the lowest possible cost (and reliable) battery supply. Musk saw that, and took the obvious, dramatic steps necessary.

I can criticize a lot of Tesla’s other decisions, but in terms of getting the proverbial “30,000 view” right on batteries, they were perfect.

vdiv

Should give some credit to JB Straubel and to Panasonic who have been a willing partner, giving struggling Tesla the benefit of the doubt on many occasions. Nissan built batteries in-house with NEC and has come to a different conclusion about lowering the price and staying competitive.

Pushmi-Pullyu

Nissan chose the wrong partner, NEC, which had/has inferior battery chemistry.

Tesla chose the right battery maker partner, Panasonic.

antrik

The LMO chemistry was pretty much the only choice at the time the original Leaf was devised. (NMC is a relatively new chemistry; and nobody but Tesla thought that NCO could ever work in a car…)

The newer Leaf batteries indeed are likely NMC as well — although AFAIK that has never been officially confirmed.

So no, chemistry choice was not the sole reason why AESC failed.

M3 Owned- Spark Leased - Niro EV TBD

Before Gigafactory, I’d say they made pretty good cars too — Model S, X and roadsters are pretty good vehicles last time I checked and were quite profitable models from the production standpoint and allowed for Phase 1 to be completed — raising capital and funds for Phase II — Gigafactory.

Gigafactory : economy of size and efficiencies coupled with incremental battery knowledge and progress has dropped their costs to complete Phase II and get to their ultimate Phase III — Model 3.

Model 3: mass produced vehicle at a reasonable price. They’ve finally reached mass produced with the Model 3 in the Top 5 sedans now — trailing only the Honda/Toyota cars. As production continues to ramp, we’ll finally realize the top prize of the $35,000 performance sedan of Phase III in probably 2019 end Q1….

Battery company? Absolutely. But also a pretty good car manufacturer is a niche product and showing it can do it for mass market too.

Alex

I understand your reasoning, but that doesn’t seem right, nobody sees car makers as engine makers per example.
Batteries will become a commodity, consumers in time will just want to drive without worrying about something in their cars called “a battery”

Pushmi-Pullyu

You’re correct; Tesla isn’t a battery maker. They have a close partnership with a battery maker, but those cells with “TESLA” stamped on the sides are made by Panasonic.

There are those who say Tesla isn’t an auto maker, it’s an energy company. Those people are wrong. Tesla gets something like 95% of its income from selling cars.

earl colby pottinger

Now, in five years the battery and solar shingle business should be a lot larger.

antrik

Still likely much smaller than the car business…

antrik

As far as I can tell the cells don’t have *anything* stamped on their sides. All these illustrations with “TESLA” on the cells are just artists’ renditions.

Pushmi-Pullyu

Tesla’s decision to invest billions in a battery Gigafactory is indeed paying off, and big time. They are the only auto maker outside China which isn’t facing a serious near-term shortage in EV battery supply.

I have been amazed at how many EV advocates even here on IEVs who have argued that other auto makers will simply buy batteries from existing vendors; that Tesla’s Gigafactory 1 is no advantage to Tesla.

How is that working out for those other auto makers? Not so well, huh?

MaartenV NL

It is working out great. It gives them a few years extra time to refine the art of BEV making. 😉

antrik

You are still missing the core issue. The reason legacy makers don’t have enough batteries to scale up their existing EV programs, is not that they decided to contract out the battery production capacity instead of building their own factories — the reason is that, unlike Tesla, they didn’t anticipate the need for more capacity *at all*. If they had, there would be no problem.

(Ironically, the one Chinese maker rumoured to have battery supply problems, is the one with in-house cell production…)

Viking79

They can make their own gigafactories or let LG do it, that isn’t the problem.

The problem is BMW and others don’t know how to make an electric car people want to buy. They are thinking in terms of their legacy cars. They need to design the car from the ground up to be electric and cheaper. Simplify the interior, etc. If you really look at the Model 3 it is a pretty inexpensively constructed car for $60,000. It consists of a gigantic battery and not much else, but it has the features people are willing to pay for. Speed, power, OTA, AP/FSD, SC, etc. The cheapness of the interior is done in a stylish way that people like.

