The BMW i3 isn’t selling. It’s as simple as that.
Despite a heap of awards, global sales are under 30,000 vehicles sold since 2013. It is currently being outsold by the Nissan Leaf 3:1 and even larger cars such as the Mitsubishi Outlander PHEV are beating it on sales. The i3 is also doing very small numbers in its German home territory, partly because electric car vehicles receive no financial or tax incentives in Germany. The i3’s petrol engine is also a limiting factor, it will only get it 80 miles on a full tank, so most owners will use them as pure EVs.
BMW needs a i-boost. And it needs Apple.
Apple loves being perceived as the premium brand in consumer technology. BMW is a premium brand with consumers and businesses. We know that BMW and Apple have held talks as Tim Cook went to BMW HQ last year and senior Apple execs toured the carmaker’s factory in Leipzig to understand the manufacturing process for the i3. BMW were naturally cautious in sharing detailed information with Apple at this time.
Since then a number of key changes have occurred, and there are more signs that point to a revival of the talks, and the i3 being the platform for the first Apple car. But it won’t be a wholly Apple owned project.
- Following the initial talks there has been a reshuffle inside the boardroom at BMW, with Harald Krueger, appointed BMW Chief Executive in May.
- BMW’s board member for development Herbert Diess, who played a leading role in initial discussions with Apple, defected to Volkswagen but this may ultimately prove a bad move for Diess given the recent revelations at VW and emissions cheating.
- As stated the i3 just isn’t selling as well as it could, and BMW needs Apple to create a consumer buzz around the car. I expect that the Apple-BMW i3 will be sold in the i3 range, rather than a separate car in its own right to begin with.
- The Apple-BMW i3 will be fully electric, not a hybrid, and potentially Apple’s recent battery designs with the MacBook range could play a factor in the development of one with a better range for the car.
- The current i3 starting price in the US is $42,400, before options. A recent analyst report by Jeffries & Co is putting the price of an Apple Car at an average of $55,000. At stated above in 3, I expect that the Apple-BMW i3 will have a number of innovations beyond the lower end of the i3 range which would hit this price point easily.
- The current i3 is expected to receive a facelift in 2016 with a larger range battery. The Apple Car is touted for a reveal in 2019. This sits absolutely perfectly with the current 3 year revision cycle right now with the i3 (2013-2016-2019)
- Despite the hype, Apple’s first foray into the auto industry will not be a self-driving autonomous vehicle, which means in order to accelerate production, a partnership is the best option with a similar company. BMW is the best bet for this.
This is not the first time OEM manufacturers have shared projects to create a platform. Mazda and Ford have collaborated previously, and even Aston Martin and Toyota have gone into pseudo-partnership to share components for the AM Cygnet, which was basically a Toyota IQ with an Aston Martin makeover.
There is an eighth reason: Dealerships. A partnership with Apple will mean the potential to sell the BMW i3 Apple variant at the Apple Store, something which could disrupt their sales model in the same way Tesla has done with the traditional way of selling cars. And this could be the icing on the cake for both Apple and BMW, another way to reach the mass consumer market.
BMW knows that in order for the i-brand itself to survive beyond the i8 (it has trademarked i0-i9 already) it needs to think differently and it needs a boost with the consumer market. Although there have been changes in the boardroom, Krueger has not ruled out reigniting the talks of the previous year. “Let me answer in general terms. There is something which makes BMW Group and Apple very similar. Both are companies with strong brands,” he said in an interview.
BMW have said that by 2025 all of its cars will be offered as a hybrid. But in 2019 BMW will offer one car in particular that will be fully electric. And that will be thanks to Apple.