BMW Versus Tesla – Two Different Approaches To EVs Right Now, But Head-To-Head Battle Is Inevitable

AUG 8 2014 BY TOM MOLOUGHNEY 31

BMW & Tesla

BMW & Tesla

Horatiu Boeriu of BMWBLOG recently did a piece titled “BMW vs. Tesla – Which Company Is A Bigger Innovator?” in which he mentions that while both companies are competing in the premium automobile segment and are committed to electric mobility, they are taking different paths to achieve success.

BMW & Tesla

BMW & Tesla

I’m not going to try to analyze who has it right or who is a bigger innovator, but it’s clear that both companies have chosen to focus on different aspects of their respective vehicles.

With Tesla, it’s all about the batteries. Unlike every other automobile manufacturer, BMW included, Tesla’s approach isn’t for their electric cars to complement their lineup of gasoline and diesel offerings since they don’t have any. Instead, it is to render gasoline vehicles from their competitors obsolete. In order to do so, their cars have to be at least as good or better than most features of competing gas cars; and that includes range, performance and utility.

BMW on the other hand doesn’t need to necessarily worry about making everything better. They can focus on specific needs of certain customers and make a vehicle that is better than any other at a specific set of tasks, without cannibalizing sales of other vehicles in their lineup. If you accept that premise, it’s not difficult to understand why we have the Model S and the BMW i3.

*Editor’s Note: This post appears on Tom’s blog.  Check it out here.

BMW & Tesla

BMW & Tesla

Tesla knew they had to knock it out of the park with their first high volume vehicle offering. They knew they had to offer a car that could stand its ground against all of the top luxury sedans while offering a range long enough to allow for road trips enabled by the Supercharger network. Even though that was an enormous task, and one that few automotive analysts really believed they would pull off, they did just that and the Model S is a smashing success.

No disrespect to the sexy styling or the fabulous performance of Model S, but the heart and soul of what the car is can be attributed to the enormous battery pack it uses, filled with industry leading, high energy-density batteries. Tesla is all about the batteries. Even though the Model S uses batteries that have a higher energy density than any other EV manufacturer, they still aren’t satisfied. They aren’t waiting for the market to bring them better, cheaper cells for their future cars. Instead they are in the process of building what will be the first of many Gigafactories, which will be the largest lithium ion battery manufacturing plants in the world. This will drive down costs, guarantee that they have the supply that they need, and allow them to constantly upgrade to better cells without needing to wait for battery manufacturers to retool production facilities to produce them.

The key to Tesla’s success is having the best batteries available, and to manufacture them for less than what their competitors are paying for comparable cells. It’s the only way to offer large battery, long range electric vehicles and be able to price them competitively. It’s Tesla’s edge, and perhaps their only hope to compete and actually beat the large, established automakers.

BMW & Tesla - Not Tom's Tesla

BMW & Tesla – Not Tom’s Tesla

BMW’s not in the battery business and is unlikely to follow Tesla’s path as such. As mentioned above, since they didn’t need the i3 to do everything better than any other gas offering as the Model S had to, BMW could focus on a specific set of goals with their first electric vehicle. The i3’s code name was the Megacity Vehicle and the goal was to develop a car that would be the perfect electric vehicle for the increasing populations within the megacities of the world.

BMW also wanted this car to represent a departure from traditional manufacturing processes with an emphasis on sustainability. They set out to make the most efficient production car available today and they achieved that goal. The extensive use of carbon fiber reinforced plastic and aluminum allowed BMW to shave 400 to 500 lbs off the car which played a primary role in its efficiency.

Will BMW leave Tesla in their rear view camera? Seems unlikely at present.

Will BMW leave Tesla in their rear view camera? Seems unlikely at present.

I believe the i3 is as much of a learning experience for BMW as it is their first electric vehicle. Every step of the manufacturing process was rethought and redesigned for the i3. In fact, the i3 uses 70% less water and 50% less electricity to manufacture than a comparable-sized conventional BMW would.

In addition, the Leipzig manufacturing plant where the i3 is made is now completely powered by wind-generated energy. So as much as the i3 is an important vehicle to BMW today, the lessons learned bringing it to market today will pay dividends when future i cars are made. The i3 indeed paved the way for the rumored i5 and other models from the i brand.

