Report: BMW i3 Production 50% Below Expectations – Carbon Fiber To Blame?

FEB 20 2014 BY JAY COLE 17

BMW i3 Production Is Apparently Ramping A Little Slower Than Expected

BMW i3 Production Is Apparently Ramping A Little Slower Than Expected

Like all plug-in cars when they debut, ramping up production to fill initial demand takes some time.  Apparently, BMW is experiencing some extraordinary difficulties meeting even their own expectations.

BMW Carbon Fiber Production to be Doubled

BMW Carbon Fiber Production to be Doubled

A recent report noted that BMW and SGL will invest more than $130 million dollars to double carbon fiber production at two manufacturing sites (one in Moses Lake, Washington) to fill the future demand for the i3, i8 and upcoming new 7 series.

However, Manager Magazin Online now says that BMW i3 production has been running well behind schedule – by upwards of 50%, and that there is a high failure rate in the specialized carbon fiber parts, which leads one to believe this new investment also involves solving this issue.

“Especially with the carbon parts there is further a very high error rate.  In addition, suppliers report, BMW take so far only good from half the amount actually ordered.” (original quote in German)

BMW has more than 11,000 customers currently waiting on i3 deliveries, with backlogs in Europe into September – while Manager says BMW currently only produces on average about 70 i3s per day.

Manager Magazin Online, (hat tip to Jens)

Categories: BMW

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17 Comments on "Report: BMW i3 Production 50% Below Expectations – Carbon Fiber To Blame?"

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Mike I

This report implies that the total average yield of the carbon parts is 50%. That is very serious. It doubles the net cost of those parts. I don’t see how BMW could even enter production without proving the production yield of their manufacturing process.

Dr. Kenneth Noisewater

If the material is substandard, doesn’t the supplier eat the cost?

There’d still be production delays, but it doesn’t sound expensive to BMW, at least until it comes time to renegotiate contracts.

Nix

The supplier just passes those costs back to you the next contract cycle with higher prices. The cost of waste always has to eventually come out of the pocket of the end buyer, as it is a passed-on cost.

Dr. Kenneth Noisewater

This assumes they have pricing power. I guess it remains to be seen how much pricing power they have!

Nick

Well, they have to either pass the cost on, or close their doors.

Right?

Mike I

There’s almost no way the raw fiber from SGL has any issues. The problem is how to mold it into a finished part. That is all on BMW, not a supplier. We have seen in the videos BMW released that they are taking in raw fiber and molding finished parts in-house.

DocDragon

Those are exactly my thoughts as well. Optical devices and X-ray machines for quality control are standard in a lot of industries (such as the pharma or computer industries). I cannot imagine that BMW didn’t do its due diligence before entering a multi-million dollar contract with SGL.

I really think it’s the lack of experience with carbon fiber as a new material that gives BMW grey hair. This reminds me of Audi’s initial challenges when the company switched from steel to aluminum.

James M

BMW is their own supplier of CFRP, they own the plant at Moses Lake. So BMW is swallowing the 50% failures.

MDEV

Ask Boeing how difficult is to run the production of Carbon Fiber production line. Perhaps Plastic carbon reinforced is easier to work with though

Gibber

And here I thought they consumed the supply building all those bobsleds…..

GeorgeS

Yeh what’s with that. They make a light sled, then fill it with humans of high body mass. The start must have something to do with it.

KenZ

Whatever the issue, assuming it is with the CF parts, this is exactly why the i3 was the perfect car for them to do this on: a low volume car, with a highly evangelical/forgiving consumer, and a known high price that can absorb some of these issues. All this reduces the effect of the issues on BMW as a company (low volume and all), and they must be learning a TON about how to do production CF in cars, which they can then carry over to their other high volume lines with confidence in a year or two after they’ve worked out the bugs. The i3 really was the perfect car to do this on. Brilliant.

GeorgeS

Good point. Perhaps GM can use Gen 2 Volt as a test bed for their recently announced move to an all aluminum pick up.

pjwood

With truth to EV margins being lower than the same old business model, why not risk carbon slowing things down? That said, I’m thinking that while most of us have become familiar with carbon sports equipment and other smaller items, its use in major stuff like windmills and airplanes is relartively new.

Yiiikes

Actually it is just the opposite. The aerospace industry invented and pioneered the use of carbon fiber. Ford aerospace was using carbon fiber in the early 80s. It was the only industry that could justify the high cost of the material for the return on performance.

It was a long while before the cost came down enough for the technology to trickle-down into other industries. Formula One racing was next to adopt the expensive material.

Other racing series soon followed and eventually it made its way into bicycles, then golf clubs etc.

70 per day would still be 1500 per month, where are they all? New registrations in Europe didn’t even add up to 1000 per month.

AC

Or this is a nice way to balance low demand to your supply chain…. Just a thought.