BMW Boosts Plug-in Market with 2016 Models

BMWBMWs are not fuel efficient. Yet with corporate average fuel economy standards ratcheting up to 54.5 unadjusted mpg by 2025, BMW ? and other luxury and performance brands like it ? must find a solution to meet emissions standards while still delivering the ultimate driving machine.

For BMW, the solution is a plug. In the next few years, every BMW model will have a plug-in ?eDrive?

In October, BMW rolled out the X5 40e, a plug-in variant of its popular midsize SUV. In the first quarter of 2016, BMW will release the 330e, a plug-in hybrid twin-turbo variant of its best-selling 3-Series compact sedan. By this summer, the 7-Series flagship luxury sedan gets electrified.

?Our cadence will be about one (plug-in variant) per quarter,? said Richard Steinberg, spokesman for BMW?s electrification program in North America. ?Proud i3 owners can go full electric in all vehicle classes.?

Those i3 owners were early adopters, testing an oddly styled carbon-fiber city car with an available range-extending gas generator. It was efficient, but could also whoosh through traffic with silent torque.

The electric experience was amplified with the visually stunning i8 supercar. Now, the technology migrates into segments that haven?t had many plug-in options.

?BMW, as a performance brand, had to increase fuel efficiency in the U.S. and other places,? said Jessica Caldwell, a senior analyst with Edmunds. ?There are not many large vehicles like the X5 that are plug-ins. BMW is consistent with how they will have plug-ins ? a clear strategy that is not confusing to consumers.?

Automakers such as Nissan, General Motors, and Hyundai have a more sporadic approach to electrification, offering one or two plug-in models.

A more direct competitor is Mercedes, which will offer up to 10 plug-in hybrids in the US by 2017, and should be eyeing BMW carefully.

BMW?s plan has risks in terms of investment and customer acceptance, but also advantages.

?Part of a large-scale project like BMW?s is having economies of scale with not much price premium,? Caldwell said. ?They must figure out how to differentiate with good attributes and value.?

The 330e will retail for $44,000, or $4,000 more than a base model. At $62,100, the X5 40e has a $7,000 premium. But these vehicles come well-equipped to enhance value. State and federal tax incentives of up to a $7,500 federal tax credit also apply, making the cost more competitive with gas models. Steinberg suggests pricing will not be as stiff for leases, which are common in the luxury segment.

The BMW X5 xDrive 40e crossover employs a 2.0-liter four-cylinder engine, 8-speed automatic transmission, and lithium-ion batteries that deliver a combined 308 horsepower and 0-60 mph in 6.5 seconds. Fully charged, it travels 13 miles before the gas engine starts. Expect the equivalent of about 56 mpg.

The 330e, due next spring, also uses a 2.0-liter four-cylinder engine and li-ion batteries, but delivers 248 horsepower and 0-60 mph in 5.9s. Expect improved all-electric range.

?At this point, we?re going with relatively small gasoline engines and hybrid systems that provide 13-20 miles all-electric range,? Steinberg said. ?It?s appropriate for current customers, but there?s understanding this needs to grow.?

While the new models are engineered ground-up as plug-ins, they?re not as exotic as the i3 and i8. The i3 that travels 80-100 miles all-electric, and up to 150 miles with a gasoline range-extender.

The i8 travels 15 miles all-electric, but packs a mid-mounted gasoline engine. Both employ carbon fiber bodies.

Electric vehicles deliver zippy near-silent acceleration. The cars leap into city traffic with an ease that encourages you to slap the throttle at every opening. Regenerative brakes seem grabby, but maximize battery replenishment during deceleration.

There are other benefits you may not have considered.

?With a plug-in, you can heat and cool the vehicle without burning hydrocarbons,? Steinberg said. ?Our cars offer pre-conditioning that allows you to set what time you want to leave and the temperature you want the cabin. Get in and go.?

BMW developed a remote app for smartphones so owners can check battery levels and utilize intelligent route planning that optimize electric driving modes.

Plug-in competitors are also making moves. Chevrolet just launched its second-generation Volt with a 53-mile all-electric range, 420 miles with the gasoline engine. Chevrolet will launch the all-electric Bolt next year. Ford fortifies its strategy with a $4.5 billion investment by 2020 that includes 13 new electrified vehicles, affecting 40 percent of its nameplates.

After a limited launch in California, the proving ground for plug-in vehicles, the Mercedes-Benz S550 plug-in hybrid gets nationwide rollout in 2016. The C350e plug-in compact sedan and GLE crossover are following to compete against the 330e and X5 40e, respectively.

Sales of current plug-ins are not good. According to Automotive News, Chevrolet sold only 13,279 Volts ($33,170) through November. Nissan moved 15,922 Leafs ($29,010); Cadillac delivered 889 ELRs ($57,500). Tesla sold 18,724 cars, but just added the Model X crossover. BMW sold 9602 i3s and 1609 i8s.

BMW will occupy the higher end of the market. Teslas range $70,000 to $120,000, but with up to a 280-mile range. BMW?s i3 lists for $42,400-46,250; i8 rises from $136,500.

?Looking at all electrified vehicles, sales are pretty low,? Caldwell said. ?In 2015, it was 2.8 percent of total new cars, down from a peak of 3.7 percent in 2013. The climate isn?t necessarily good for these vehicles with gas prices and interest rates low.?

Low fuel prices diminished demand for pricey electric vehicles, but they?re an insurance policy should oil prices spike. Besides, efficiency and smooth performance are dreamy no matter who?s pumping what.

?Long term, BMW has a good strategy, but it will be a struggle in the short term? Caldwell said. ?You can?t build cars people don?t want to buy. If gas prices go up, it will seem genius. If they remain the same, it will be a challenge for them.?

(Source: TCA)