You can expect larger battery, longer range electric cars from BMW i in the not-so-distant future. I suspect by the time Tesla releases the Model III, BMW will have an electric offering which is comparable size, range and price, and that will be good news for the consumer.

My i3 had a visit by its big brother. I'm one of the few lucky people outside of some select journalists who have driven an i8 on public roads. The future is definitely looking electric!

My i3 had a visit by its big brother. I’m one of the few lucky people outside of some select journalists who have driven an i8 on public roads. The future is definitely looking electric!

BMW knows that by focusing on a specific set of needs (efficiency, performance, sustainability) rather than long range, the i3 isn’t as well suited for road trips as the Model S. They knew that every kWh of battery that they added would sacrifice efficiency and increase the cost of the car. I still maintain that if BMW had indeed used a slightly larger battery and delivered a true 100-mile EV, it would have been much better received, but that’s a pointless argument now.

While it does have a shorter range, the i3 does have features that are not even available in the Model S, such as adaptive cruise control, collision avoidance with automatic braking and self parking. As you would expect from BMW, the i3 is an extremely fun car to drive, and a great addition to the current lineup of EV offerings. I think it fits in well situated directly between the Model S and the LEAF in price.

My i3 At Home

My i3 At Home

BMW did realize some customers would want a longer range so they offered the range extender as an option. It’s really a great option to have and while I personally like how well it works, it isn’t for everybody. Many have argued that the REx ruins the purity of an EV, and while I can agree with that, I can’t agree that it shouldn’t be an option. If such a feature allows more people to buy a plug in car, then I think that’s great. I see the range extender as a temporary fix until batteries get better, lighter and cheaper, but a necessary evil at present.

Obviously, BMW agrees with that and unlike Tesla, they will wait for the market to bring them improved battery tech while Tesla has decided to bring improved battery tech to the market. Different approaches, different cars and I don’t think either is right or wrong. They are both working on bringing cutting edge technology to market today with the promise of even better things to come. BMW and Tesla aren’t going head to head in the EV space right now, but they certainly will. Competition is good because it forces innovation. Maybe Horatiu was onto something after all.

BMW and Tesla going nose to nose in the premium electric vehicle market is inevitable.

BMW and Tesla going nose to nose in the premium electric vehicle market is inevitable.

One last point: If Nissan does deliver on the rumors that the next generation, 2016 LEAF will have a 150+ mile range, and they can deliver it for a reasonable price, then both Tesla and BMW should be concerned, very concerned…

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31 Comments on "BMW Versus Tesla – Two Different Approaches To EVs Right Now, But Head-To-Head Battle Is Inevitable"

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Great insight.

BMW could easily offer a BMW i3 2x .. 44 kWh battery pack, about the same packaging and performance compromise as the REX model, ~150 miles of range.

Cost would be higher than the REX model – perhaps by $5000. If Tesla is any illustration people are willing to pay for range.

However, as Model S vs Roadster has shown us, significant range absent a high-powered charging network is only so useful.

Perhaps BMW will support the growth of a higher-power CCS network before releasing a higher-capacity i3. i3 22 kWh can charge at 50 kW, so i3 2x should be able to maximize CCS at 100 kW.

My guess is that battery supply is the limiting factor right now in the case of a bigger battery (carbon is another story). Why should BMW build fewer cars with a bigger battery, if they sell every car they can produce right now (thats the case at least in Europe).

You just made my point for me. I think BMW has the right recipe with the i3 Rex. The only thing missing is a slightly larger gas tank, maybe 3 gallons. (of course we all know why it was designed that way so no point in arguing about it)

As you said, the larger range would be more expensive than the combination of the existing battery and the Rex. So the way I see it, you are paying a huge premium for a battery that you’ll rarely ever use. On the other hand, a $3,800 range extender is there to solve that problem. With 80-ish miles of battery only range, I would imagine most people would rarely need the Rex.

“BMW could easily offer a BMW i3 2x .. 44 kWh battery pack, about the same packaging and performance compromise as the REX model, ~150 miles of range.”

No, they can’t. i3 is too small to hold a double sized battery.

