BMW's i3 Won't Outperform Tesla's Model S, but It Still Offers Luxury-Brand Service

With a range of 80 to 100 miles on a charge, acceleration from zero to 60 miles per hour in seven seconds flat, and a base-model price of $41,350, it seems that the BMW i3 (ETR:BMW), revealed on July 29, hopes to find the sweet spot for electric vehicles, positioning itself between the Nissan Leaf (OTCMKTS:NSANY) and Tesla Model S ( TSLA ).

Set to go on sale in November, the i3's range places it in company with the Leaf, which can go 75 miles without a charge. Though the i3 trumps the Leaf by a small margin, BMW is clearly targeting the urban and commuting population, whereas the Model S, with its base range of 208 miles, lends itself more to the needs of the vacationing crowd. For $45,200, however, a range-extending, 36-horsepower petrol engine is added to the i3, enabling the vehicle to travel 160 to 186 miles.

Additionally, to ease concerns over the limited range of the i3, BMW is offering BMW Access to i3 drivers, which enables them to borrow other BMW or Mini vehicles for a certain number of days annually. This is just one feature of BMW's "360° Electric" ownership package, which also covers charging and service fees at a cost of $61 to $122 per month, depending on which specific package -- Pulse, Charge, Spark, or Energy -- the owner selects.

A price tag of over $40,000 means that the i3 isn't exactly a car for everyone. This number is still far below that of the Model S's bare-bones base model price of $62,400, but it's nearly double that of the Leaf's $21,300 base cost. When federal and state tax credits are accounted for, as Nissan and Tesla do in their pricing, the i3's price should drop into the lower to mid $30,000 range, making it significantly more reasonable and in line with non-electric BMW 3 models.

Given BMW's traditionally luxury branding, it's no surprise that its elevated base price includes a unique navigation system, something that the Leaf's starter model doesn't offer. BMW i Navigation is designed specifically for electric vehicles, accounting for battery power, driving style, traffic, and road topography when determining a route, and directs the driver to a public charging station when necessary. Alternative, potentially faster transit options, like a train, may also be suggested by i Navigation, which can direct drivers to a parking location near a train station. This further signals that BMW is setting its sights squarely on the on-the-go commuter.

The BMW i Remote App for iOS ( AAPL ) and Android ( GOOG ) also enables i3 owners to control the climate in their cars, locate their vehicles, keep track of remaining range, and receive service notifications.

Furthermore, a BMW i Wallbox can be installed at a user's home and can charge the battery to 80% capacity in under six hours. A regular outlet will take eight to 10 hours to charge the vehicle.

With its established brand name and middle-of-the-road approach to the electric vehicle market, BMW could potentially have a winner on its hands with the i3, a result that could signify the beginning of the age of electric cars. And if the future is electric, BMW is prepared to offer top-of-the-line vehicles as well: Its i8 petrol-electric hybrid supercar is set to debut at the Frankfurt Motor Show this September before going on sale prior to the end of the calendar year at an estimated price of £150,000, over $228,000, in UK markets.

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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