BMW Going All-Electric

By Michael McDonald for

The age of electric vehicles may finally be upon us – or at least that’s what BMW is banking on. BMW recently announced that it will convert all models to electric drive trains, range-extending engines, and plug-in hybrids over the next decade in response to a coming series of strict EU carbon emissions laws. The company’s 3 Series sport sedans will even become plug-ins. The transition is a dramatic statement from one of the world’s most recognized and well-regarded car brands.

The change would also be a huge shift for the firm. BMW introduced the first of its eco-friendly alternative fuel i-series vehicles last year. That car, while well received by electric vehicle standards, sold less than 18,000 units worldwide in 2014. That made it the 4th best-selling EV in the U.S. region. The fact that the car is considered a success while selling so few units, shows just how far the world has to go to truly embrace EVs.

In fact, electric vehicles have consistently fallen well short of many proponents’ ambitions. For instance in 2008, then Senator Barack Obama set a lofty goal – seeing the U.S. field one million EVs by 2015. That didn’t happen. As of mid-2014, the total number of EVs on the road sat just below 200,000. Research consulting firm Navigant does not foresee having 1 million vehicles on the road until beyond 2025 (when its current forecasts end). Even that figure of 1 million vehicles would be a sliver of the total vehicle market.

Time will tell what effect BMW’s move to an electric focus will have, but at this stage EVs still appear very much in their infancy, and if BMW’s change goes through as advertised it could represent a seismic shift in the market. BMW is pushing forward with other electric initiatives including its first all-electric tractor trailer. Germany has not been a major EV market in the past, but this move could change the situation going forward.

One question that BMW’s announcement raises though, is what effect a known brand name going all electric will have on the market? It’s possible that BMWs will prove to be supremely attractive electric vehicles and the announcement will jump start that market. That seems unlikely though given the limited demand for the company’s existing EVs. What’s more plausible is that consumers may, in effect, be forced to buy an EV if they want a BMW. It is also possible that BMW’s move will spur other car makers to follow suit.

The fundamental problem with EVs so far seems to be that consumers simply do not want the product in many cases. The electric tractor trailer highlights one of the major reasons for that lack of interest from consumers – limited vehicle range. The BMW all electric tractor trailer has a range of roughly 62 miles per charge for instance. That is so limited that the truck will only be useful for around-town trips.

Of course, EV ranges are rising slowly especially as vehicle weights come down, and BMW has years to improve the product. Nonetheless, it’s not clear that consumers want what EU regulations are going to force them to take. Thus, if the age of the internal combustion engine really is coming to an end, it may be driven as much by stringent regulation as by genuine shifts in consumer preferences.

This article was originally published on

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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