Sure it’s possible in 3-4 years with a higher density battery pack and use of the REx space in the rear.

I wasn’t talking about some future tech. 3 years is not a lot of time to get there either.

2x and “easy” were optimistic.

The i3 22 kWh battery pack is divided into 8 modules:
http://designapplause.com/wp-content/xG58hlz9/2013/09/bmw13-i3-61.png
http://forococheselectricos.com/wp-content/uploads/2013/09/bmw-i3-bateria.jpg

Take a look at the gap for the generator unit here:
http://img1.xcarimg.com/news/7565/9323/20130802005332816254.jpg

Just eyeballing the space, I guess four modules could fit where the gas generator is installed. Two more modules could possibly fit where the fuel tank is installed in the front. I’m not sure there’s room under the rear seats for the remaining two modules, so it’s possible the hatch area would be compromised slightly.

More realistically, if BMW is waiting for 100 kW CCS stations to be developed to offer Supercharger-like travel speeds, they probably would take the time to redesign the battery pack.

I’m not a big fan of pigeon-holing tech, companies, etc., but I think this article really hits the main points. As much as I love the Model S, and the Roadster before it, there are “standard” luxury items missing, like adaptive cruise control (I think they said that will be available next model year – 2015). And, although their facilities are all LEED certified, I’m anxious to see Tesla do more with alternative energy (all the overhead views I’ve seen of the Fremont facility do not appear to have solar panels – I could be wrong). I do know that their paint, as well as the paint shop, is supposed to be much more sustainable than usual. I definitely like the carbon fiber development by BMW. That’s pretty slick. BMW is doing more than just about any major automaker to head toward more sustainable transportation (if GM had the foresight and guts to buy out VIA Motors and implement that tech throughout their large vehicles, then we’d have a new leader, in my option). I understand the logic, but I still think it’s a shame that BMW stuck with fewer batteries and a goofy appearance (IMHO)…nobody likes a copy-cat, but… Read more »

“BMWalso [sic] wanted this car to represent a departure from traditional manufacturing processes with an emphasis on sustainability.”

Like how the carbon fiber is produced in Washington state, sent by nasty, polluting boats to Germany, where it is assembled and then put on nasty, polluting boats back to their final destination, which could even be Washington state. Not sustainable.

That’s the nature of global industry at this point in time. Parts are manufactured everywhere, shipped to one or more centralized assembly plants, and then the final product is shipped everywhere, including places where some of the parts originated. There is very little sustainable about global supply chains.

Also carbon fibre is not easily recycled. Most efforts I’ve seen consist of downcycling, not recycling.

Aluminum, believe it or not, is actually more sustainable. It can be mined once, refined once (using clean power), used and then completely recycled. No nasty cancer-causing polyester resins are required either.

On the other hand, what volume of carbon emissions are produced by the shipping versus how much are saved by producing the carbon fiber using cheap clean hydro power in Washington State versus with the not all that clean electricity in Germany?

Unlike Tesla which ships batteries by nasty ships across the world and then ships the cars across the world again by nasty ships?

It’s true that the shipping business needs to get clean fuels. It’s getting better and better but it’s still far far from good.

Well, Tesla is going to cut the overseas shipping with the Gigafactory. BMW has no equivalent plan for the carbon fiber.

Having said that, I doubt the footprint of the carbon fiber shipments is substantial. My main concern is that it cannot be recycled, unlike aluminum.

Still, the i3 is a compelling car if your driving needs are met by the car. It’s quick and the interior is very cool, and obviously more affordable.

“I suspect by the time Tesla releases the Model III, BMW will have an electric offering which is comparable size, range and price, and that will be good news for the consumer.”

That would seem to imply that BMW will manage to procure batteries at a cost comparable to Tesla, or at least utilize their CFRP weight reductions to allow a somewhat smaller battery to cost the same as Tesla’s. If true that would be bad for Tesla.

And where will you charge this BMW EV? At very slow chargers. The tesla supercharger is the game changer in all of this. No other car company will be successful with long range EV’s until they figure their own network out or buy into the tesla supercharging network.