Alex

It’s very hard for a German to make a cheap car. And cost savings for Tesla can go against them in the long term.
All their cars are pretty new, if they start to go bad let’s say after 10 years brand will gain negative awareness.
For Tesla is go or break, but for a premium brand that spent 100 years building their brand it’s not easy… Obviously they can lose brand recognition very fast if they don’t do the right move.

Viking79

I think legacy makes should make new brands to sell EVs, setup new retail stores, etc. Start from scratch. Volvo is doing this with Polestar.

This is expensive, look at Tesla, but really best way to compete. The next gen autos are going to be Tesla, and a few of the other startups might make it like Byton, Lucid, Rivian, etc.

Alex

I don’t disagree with you, but BMW brand and others premium worth money.
I had a Mercedes for a while – the car was flawless for what it was I must say – but the price was just absurd. Now I drive a car that is less comfortable, a lit bit more noisy, not so much refined, … basically it’s not as good even being a good bit faster. But is a lot cheaper.

Xcel

The legacy folks are feeling the pain. I love how Model 3 is outselling plenty of BMW sedans combined in the US, but also non-plugin cheap Priuses, which value dropped like a brick, despite the low price. Spectacular knockouts, and fast.

ffbj

BMW, you know what is really costly using cheap tin instead of silver for a connection switch which then overheats causing a fire and then ignoring the problem while hundreds of BMW cars spontaneously catch on fire. Now that’s an expensive problem that did not go away until you finally did what should have been done all along.
BMW has no credibility in my view.
As far as TCTO evs already beat gasomoblies.

Alex

Without incentives I doubt. I’ve thought about getting a leaf (without looking at depreciation, battery pack degradation, just price and fuel/electricity cost). At 10k miles a year I would never get my money back… Obviously we can argue about the fact that they don’t pollute, but I’m already considering huge tax on fuel (I’m from Europe).
The problem of many comparisons is that they use the same acquisition price as reference. An ICE car equivalent to leaf in my country is $10k to $15k cheaper.

If I had daily long commutes within the car range the story could be different I admit.

ffbj

Sure, it depends on your individual circumstances, how long you keep the car, how you drive it, and take care of it, incentives, though long distance comparisons show that over time bev are cheaper.
So, no blanket statement that they are always cheaper in every situation.

Will

You could also get a 2 or 3 year old used Leaf very cheap. Around $12k. If you are a two car household and typically drive less than 40 miles a day. This is my situation my spouse and I have a Leaf and a Prius. We live pretty cheap on these cars. You do have to baby the Leaf’s battery to save life span so it is definitely not for everyone.

William

What steps do you consider when babying or extending/saving your Leafs battery “life span”?

The “not for EVeryone” folks, might need some quantitative reaffirmation, in their active TMS battery purchase decisions.

Pushmi-Pullyu

If Alex drives only 10,000 miles per year, and lives in Europe so presumably does not experience 100+ degree weather often, then a used Leaf might serve him quite well.

And he would enjoy driving by gas stations, seeing all the poor souls still paying that exorbitant tax on petrol. 🙂

But then, it depends on how Alex divides up those 10,000 miles. A lot of Europeans depend on mass transit for commuting, but often drive long distances on weekend vacations. If that is Alex’s driving pattern, then an older BEV with sub-100 mile range, such as a Leaf, may not suit his lifestyle.

Alex

With current range, current infrastructure and charging speed, I could never have just EVs in the house. There are just too many times I drive more than 500km (300 miles) without having access to a charging spot – because I don’t have the time, or I simply don’t have a charger at all (like going to somewhere in the country).
I’m a terrible case for EVs, I don’t make many miles and majority of them are made in long trips :(.

Alex

You’re right but you can get an used ICE very cheap too :). Actually as EVs gain market share used ICE will lose value becoming cheaper.

MaartenV NL

The TCO of BEV vs FFV is only for cars above €50,000 comparable in Europe at the moment, when you ignore incentives.
In another 5 years, the BEV vs FFV will be equal or better for BEV in all VW Polo, Peugeot 208, Renault Clio classes.
In 10 years, there will not be a FFV that can compete on price.

Andy

Even then, generally only for those doing at least twice the average mileage.

