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.
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.
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.
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.
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.