Fascinating to see that, in spite of the Fuel Cell push in CA by the CARB board, BMW, Tesla and Nissan are actually going ahead with development of newer, better EV’s and charging infrastructure. Sounds like a no-brainer, I know, to see it happening this way, but the US big boys appear to be dropping out of the EV race, leaving the market (and meaningful R&D) to a few. My guess is that those companies that not only invest in the EV technology(the VOLT is a pretty darn good car)but aggressively promote the adoption of EV’s(and don’t treat them like red headed step children)will be miles or years ahead of GM, Ford, Toyota,Fiat, etc. Focusing simply on gaming the system to accrue as many ZEV credits as the CA system will allow is going to come back and bite these companies in their butts(and eventually theirs wallet). When I see the competition developing between Tesla, BMW(maybe MB, too)and Nissan, I see some positives. Personally, I think it would be a smart move to work in a somewhat more cooperative manner…spreading the costs between the EV sellers should allow more developments, and at a faster pace, than strictly competing. It is… Read more »

One advantage Tesla has, over the other major car companies, is that it only makes electric cars.

Tesla is too damn perfect

BMW-heads on this site have a sort of Elite-Car-Status-Blindness ( or ECSB ). I’m going to check with my eye doctor to see if I can get these guys some help – really. i3 is made of molded plastic panels with two sides having a thin slice of carbon fiber ( made in my state of Washington ) glued on. This is NOT carbon fiber construction – it’s much cheaper to produce. This process is a good one for lighter body parts and will increase mpg on BMW’s infernally-combusted fleet of automobiles and CUVs. Now if this “amazing” process meant savings to you, the customer, I’d be all for it. What it does do – is save BMW money by letting them put SMALLER lithium battery packs into their EV-or PHEV products. So pass the savings on to Munich, not you – You still pay a very high price out of wallet to own basically an 70-80 mile electric car. So how does this benefit you? A BMW salesman told me an i3 buyer was buying “heritage” and “a premium brand”…. Did I buy that crock? Nope. Do you? He also said i3 was “quicker than a LEAF or Volt”.… Read more »

Mostly agree but quick off the line acceleration is a benefit to the EV buyer. Be it BMW or Tesla.

It makes merging,passing, and just getting through traffic easier.

Slamming the accelerator and hopping other cars slow down to allow you to merge is not a pleasant way to drive.

“Paying for heritage” is krap and if that is all they offer it will blow up in the face eventually. Perception takes about 15-20 years to catch up to reality in the automotive world.

An American Peugot executive once told me that they could get away with a 20% premium over an equivalent Honda/Toyota because Americans would pay the premium because the car was “French!”

Well, I don’t even know where to begin with this rant. Just a few remarks: – What is the appeal of the i3? For me the answer is quite simple: It’s fun to drive, is packed with cutting edge technology, and is the most efficient mass-produced car on the planet. Also, to my tastes, it looks a lot better than the current BEV competition with the sole exception of the Model S. – Price: BMW cars have never been cheap, and they did well regardless. I don’t know why you would expect their EV offerings to come at a discount price. – FWD: There will be 4 BMW models using the UKL platform in the near future: The Mini, the Active Tourer, the X1, and the X2. That’s it. Of course they will continue building RWD “ultimate driving machines”. And BTW, Mercedes Benz and Audi have offered FWD vehicles for a long time and it doesn’t seem to have damaged their brands in any way. – The reason to use FWD platforms is not MPG, but cost savings. I have no idea why you think that building some FWD models would in any way mean that their i-series engagement is… Read more »
Where to start on YOUR attack:….hmmm… You’re dead wrong about BMW’s UKL plans – do a websearch. Read Motor Trend. 1 Series coupe is headed our way – and in the 40 models BMW is planning for worldwide sales using UKL – no Minis were included in that number – I’m speaking BMW – I’m sure BMW has separate plans for FWD UKLs for Mini, but BMW is pushing for efficiency ( meaning gas mileage ) and cost savings to BMW…These FWD will be expensive in a marketplace full of FWD econo cars. By “fun to drive” do you mean i3 is more fun to drive than a Volt? A LEAF? If by “fun” you’re speaking “BMW-esque” for hard cornering and jackass driving on public roads – you fit in with the majority of other BMW drivers out there we know and do not love. I’m assuming you’re not an overly-aggressive driver with a head full of “ultimate driving machine” slogans and M3 track pounding articles running around your head…I’m cutting you slack and just thinking you’re mislead. What value…meaning $15-$25,000 more than LEAF or Volt is there in what you just stated? It’s just tossing money away upon a… Read more »
i3 is priced in-between Volt/Leaf/PIP/C-Max Energi and 60KWH Model S. i3’s with goodies are much closer to the Tesla than Volt and the others mentioned. Another way for me to get my point about the Tesla across to you ( besides being make in USA and all the goodness we all gain when you purchase American ) is that since you’re spending high zoot money on a car – you would be better off spending a little more and getting a revolutionary car like no other – the Tesla Model S. You don’t have to buy a P-85, right? Aesthetics are for the eye of the beholder. I don’t think i3 is attractive at all. I do like it’s interior – yet it only seats 4. I do like the i3 light-weighting such as the seats and aluminum substructure…But my point is that with that you get 50-80 miles electric depending upon model, temperature and load. HOW IS THAT “THE MOST EFFICIENT CAR ON THE MARKET”?!! With i3’s puny battery pack – you should mean, “The most efficient EV out there in making it’s manufacturer a profit”. You whiffed again on the battery size issue. Small battery and short range.… Read more »