There’s still a long way to go before TCO is lower for an EV for the average person. Incentives certainly help, but even then lower TCO is still specific to usage.

amt

+1

Texas Leaf

I could taste the Evannex-Tesla taint in the first few lines of this article. BMW has always been a niche market, high priced car manufacturer and I’m not surprised to see them get competition from another niche market, high priced car manufacturer. The fact that this article comes Evannex makes the article less than credible and makes me think that the BMW executive comments might have been taken out of context.

deine Mutter

This is just about the cost of the car. There are combustion cars that meet western safety standards for less than 7000€ ( including 20% tax). It will never be possible to sell an EV at that price point. Obviously the BMW laughs when someone suggests otherwise.

Will

Maybe true on sticker price for the forseable future but not on total cost of ownership. A car that price would be a nightmare in 5 years where a Model 3 will still likely be running strong with 80% battery capacity in 20 years. It is really just an entirely different product that does the same job. All you can compare is TCO and bottom line performance. In this EVs already win.

Kbm3

Provide evidence that his comments were taken out of context.

Chris

This is the actual article quote: “If you are at full scale, one kilowatt hour of battery capacity will cost between 100 and 150 euros ($150-$240). So this means if you see a car with 90 to 100kWh, the cell cost alone will be 10,000 to 15,000 euros ($16,000-$24,000).”
1.) the dollars are clearly Australian and we’re added by the journalist. Evannex eliminates the Euro estimate and makes people assume it is US dollar (since it’s a US publication).
2.) the BMW board members talks about the cost per KWH in a car. This is a system/pack level cost, not a cell cost.

So BMW says batteries cost 100 to 150 Euros at a pack level. This would be much less shocking, but would not make as good of an article.

Undertaker

150 euros / kWh * 100 kWh = 15 000 euros. You can buy NEW GAS CARS that are CHEAPER than 15 000 euros.

And this is the problem.

James P Heartney

You keep on insisting that 100 kwh is the base pack size (and comparing it to the cost of an entry level car). Entry level pack size would be more like what you see in a 2018 Leaf, i.e. 40 kwh. 40 kwh x 150 euros is 6000 euros, and that’s with the higher price estimate. At 100 euros per kwh, the pack price is only 4000 euros.

Pushmi-Pullyu

My sincere thanks, Chris, for researching this.

Evannex should be ashamed.

Another Euro point of view

Indeed, a disgrace.

Udi

100 euro = $115
10,000 euros = $ 11,500

antrik

Um, the very passage you quoted explicitly says “cell cost”. So no, that’s not pack level.

(The point about wrong dollars is of course valid.)

REXisKing

Oh, now we’re going to label them “Fox News” or something. Wow.
Can’t accept the facts.

Chris

I want electric cars to progress (and drive one myself). But yes, Evannex use the same out of context quoting and partisan writing style that Fox News uses so successfully. One has to call that out, otherwise we are as partisan as the electric car haters that quote old studies selectively.

antrik

The commentary added by Evannex is obviously biased; and the the dollar failure is unfortunate — but there is nothing out of context about these quotes.

Fool Cells

you mean label them “CNN”

Pushmi-Pullyu

Nope. We’re not Trumpians here; we know the difference between CNN’s real news and fake news.

Pushmi-Pullyu

Given what Chris reported in his comment just above, I think a comparison with Fox News is very appropriate. What Evannex has done, by twisting the truth and reporting figures wholly out of context, is nothing but Fake News.

P Roppo

Why didn’t you go to the original source provided in the article? It looks even worse there. “Never.”

antrik

Yes, the Evannex commentary is clearly not impartial — but the quotes don’t get any more context in the source article. If there is something taken out of context there, it’s not the fault of Evannex.

amt

Bottom Line…, Big Auto Always Works in It’s Own Best Interest With N0 Regard for Human Life , Safety, 0r Human Well Being. They Only Make Safety Improvements When They are Forced to “By Law”.

Prsnep

Everybody works for their own best interest, “big auto” or not. The world makes a lot more sense when you accept this.

Brian

He’s clearly rattled by the Model 3’s success. He’s also probably having to defend his worthless investment in fuel cell R&D.

