BMW to Start Mass Production of EVs Starting 2020

BMW representatives have said on Thursday that the carmaker is preparing to start mass-producing electric cars by 2020, and is expecting to have released 12 different models by the year 2025.

Electric cars have had a rocky start, due to the fact that many car buyers were put off by the high price tag of the vehicles and the limited operating range. However, this changes when Tesla introduced the Model S in 2012. The car blew away any competition, as it had a range of 200 miles on a single charge.

Considerable technological advancements have been made since 2012, mainly in terms of energy storage, as a result of Volkswagen’s diesel scandal after which all carmakers were pressured by both environmental organizations, as well as various governments, in order to develop vehicles that would be less damaging to the environment.

BMW, a company that entered the electric car market in 2013, one year after Tesla’s Model S, has announced that its factories will be ready to mass-produce electric vehicles by 2020. According to Chief Executive Harald Krueger, BMW is planning to release 25 electric vehicles, of which 12 will be fully-electric, by 2025. He has also mentioned that the electric cars are expected to have a maximum range of up to 435 miles.

One day before the BMW announcement, Nissan released a new version of Leaf, as a strategy to compete with Tesla, who sold approx. 83,000 vehicles last year.

Many car manufacturers have been reticent when it comes to entering the electric vehicle market, as it is still unprofitable. This is mainly due to technological limitations in terms of energy storage. Electric car batteries are both expensive, as well as quite limited in efficiency, considering their purpose. When considering that between 30% and 50% of the price of an electric vehicle is merely the cost of its batteries, the fears of the carmakers become understandable.

Furthermore, a battery pack that would give an electric car approx. 500km range costs almost three times as much as a gasoline engine.

While capacity investments into the battery sector could help reduce the price of electric vehicles to the point where they would be as affordable as gasoline-powered cars, this change is not expected to happen for another few years.

It is also important to keep in mind that the ever-growing taxes put on diesel cars may cause the cost of ownership of an electric vehicle to drop enough in order to compete with a gasoline-powered one.

ING analysts have declared that according to their calculations, 100% of the cars in Europe may be electric, by 2035.

Krueger stated that BMW is preparing to unveil a new electric vehicle designed to bridge the gap between the i3 city car and the i8 hybrid sports car, at the Frankfurt Motor Show next week.

While electric vehicles do come with a hefty price tag, their use is also somewhat limited to areas that have charging stations. Representatives of AlixPartners have presented information according to which a city such as London would require 10 billion euros, or $12 billion, in order to develop its charging infrastructure to the point where owning an electric car would actually be practical.

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