BMW Sets Target on Tesla with Upcoming Electric Model

Ned Piplovic

BMW

While Tesla (NASDAQ:TSLA) has been the most visible driving force behind the effort to introduce electric vehicle into the mainstream, traditional automobile manufacturing companies are taking action to compete effectively.

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During the North American International Auto Show in Detroit, BMW (FWB:BMW) updated the expected range information from last May’s introduction of its iNext electric model. At the original vehicle introduction, BMW estimated the vehicle’s range at “over 300 miles” on a single battery charge.

Even at 300 miles, the BMW’s model has a range that is 36% higher than Tesla’s Model 3. The updated figure of 435 miles per charge makes the range of the iNext almost double that of the Model 3. Even though the Model 3 has an extended range battery option, which promises 310 miles on a single charge, that increased range is still only 70% of what iNext would provide.

Tesla reportedly is building 3,000 to 5,000 Model 3 units per week and the true range of BMW’s iNext model cannot be verified until 2021 when the new model is scheduled to be released for retail sale.

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The direct vehicle comparison will have to wait until both companies release their upcoming models. The iNext model is a crossover Sport Utility Vehicle (SUV) – or a Sport Activity Vehicle (SAV) in BMW vernacular. Therefore, the iNext’s more suitable competition will be Tesla’s own announced Model Y SUV crossover.

While range is not much of an issue for urban and suburban driving, electric vehicles with single charge range, such as iNext’s announced 400-plus miles, would lessen the requirements for highway charging stations infrastructure and could accelerate adoption of electric vehicles as viable alternatives to internal combustion-powered vehicles for long-distance travel.

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BMW hopes that introducing market-disrupting vehicles will potentially help the company recapture the status of the best-selling luxury automaker in the United States, which it lost to Daimler AG’s (FWB:DAI) Mercedes brand in 2016 and again in 2017.

Tesla’s share price lost 2.4% during trading on January 25, 2018, while Daimler AG was down 1.2% and BMW shed just 0.6%. However, while Tesla’s share price gained 33.5% over the past 12 months, BMW and Daimler share prices were up 5.3% and 6.4%, respectively.

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Ned-Piplovic

 

 

Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.

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