bmw i3

BMW commits to electric vehicle mass production by 2020

BMW is the latest auto manufacturer to commit to mass production of electric vehicles, with 12 different models to be made available by 2025.

The German car company previously launched the i3 electric car (pictured above) in 2013 and said that it was now readying its factories to mass produce electric cars by 2020, providing the demand for battery-driven vehicles takes off.

Car buyers thus far have largely shunned electric vehicles because of their high cost and limited operating range, although the unveiling of Tesla’s Model S in 2012 sparked a change of opinon, it being the first car to crack the 300km range barrier from a single charge.

Since then, big advances in battery technology and a global crackdown on pollution in the wake of Volkswagen’s dieselgate scandal have increased the pressure on carmakers to speed up the development of zero-emission alternatives.

“By 2025, we will offer 25 electrified vehicles - 12 will be fully-electric,” BMW chief executive Harald Krueger told journalists in Munich, adding that the electric cars would have a range of up to 700km.

The news marks a significant foray by a major manufacturer into electrification. BMW includes the Mini and Rolls-Royce brands, selling a total of 2.34 million cars in 2016, and its announcement came on the day its smaller, upscale rival Jaguar said that it would offer electric or hybrid variants of all its car models by 2020. 

On Wednesday, Nissan unveiled a new version of its Leaf electric vehicle in its latest move to take on Tesla, which sold 83,922 vehicles last year.

Traditional carmakers have been slow to embrace the electric vehicle market because it remains unprofitable, largely due to the cost of batteries which make up between 30 per cent and 50 per cent of the cost of an electric vehicle.

A battery pack with 60kWh capacity and 500km range costs around $14,000 today, compared with a gasoline engine that costs around $5,000. Add to that the $2,000 for the electric motor and the inverter and the gap is even wider.

Capacity investments into the battery sector may bring down the costs of electric vehicles to a “tipping point” when they reach parity with combustion-engined equivalents, predicted to occur some time between 2020 and 2030, according to analysts at Barclays.

Earlier this week, energy consulting firm DNV GL predicted that cost parity could be achieved as early as 2022. 

With cities threatening to ban combustion-engine vehicles or to tax diesel cars more heavily, the total cost of ownership of electric cars could drop below their combustion-engine equivalents and Europe could become a 100 per cent pure battery electric vehicle market by 2035, according to analysts at ING.

The Frankfurt Motor Show, which starts next week, will be used by BMW to unveil a new four-door electric car positioned between the i3 city car and the i8 hybrid sportscar, Krueger said.

“We will be increasing the share of electrified models across all brands and model series. And, yes, that also includes the Rolls-Royce brand and BMW M vehicles,” he said.

German rivals will also be showing electric cars, with Daimler’s Mercedes-Benz brand unveiling the EQA, a concept mass-market electric car, and Volkswagen taking the wraps off its ID Crozz.

Aside from vehicle cost, a key obstacle to making electric cars popular is the amount of time it takes to recharge and a lack of charging stations across Europe.

London needs to spend around £9bn to get its charging infrastructure to a level where retail buyers can practically own an electric car, according to consultancy AlixPartners. Almost none of that spending has been earmarked so far.

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