BMW CEO Claims Electric Vehicles Won't Work, Signals Retreat

Despite having less than 2% of the total US market share last month and lagging behind the overall market (which grew 17% this March, year over year, compared to BMW’s “mere” 12% improvement) BMW’s North American CEO Jim O’Donnell claims he knows what’s good “for at least 90 percent and maybe more of the population”, and it is not electric cars.

Now, before we go on, it should be noted that BMW’s corporate leaders in Germany are investing billions (with a b) in launching their new “i” sub-brand and getting their next-generation i8 flagship “just right”.  The company has sold leased out its Mini E electric and recently announced the ActiveE electric BMW-branded cars as well … which begs the question:  what the (he)ck is going on here?

The way I see it, BMW expects its new i sub-brand to be a spectacular, money-losing failure, and it’s already sounding a full retreat.

Why do I say this?  Consider that BMW first announced that they were going to build the i8 (then called the Vision EfficientDynamics) there was no mention of a sub-brand.  The car was, indeed, a “vision” of BMW’s future … or (at least) BMW’s future as it was seen by BMW’s corporate masters in the months leading up to the 2009 Frankfurt show.

You all remember 2009, right?

In case you don’t, I’ll sum it up for you:  2009 was a bad year.  In 2009, sales of new cars dropped to their lowest point in nearly 3 decades.  In 2009, everyone in the industry was staring down their own mortality.  In 2009, even General Motors – once the mightiest corporation on the face of the Earth – was left begging.

Even on its best days, in the heady throes of orgiastic spending at the quivering peak of the easy-credit bubble, the whole of BMW’s product line-up couldn’t outsell GM’s pickup trucks – let alone GM’s passenger cars, trucks, commercial vans, and SUVs … surely BMW’s board watched intently as the mighty GM reached out to the American people with its palms up, and thought “there, but for the Grace of God, go I.”

In the end, BMW did go “there”, and the company dipped into America’s TARP fund heavily – to the tune of 6.2 billion (with a b) US taxpayer dollars.

Like Ford and GM, BMW was still reeling from the (then) record gas prices of 2008, and it was downright tough to sell V10-powered cars and heavyweight SUVs (and anything else, really) in the early part of 2009.  So, what to do?

The General’s big-M Marketers had knocked one out the park with the Volt, and the car became a symbol of everything that was “right” with GM – held up as a shield to critics of the bailout.  “We had to bail them out,” people said.  “Look what they were about to build.”

BMW must have figured the only option left for them was an extended-range hybrid.  A German Volt, if you will … and they built one:  the Vision.

BMW’s Vision out-did the Chevy Volt in every marketable way. The concept Volt had wild styling and deep windows. The Vision had wilder styling and deeper windows. The Volt had an electric motor being fed by a clean-burning gas engine. The Vision had a bigger electric motor being fed by a clean-burning diesel engine.  The Volt was going into production.  The Vision was going into production.

BMW had gone for broke, but that was 2009.  “Another time,” as the say – and corporate greed is nothing if not short-sighted.

By the time BMW had reached a decision to build the Vision it was the spring of 2010, sales were way up compared to the dark days of 2009. BMW was still under-performing the market, of course (up 3%, vs. the overall market’s 24%) but things were looking up.  Compared to 2009, credit was getting easier to come by. Compared to 2009, gas was cheap.

2010 was shaping up to be a profitable year, in other words, so a decision was made – quietly – to back off the Vision’s promises. Better instead to focus on a faster, more powerful (and more profitable) 1 series and a pair of twin-turbocharged, V8-powered SUVs. These were known quantities, and surely the braintrust behind the Ultimate Driving Machine knew it.

BMW quickly hatched the “i” brand, which could put just enough distance between itself and BMW “proper” to achieve plausible deniability. “Bring it to market,” they must have thought. “Bring it to market and let it fail – it’s not our money anyway.”

It seems to me that O’Donnell and company, then, are either in deep denial about their actual position in the marketplace, or else they know something they’re not letting on, and are already digging up excuses for the i cars in a bid to save their jobs when (rather than the if) the brand tanks.

I, for one, hope they don’t need those excuses.

Sourcesthe Detroit News, the Truth About Cars, Autoblog, Jalopnik, and too many Kona Blend Java Monsters.

Jo Borrás

I've been in the auto industry 1997, and write for a number of blogs in the IM network. You can also find me on Twitter, at my Volvo fansite, out on two wheels, or chasing my kids around Oak Park, IL.