On September 15 BMW confirmed to the Financial Times that there will be no successor to their electric i3 and i8 models. Even though the model will still be sold, BMW’s sales and marketing chief Pieter Nota explains, there is no specific successor plan anymore. This confirms what BMW’s head of R&D Klaus Frohlich already announced earlier in June this year: the end of the i3 is near.
In asking why BMW decided so, it doesn’t seem to be because the i3 isn’t successful. Because the i3 is actually still doing very well. It is currently in its sixth year of production and its fifth iteration. Furthermore, BMW sold over 150,000 i3 cars so far, demand for electric cars in general and the i3 specifically have increased every year. Sales for the first half of this year were 21% higher than the same period last year and sales last August were even 30% higher than last year. So, as Nota puts it in his interview with the Financial Times, “The i3 is actually doing extremely well.”
The actual reason, Nota continues, is that BMW will start focusing more on electrifying its mainstream models—a strategy that we have started seeing in their new Mini Electric, which is mostly an electric version of the existing Mini. So, instead of focusing on creating new and different models completely from scratch like the i3, BMW will from now on focus on electrifying its current range of models.
In an earlier contribution in April this year I wrote about “Why The I3’s Success Is Bad News For BMW.” The key point made there was that the i3 is not really a BMW and that its success therefore adds to creating an inconsistent brand. The Financial Times article hints at the same conclusion when they say that “the i3 was always an outlier for BMW, bearing little resemblance to its line-up of saloons or sport utility vehicles and appealing to a different demographic.”
So, by ending its i3, BMW signals its change in electrification strategy. Instead of seeing electrification as a side project for special cars, it is now integrating it into its normal range of cars. For the very same reason as I found the success of the i3 bad news for BMW, I think ending the i3 is good news for BMW. If BMW succeeds in electrifying its mainstream models, then they can still maintain their BMW brand as we know it.
But it is not only good news. Even though BMW plans no less than 13 battery-only models by 2023, it seems to me that they are still reluctant to fully embrace electrification. As we read in their official electrification strategy, they aim for a BMW Group production system that “will create structures that enable our production facilities to build models with a combustion engine, plug-in hybrid or fully electric drive train at the same time.” In other words, they bet on three horses at the same time.
This strategy works well for Kia. Next to its fully electric e-Niro, which is high in demand, it has produced a combustion engine version and a plug-in hybrid version before. They are basically the same cars and they sell well. But the e-Niro exists today, in 2019. In 2023 the competitive landscape will have changed substantially.
With its new ID series, for example, Volkswagen is creating a standard platform from scratch for all its electric cars. Like Tesla, this electric-only strategy enables to fully take benefit of the design possibilities provided by the lack of a combustion engine and the smart placement of batteries. And it also produces significant scale advantages since the same platform can be used as basis for a wide range of models.
BMW could have had such platform too—and it actually has. Its i3 and i8 were completely conceived from scratch as electric only models. Would they have put their energy in creating that kind of platform for models more similar to their mainstream models, they could have been miles ahead of their competitors. Volkswagen is doing exactly that. Even though its ID series is new, it clearly targets a similar market as their other models. As they say themselves, it is a “normal” Volkswagen, but then electric. Volkswagen does it now, while BMW already had the i3 in 2013.
Given where they currently are, the only viable strategy left for BMW is probably the one they follow now: creating combustion engine, hybrid and electric-only versions of the same models. A giant missed opportunity, but history can’t be changed. And copying Volkswagen’s strategy now seems too late.
What they might want to do next to their new electrification strategy, though, is to carefully think about their strategy for hydrogen-fuelled cars. If they can’t win with electric cars anymore, they might want to be a frontrunner in developing fuel-cell cars. They do have the BMW i Hydrogen NEXT. So far, though, it is not much more than a modified X5. The good news is that, with this car, they stick to their brand. Now let’s see what else they have learned from the i3 experience.
This post was published earlier here on my forbes.com page.
Image credit: Getty