BMW’s surprise electric-car success started with an early setback
For German luxury-car makers, being first to fail is proving valuable when it comes to electric vehicles. After a bruising initial crack at bringing EVs to market, BMW AG is lapping its rivals.
In 2008, BMW engineers set out to develop an electric city car from scratch. Five years later, the company introduced the i3, a quirky four-seater with rear-hinged back doors and a frame made with carbon fiber. The car looked unlike anything else in its portfolio, but with its steep sticker price and limited range, sales were muted. Disillusioned, BMW slowed its EV plans.
Years spent soul-searching led to criticism that BMW was stalling on EVs. Lately, though, the company has been hitting the right notes with a much less radical approach. It designed EVs almost indistinguishable from their combustion enginepowered siblings, and is building them on the same factory line to contain costs.
The approach is paying dividends: BMW shipped more than twice as many EVs than Audi in the first quarter, and roughly two-thirds more than
Mercedes-Benz Group AG.
“BMW has been able to adapt its over one decade worth of battery-electric vehicle knowledge into its current model lineup with almost zero handicap,” said Matthias Schmidt, an independent auto analyst near Hamburg. “They have carried the Ultimate Driving Machine mantra over to their EVs.”
BMW’s success is all the more impressive since it coincides with a broader slowdown in demand for EVs, particularly in Europe, where governments are reducing subsidies. Mercedes cited the phase-out of its Smart Fortwo two-seater and sluggish demand in Germany for falling EV wholesales in the first quarter. Earlier this month, Tesla Inc. reported its first year-on-year global sales drop since 2020.
Some of BMW’s head start has to do with its rivals veering off course. Volkswagen AG’s Audi has been falling behind in China, its biggest market, after failing to offer models that cater to local tastes. Software issues delayed one of its key battery models, the mid-size Q6 e-tron SUV, by two years.
Mercedes’s push further upmarket has been complicated by poor uptake of its topend electric model, the €110,000 ($117,000) EQS sedan, which has been criticized for its low-slung roofline that crimps head- and legroom in the back. That’s a no-go, especially in China, where many buyers prefer to be chauffeured. The manufacturer slashed the price of the EQS and has unveiled a redesigned version with more spacious “executive” rear seating, but the update won’t reach customers in China until the fourth quarter.
BMW’s EV lineup is fresher and more attractive, said Metzler analyst Pal Skirta. It ranges from the compact iX1 SUV to the i7 luxury sedan, which comes with options including massage seats and a large video screen that folds down from the ceiling. BMW is facing intense competition in China, where local automakers including BYD Co. are pushing into the luxury segment. In Europe, BMW is offering the steepest rebates for premium EVs, as per Bloomberg Intelligence analyst Michael Dean.
The company has now designed EVs almost indistinguishable from combustion engine-powered siblings