Xcel

It is embarrassing for a performance brand like BMW to jam a bulky fuel cell which can’t perform along with bulky and heavy h2 high pressure tanks, all of which is distorting the center of gravity and inner space layout. And they failed, and it is bad.

amt

And Worthless Contribution To His High Paying Position…

Another Euro point of view

Although the battery price reported by this gentleman seems too high we would need to see tesla at least break even one full year before concluding about profitability of manufacturing EVs with current technology. I just saw in the news that the new Kia Niro EV will be priced EUR 42.5k in france (equiv. USD 49k). No mass market EV at this kind of prices. I take it thzt with present technology there will be no mass market breakthrough of EVs and probably the only reason why groups like VW invest massively in EVs is that they believe that technological progress will make the mass market EV possible in relatively short term (2 or 3 years).

Kbm3

Model 3 is a mass market breakthrough. If 4th bestselling car in the country is not mass-market, what is?

Have you not been paying attention at all?

Will

You must hate autocorrect as much as imdo.

Will

Have to ask, how do you define mass market EV? It seems to me the Model 3 is there on numbers sold, over 100k this year already, and the Leaf was there on price years ago.

zzzzzzzzzz

Average new mid-size car in the US is $25,502 before incentives. Much less in the whole world that tends to buy smaller cars.
https://mediaroom.kbb.com/2018-10-02-Average-New-Car-Prices-Rise-2-Percent-Year-Over-Year-According-to-Kelley-Blue-Book

You need to be completely out of touch with reality to claim that $50k-$60k mid size car is mass market. It is well above $42k “Entry-level Luxury Car” that was initial ASP goal.

Back on Earth, median US household income is around $60k (and it still would be a fortune for median household worldwide), and it is likely to need more than 1 car to get to work or school, pay taxes, mortgage, food and astronomical healthcare costs.

jzvm

The Nissan Leaf is E29,700 in France and $29,990 in the US, so the cost of the Niro EV in the US may be closer to $42.5k if there are no new import tariffs for Korea. That would still be very expensive, given the Niro ICE starts at $23,490 in the US and at E27,450 in France. The EV usually has features more comparable to the higher end models though.

Andy

Basically we need EVs to come down in price by around 30-40% before they become equivalent at the forecourt price in the mainstream market (as shown by the Neo, Niro, Leaf vs their ICE equivalents). Equally we know that with lower running costs once bought some of that can absorbed into the longer term cost of ownership, but for the average person that probably still means a a reduction in price or around 20% at a minimum.

Equally we could argue that currently a EV drivetrain costs around $10-15k more than equivalent ICE drivetrain, although that cost probably reflects, in part, the R&D of the EV drivetrain.

Sz

You can’t teach an old dog new tricks. At least not many. They will need to find people that can think and learn beyond just past experiences or become a bit player in the future.

rgeniec

The pie chart says it all. A picture is worth 1,000 words..

Chris S

They inserted a slice in the wrong pie.

Will

Mmm…. mixed berry pie.

John-EU

Typical german point of view: we have been making cars in this way for one hundred years, why should we start doing it differently. Like the beer they produce: since 500 years (the beer law was introduced) they are producing the same stuff.

REXisKing

LOL. Their beer is the best in the world.
And it restricts use of High-fing-fructose-corn syrup, so, you need a much better example.
They don’t sell Bud. Bud gives you diabetes.
You need a better example.

And as for cars, Tesla did copy the 3 series specs.
And Tesla didn’t put in some cheap rear suspension in their cars, like many EV and Volt makers did.

John-EU

For beer, you head for Belgium. Sorry guys, but (almost) everybody knows that.

MaartenV NL

The best special beer taste is Belgium.
The best drinking experience is German.
My head tells me the next morning.

Marshal G

There is no better beer than German. No need to change or adapt with the times.

Pushmi-Pullyu

WOW is that a poor analogy!

If Germans perfected beer centuries ago, why would they need to fiddle with it? “If it ain’t broke, don’t fix it!”

Automobiles, on the other hand… not so much.

