Auto industry BMW i3 electric car

Published on December 6th, 2016 | by Steve Hanley

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BMW Claims High Battery Costs Will Hamper Electric Car Sales For Years

December 6th, 2016 by  
 

BMW is none too optimistic about the electric car future. “We’ve learned that people aren’t prepared to pay a higher price for an electric vehicle,” BMW Chief Financial Officer Friedrich Eichiner told reporters in Lisbon last week. “I don’t see some kind of disruptive element coming from electric cars that would prompt sales to go up quickly in the next five to six years.”

BMW i3 electric car

Improving battery performance is key, Stefan Juraschek, vice president of electric powertrain development for the company told reporters at a briefing in Munich, “There’s a clear trend to bigger electric cars and longer driving ranges.” But his company sees no quick way to boost electric car profits. Instead, it expects battery capacity and costs will weigh on the technology for the foreseeable future. Juraschek says it will take about 7 years to double the amount of energy stored in a battery.“We simply have to walk through the valley of tears,” to figure out how to save more money on producing battery powered cars he told the press.

That hasn’t kept BMW’s rivals from investing heavily in electric car technology. Mercedes recently revealed it will invest $11 billion to bring 10 new electric cars to market in the next 9 years. Those cars will be sold under the new EQ brand the company created last September. Volkswagen is also spending big on electric cars as it tries to dig out from under the diesel cheating scandal that broke more than a year ago. It has created a new division for its electric cars which will be marketed under the I.D. brand.

Meanwhile, Ford CEO Mark Fields is whining to anyone who will listen that nobody wants to buy electric cars. “In 2008, there were 12 electrified vehicles offered in the U.S. market and it represented 2.3 percent of the industry,” Fields said in an interview with Bloomberg recently. “Fast forward to 2016, there’s 55 models, and year to date it’s 2.8 percent.”

Oh, woe is me, Mark. If only it was 1956 again and all a car company needed to worry about was how big the tail fins on next year’s cars should be. Here’s a question for you, Mark. What good will all those Super Duper Duty trucks be worth to your company when the waters of Lake Michigan close over your factories? Take a look out your window; see what’s going on. In the final analysis, your profits will not save you.

Source: Bloomberg

 





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About the Author

I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I'm interested in it. Please follow me on Google + and Twitter.



  • trackdaze

    Not surprising from the car company that will sell you a three series at twice the price of a camry when it cost much the same to build.

    This may also explain why bmw plug ins typically have anorexic batteries 5-7kwhr and low production quotas that have the 3series plug in sold out at puny numbers.

    Nevertheless, bmw also suggest next year they will sell 100000 plug ins up from the 70thou this year.

  • Kip

    I get your point that Ford has responsibility beyond next quarter’s profit and I agree even as a Ford stock owner. But I do need to educate you on one point. The upper great lakes and Detroit are 600 ft (~ 200m) above sea level. So although many American cities may end up beneath the waves due to global warming Detroit is not likely to be one of them.

    • Steve Hanley

      Thank you for that clarification. Apparently my inclination toward hyperbole temporarily overwhelmed my more rational self. Nonetheless, I think I made my point. ; – )

      Thanks for your comment.

  • Mike J

    Aside from the technicalities already pointed out about the Great Lakes and sea level rise, good points, Steve. Ford and BMW could have taken the approach of “there are technical challenges of electric vehicles, such as cost and energy density, that need research and development. But together with academia and governments, we are going to build cost-effective batteries because we understand the world faces a climate crisis that will take everyone’s commitment to solve. And we’re doing this for the future of our children and their children.” Instead, these knobs responded with, “Oh, geez, batteries are expensive and hard to make, and it will cost us, God forbid, quarterly profits.” I hope they go bankrupt after Tesla, BYD, and other companies that have some ethics and foresight take the market from them.

    • Steve Hanley

      I may never live down the Lake Michigan gaffe, but I do appreciate you sharing your thoughts with us. They pretty much echo my own thinking.

  • Marc P

    “Juraschek says it will take about 7 years to double the amount of energy stored in a battery.”

    Hmmm, for a supposedly dire prediction, I think this would actually be a great accomplishment if it comes true.

    For the same battery size, weight and cost, the Bolt’s driving range, in 2023, will be 400+ miles!

    What’s not to like and be enthusiastic about !

    7 years isn’t that long. It’s about half the length of a Ford F150 generation…

    • Steve Hanley

      I like your attitude, Marc! Too bad many in the traditional car business don’t have your sunny perspective.

    • J_JamesM

      Yeah, that is kind of mystifying. You don’t see an ICE engine halving its size every seven years.

  • Joe Viocoe

    In 2008, there were 12 electrified vehicles offered in the U.S. market and it represented 2.3 percent of the industry,” Fields said in an interview with Bloomberg recently. “Fast forward to 2016, there’s 55 models, and year to date it’s 2.8 percent.”

    Compliance vehicles, only offered by lottery, in a handful of states, for lease only… don’t count!

  • bioburner

    In 2008 there were NO plug in cars offered for sale, ok except maybe the Tesla roadster. Fast forward to 2016 and there are something like 22 of them. I would call that growth.

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