Now let’s address your joust that Mercedes and Audi have already marketed FWD cars in America and BMW is just piling on. Well — OK…Yes, they are, and yes, BMW is. But who in heaven’s name considers FWD “high performance” or “premium”. Nobody! “Hot Hatches” carved out their own market…Cars like the VW GTi were AFFORDABLE with zest. A normal Joe could afford a high RPM, low cost driver that doubled as a toy because it provides more performance than a standard subcompact. Yet “Hot Hatches” still oversteer like crazy and don’t match even pedestrian RWD or AWD cars. Name me the major racing series where FWD is the norm.
F1? LeMans? European Touring Cars? Indy? NASCAR? NHRA?

As you said, economy is the justification for FWD, and as I said – BMW’s UKLs could only rival hot compacts like Honda Rs or GTIs. I don’t see a big hole in the market between those price points ready to be filled, do you? But those cars will help the Germans meet stricter mileage and Co2 mandates.

“If by “fun” you’re speaking “BMW-esque” for hard cornering and jackass driving on public roads – you fit in with the majority of other BMW drivers out there we know and do not love.”

Yes, James, Rant. look-it-up-in-the-encyclopedia-and-there-is-your-picture level Rant, followed by more, then more.

You have a rather insurmountable axe to grind with BMW and their owners, IMHO.

Wow. I think some BMW guy stole this James person’s girlfriend or something. 😉

BTW, fun fact regarding the “made in America” argument: BMW employs more people in the US than Tesla does (about 10,000 vs. 6,000). Not to mention the fact that all major car manufacturers have global supply chains these days, including Tesla.

Even a founder of this website agreed with me that BMW drivers are some of the pushiest, most aggressive on our roads. Evidently you are one of them. Not saying they all are – naturally, but many do buy into the “ultimate driving machine” jargon and think this means they bought a ticket to drive illegally.

BMW guys who actually know cars need to pipe up here. So far – these guys call me names and say I have a beef with an old girlfriend! LOL!

What they didn’t do is defend the i3 – The entire impetus of my arguments.

Maybe someone can at least try to address my points about the car and company, rather than toss personal insults my way.

Model X will kill / steal many i3 sales… Nuff said.

Humbly offer — the i3 has Never appeared to look as Weird as in the photo above, nose2nose with the MS.
I guess I am alone in my perception of the comedy, makes me think of a movie-poster or two, years ago (see also Young Frankenstein).

disclaimer, I was on order for an i3, I did not have this perception of the i3 prior to this photograph, if anyone cares.
but da-aamn..

I don’t know what they were thinking with the nose on that i3. BMW front profile is always beautiful but the nose on the i3 is just an abomination and I don’t understand why? It’s not like you need to worry about a radiator or combustion air intake on an EV, so the styling is 100% cosmetic.

That i8 looks insanely awesome though.

(currently own and drive a 550 with M package as well as a Model S p85+)