Larry4pyro

So if 90-100 KWH battery packs are too expensive, why not use a small battery like the 22 KWH used in original i3 coupled with a 90-100 KW range extender to make it a serial hybrid? The 1.5 l turbo three cylinder used in the i8 would be a good choice. Abandon the crazy i3 design and instead kick in the rex at a high enough SOC to be able to maintain the same driving characteristics regardless of the power source. Oh and increase the size of the tax tank to support untethered range of at least 400 miles.

REXisKing

The i3 is a great drive, but BMW isn’t selling many.
Maybe VW could and should do this.

Will

I think they will. VW is the only group doing what they need to do to survive. They might be a good investment as it will be five years before Tesla shows up in Europe in large numbers and they have time to get their feet under them.

MaartenV NL

Target:
VWAG – 1 million BEV in 2025.
RNM-Alliance – 1,4 million BEV in 2022.

Best track record, RNM-Alliance. The numbers are for world-wide sales by the whole group.

antrik

Nope, VW is talking about 3 million for the whole group. (Possibly including PHEV, though?… Don’t remember for sure.) 1 million is for the ID. family alone.

Model3 Owned- Spark Leased - Niro EV TBD

You should try the Model 3. You won’t be eager to step back into the i3.

Mir

I did. Ride was comparable (I do like the i3 interior and turn radius more, the Tesla felt a bit faster and less twitchy in high winds) but the i3 had incentives that made it 15k cheaper, and was immediately available. 38k US for a 53k sticker price 2018 model before you count in the tax rebates! Made picking the i3 over a model 3 an easy choice for me.

zzzzzzzzzz

Small battery cars with or without range extenders are available worldwide for several years already. Unfortunately they didn’t find popularity, despite high hopes when Nissan’s Ghosn was talking about million per year sales years ago and building their own battery “gigafactory” to support it. It sounded fascinating at that time.
https://www.nbcnews.com/businessmain/nissan-renault-wont-make-electric-vehicle-goals-ceo-2D11577487

Now we got oversized battery idea. Yes it helps with popularity, but it starts to defeat the environmental purpose of EV, as big battery production creates as similar amount of cradle to grave emissions as modest size ICE car. And it costs much more – that is what this article is about.

antrik

The original Leaf didn’t sell, because it was way too expensive for what it offered. As costs fall, it becomes possible to sell EVs with smallish batteries at very attractive prices. the Leaf was basically just ahead of its time…

Get Real

More BS from zzzz, a proven anti-EV, and especially anti-Tesla shill for the hydrogen hoax.

groingo

Then do like any logical auto maker would do, build a more efficient electric car that goes farther using smaller batteries and start using multi speed transmissions that could improve range by 20% or more, the transmission makers have already run the numbers and built proof of concept, it’s not rocket science!

Will

Electric motors are different. An electric motor designed correctly does not benefit from a multi gear transmissions. It only helps if you use an off the shelf motor in an inappropriate application. Otherwise it just adds weight and complexity.

BEVfan

Hooooo, calm down people. This article is made by Tesla accesory maker. It even says that above so don’t blow up and don’t believe everything on internet.

Kbm3

Ok. Just show that the writer misquoted, and we’ll be 100% on your side.

Pushmi-Pullyu

Chris already showed in his comment above that the Evannex writer took the dollar figures quoted badly out of context in a very misleading way. It’s fake news.

On the other hand, Mr. BMW’s claim that BEVs will never be as cheap to make as comparable gasmobiles… that’s equally wrong.

antrik

This article also links to the source article, which is equally damning (apart from the dollar confusion), although not written by a Tesla accessory maker…

John

It’s a nightmare for manufacturers who DON’T wanna transition to the inevitable. And while that delays the EV options for the public at large, it’s still a win for Tesla, allowing them to further their lead gap over the competition. Which is unwise, considering they’re ALL IN on the future.

islandboy
This is actually a lesson in disruption and if BMW is not careful, they may not survive past the first half of the next decade. How do I come to that conclusion? Six years ago Tesla started delivering the Model S, a task that the German manufacturers had repeatedly said could not be done. I cannot find it now but I remember back circa 2013 reading a review of the Model S by a German publication, in which the German author was asking, why the German companies could not have built this car. This board member shows exactly why. All of these companies that are being disrupted by Tesla, are starting with the premise that it can’t be done, despite the fact that it is being done. Elon Musk and Tesla, instead ask question as to how it might be done and are engaged in a constant search for ways to do things that others say, can’t be done. Look at the Tesla Semi. I have been berated in other forums for suggesting that heavy duty trucking could benefit from electrification, at least not for long distance trucking, yet we have the Tesla Semi set to enter the market next… Read more »
REXisKing

I was just going to say BMW CEO did acknowledge the Tesla threat. And that was a sign they’d survive, and then this.

