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      10-23-2010, 02:11 AM   #1
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Post BMW Electric Cars Not Expected to be Immediately Profitable

BMW is not expecting to earn any profits with its first generation electric vehicles, such as the upcoming Megacity Vehicle, until possibly the second product cycle. BMW's conventional drive cars will subsidize the company's foray into electrical cars.

Article per Autonews (sub' required):
Electric cars won't be profitable at first, BMW CEO Reithofer says

Guido Reinking
Automotive News Europe -- October 22, 2010 06:01 CET

NUERTINGEN, Germany -- BMW CEO Norbert Reithofer isn't expecting new vehicle and powertrain concepts like the company's Megacity Vehicle and electric drive to contribute to profits at first.

“It may be that you don't earn any money with such technologies during the first product cycle,” he said during an event at the Institute for the Automotive Industry in Nuertingen, Germany. “Here, conventional drive has to cross-subsidize the new technology.”

And this is true even though BMW is planning to charge customers more for electric cars.

"Electric cars will be expensive vehicles in the beginning," Reithofer said.

Starting in 2013, BMW is planning to bring its Megacity Vehicle to market. It is the first BMW tailored to electric drive from the outset.

The subcompact, which will be built in Leipzig, Germany, will have a passenger compartment the relies heavily on carbon fiber composite. This material is very light but extremely expensive. That's the reason it has been used primarily in racecars and supercars until now.

“But we see it as the future of body construction,” Reithofer said.

In contrast, the MCV's front end, the “drive module,” is mainly of aluminum.

The combination of carbon fiber and aluminum will offset as much as 350 kilograms (772 pounds) of additional weight from battery and electronic components, Klaus Draeger, BMW's development chief, told Bloomberg earlier this year.

BMW is building its electric drivetrain as well as its battery, a high-voltage storage unit, itself. In doing so, the brand intends to differentiate itself from the competition.

Reithofer said: "We won't give that up,” even if it's more expensive to do everything on its own.

However, BMW will get battery cells for the MCV from SB LiMotive, a joint venture between Robert Bosch GmbH and Samsung SDI. SB LiMotive also is also supplying battery cells for the BMW 1-series-based Concept ActiveE EV test car.

BMW is continuing to rely on conventional drives with gasoline and diesel engines. That way, its overall profitability won't suffer too severely.

"In 2020, electric vehicles will be 5 to 15 percent of the electric vehicle market,” Reithofer said. "So we will have a long transition."

At this time, "conventional technology has to cross-subsidize new technology."

Douglas A. Bolduc contributed to this report

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