Xcel

Article by Prof. Dr. Ferdinand Dudenhöffer… why Model S is superior and why Das Auto did not design and produce it… in German.

William

BMW obviously doesn’t want to commit to be a large stakeholder, or directly involved in the narrow margin battery manufacturing business.

The road to profits, in the battery dependent EV manufacturing segment, requires a significant commitment to volume battery production, and its associated hardware.

Otherwise, you’re going to be “crying a river”(BMW tears), when your competitors and other specialty EV manufacturers, figure out the battery cost work arounds, on how to get closer and closer to ICE cost parity, with EV production.

The overall cost benefits, including the enhanced user experience of EVs, over the first five years, of the premium/luxury segment, is where BMW is losing some of their high end potential customers.

Undertaker

BMW is overpriced crap and has always been.

REXisKing

Wow. With that attitude I’d expect Jimmy Chanos to start SHORTING the Stock.

AzzyLand

It happens to Tesla too.
click thiscomment image
“Elon said..” .Well lets look at what he actually said
hmm what I see is: “we think” “probably” “maybe” “later” “depending”.

Which in my book means they aren’t anywhere _near_ $100/kwh on the cell level yet. And possibly are locked into a contract that fixes the price paid.

Model3 Owned- Niro EV TBD -Past-500e and Spark EV,

With the new assembly units coming online, they’ll improve efficiences x3 and production x3. That’s going to drive the costs down significantly. Hopefully will shake loose the bottleneck of Powerwall production.

AzzyLand

yeah when? Probably next 2 years

MaartenV NL

Q4-2018

MaartenV NL

That is lowering the assembly costs from above $20/kWh to below $10/kWh. That is important, but the big win will be in the anode and cathode production in the GF. At the moment the anode and cathode production is at their respective chemical companies plants.

antrik

This new machines are for pack assembly, unrelated to cell costs.

antrik

Your book is weird. If he is expecting the price to drop below $100 per kWh at cell level before year end, clearly they must be pretty close, and *not* locked into fixed price contracts.

SJC

Batteries cost, some talk about economies, automation has brought the curve along.

Xcel

Chanos and Lutz “know” better how the legacy guys can scale, this guy did not talk to them…. I wonder why ..

John Doe

So. . Due to the 10% yearly price drop for batteries – manufacturers may get a potential 10% profit increase for every year they wait. .
Which is good and all – but wait too long, and manufacturers will loose market share.
10% of nothing is nothing..

They must just start to produce, and make a profit when the market is more mature, in just a few years.

EVer

Nobody said switching over to efficient electric cars would be easy, especially when all the legacy makers have been building obsolete, polluting, sloppy mechanical junk for a hundred plus years. Looks like BMW is going to have to solve problems to stay in business. The battery economics problem is just one of many…And, No, whining won’t make us buy more ICE junk.

Bill Howland
Herr Frolich stating “Electric cars are a Nightmare” is overstating the case. Perhaps EV’s will always be a bit more expensive than ICE vehicles, but incentive programs and mass production are both minimizing the cost difference. I will, and people like me, will be always willing to pay somewhat more for a plug in vehicle, whether PHEV or full BEV. You are really getting a different car than a plain old ICE and I’m willing to pay a bit of a premium for one. Most areas of the USA enjoy fuel savings over time, so even this cost difference may be eventually be made up….. Even replacement batteries shouldn’t be more than the typical overhaul or transmission change out that happens with an ICE car so that expense doesn’t really count either. Even reliable GM cars tend to need new transmissions or engine work after 100,000 miles, so in the particular case of the VOLTS or ELR, since the wear is ‘divided’ between the battery and the engine, the car seemingly can go several hundreds of thousands of miles, before requiring replacement of either. Not sure about the GEN2, but the old GEN1 Planetary gearboxes were expressly designed to have… Read more »
Wmshawk

EV OWNERS ARE OPINIONATED ABOUT MANY THINGS JUST LIKE OTHERS WITH VARIOUS POLITICAL VIEWS. That doesn’t mean they are right. Those of us who live in CA and own EVs (I loved my BMW i3 and love my Chevy Bolt) have a completely biased view that, I believe, will never transfer widely in the USA. The BMW guy has a view based on real understanding of the topic. Doubt anyone else responding has that.

Bill Howland

Well, you are entitled to your opinion…. But that BMW guy ain’t exactly the Oracle at Delphi.

Bill Howland
Just to put a bit of a sharper Point on it – I believe GM and Ford (for all I criticize them for being sluggish to release new PHEVs or BEVs), are basically doing it right to judge marketability and acceptance by the USA nationwide. They are releasing relatively low cost, very practical and serviceable vehicles (tolerating all the Ugly Duckling Jokes about the Bolt ev). People come up to me all the time and ask many questions about the bolt in particular and EVs in general… I ask, will this be your first electrified product? Ans: Yes. Are you going to ease the transition by purchasing a VOLT first? Ans: NO! I like the look of the BOLT and I want a full BEV from the very start. I’ve had this exact conversation with many average people. They are pleasantly surprised when I tell them there is no “PREP” needed for the garage immediately, if you are not a high-mileage driver. The wall outlet in the garage or car port will get you many miles, and there are public docking stations at markets that ‘help’ recover range faster should you run a bit short. If you want much faster… Read more »
antrik

This guy is talking obvious nonsense, probably for political reasons. You don’t have to be an EV owner to acknowledge that battery costs are dropping, fast.

Joe

Renault does not seam to have the same view. They believe it will come close to ICE PRICE (with a normal size battery (not a 100kWh 🙂 in 2020 (with subsidies)

amt

Price Equals ICE Price…And They Do…Big Auto will never Admit To That ..Because They Want The Parts, Maintenance & Service Business After The Sale..Remember ICE = 2000 Moving Parts ..EV = 200 Moving Parts.. _

TJKR

Oh well! If you can’t make them cost effective that clearly you are doing something wrong. I have no sympathy for BMW. They deserve to go out of business.

Jon Aarbakke

How about putting a charging rail in the road like the Swedes are thinking about? If all main roads provide this, the battery pack can shrink to 30KWH for the vast majority of scenarios. In any case, the ICE is not here for the long term.

antrik

Probably not worthwhile… By the time such infrastructure would be deployed at a larger scale, batteries are likely to be so cheap that it won’t really matter.

Alan Campbell
Here is what Tesla had to say about battery cell costs: “We think at the cell level probably we can do better than $100/kWh maybe later this year … depending upon [stable] commodity prices…. [W]ith further improvements to the cell chemistry, the production process, and more vertical integration on the cell side, for example, integrating the production of cathode and anode materials at the Gigafactory, and improved design of the module and pack, we think long-term we can get below $100/kWh at the pack level. Which is really the key figure of merit for a car. But long-term meaning definitely less than 2 years.” With the 200+ mile range Model 3 having a 50kWh pack, That puts it at less than $5,000 at volume. Now remove all the labor necessary to install the additional 5,000+ additional parts for an ICE car, and add the highly efficient robots necessary to build the EV. Next, remove the HUGE expense of engineering and emissions testing of engines and associated components for every new model. VW and Ford both made this one point very clear, and that is switching to BEVs is much cheaper to design and build, along with cheaper and easier to… Read more »
antrik

AIUI, carbon fibre was considered a viable choice for the i3 *because* it was supposed to be low-volume…

Lee Ramer

Yep, reusable rockets are also not worth it either. This guy should be fired!

JohnR

Lifelong BMW fan here till this year. Dumped my X5 M for MX and my 650i convertible for MS. Sick of the high cost for everything. Too many moving parts in ICE cars, stuff breaks down constantly. Evap systems, brakes, cooling system, ac, electrical, sunroof, convertible top, engine coils, block issues and transfer case safe moves lol, name it and it’s happened to me. The cars shelf life is about 100k miles if you’re lucky. 100k car for 100k miles 1$ per mile. Plus gas and maintenances etc

super390
While gas apologists operate out of a data-free universe of truthiness, we can actually figure out what needs to be done to create an inexpensive EV by using online energy-use calculators, and a little history. The Solectria Sunrise and GM EV1 were able to cruise at about 50 mph using only around 120 watt-hours/mile. We could make a car more aerodynamic and lighter than those thanks to modern li-ion batteries, but it means an unusual size and shape. This is relevant because the gas apologists compare EVs to tiny 4-cylinder or even 3-cylinder econoboxes that cost under $15,000. But Americans won’t touch those cars, and Europeans buy them because they’re willing to adapt to cut their costs of up to $9 a gallon of gas. Adaptation means buying a vehicle that is different than what you ideally would. What I’m proposing is combining a scaled-down Ford Probe V concept car (claimed 0.137 cD) with electric power, which will improve on that cD by eliminating intakes and exhausts. Goal: 2000 lbs weight, energy consumption at 60 mph under 100 wh/mile, total range of only 150 miles, and limited back seat room as was common in small coupes back in the 1970s.… Read more »
Andy

Unfortunately people aren’t willing to change unless they’re forced to – see all the the people buying big EV sedans, when most don’t need anything of that size.

On the other hand a lot of people need bigger vehicles (whether they be legs hatchbacks, SUVs or Pickups – I don’t include sedans as they’re more a compromise aimed at those that don’t want a hatchback). For those people a small, low CD vehicle is not going to work, especially those that attach things to their tow hook or on their roofs.

Milfan

A 100 KWh battery pack should cost only $15,000 @ $150/KWh and not between $17,000 – $25,000.
If he is quoting such high price, then they are not procuring from right source or they are not buying in higher volumes.
No wonder Tesla is building a gigafactory.
What if Tesla brings the price of battery down to $100 / KWh. Then the battery price comes to only $10,000 and with the electric components being $3,000 lower than ice components, the net extra cost is just $7,000. We can get this extra over a period of few years.

Cypress

Shouldn’t be too happy about BMW drivers going over to Tesla. BMW owners are voted the the rudest @holes on the road.

Ahhh,…that explains why some of the Tesla extremist are such jerks.

Rolando

I can only comment on the status/perception of BMW drivers on the German Autobahn — and yes at least there, most
BMW drivers are indeed known for very rude pushy behavior ……

arne-nl

This can be filed with the ‘expert’ opinions that solar PV would NEVER be competitive with fossil fuels.

viriato

The truth is that BMW or Audi doesn’t care so much about Tesla Model 3 sales, when they sold last year 2-3 million cars in the world and earn profits from decades and they are gonna earn money in the future and are developing a solid range of EVs, while still will sell very profitable ICEs for years.

Dima

This is quite a tabloidy and one-sided article.

Richard

Wow ! BMW are totally stuffed.

rey

All legacy auto profits are tied to the maintenance of their ICE drivetrains and support of their STEALERSHIPS, how does one cut that vicious circle ?

Haggy
A car in this class doesn’t need a 100 kWh battery. The Model 3 has a 310 mile rated range, but the real world range is much bigger. I can take a 400 mile trip with a 12 minute charging stop, and that’s about as much as I’d ever drive in a day without stopping for the night. At the $100 per kWh price that manufacturers are approaching, BMW should be looking at $7500 for batteries, not $25,000. Even with my Model 3 with initially available options, even if I don’t factor in tax benefits, a BMW 3 series for the same price gives me less. If I factor in tax credits, a Model 3 is a bargain, but even without them, operational costs over the useful life of the car are going to save a lot of money. I could easily be spending an extra $20,000 or more in fuel costs over the useful life of a BMW, above what I’d spend for electricity. As I and many others have posted elsewhere, there were times that Tesla service was backed up and didn’t have enough loaners, so they gave people BMW 4 series cars as loaners. I can’t imagine… Read more »
Gordian Hense

Please see the video in this article (video is in english) an you will be surprised about battery – costs vor EVs in future: https://www.outview.ch/aktuelle-news/disruptive-technologien-werden-schneller-die-welt-veraendern-als-gedacht-gas-oel-mobilitaet-transport/