BMW Electric Car Line-Up Challenges Tesla

By Douglas A. McIntyre Published May 10, 10:41AM EDT

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BMW calls them the i3 and i8. They are, in reality, Tesla (NASDAQ: TSLA) killers, and worthy ones.

The i3, sells for as little as $42,000, which is about two-thirds of what a Tesla S does. Tesla wants to build a less expensive car. It will be priced at about $40,000. Both BMW and Tesla understand that affordability is an issue. BMW’s lead in this category could be a very important advantage.

While the pure-electric i3 cannot match Tesla in acceleration which is one of the attractions to Elon Musk’s cars, it does go from 0 to 60 in seven seconds, which is fast by most standards. It also has a number of the standard features which make a BMW a BMW. These include high performance brakes, stability control, and an dizzying array of electronics.

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The car Tesla should be more anxious about, for the time being, is the hybrid BMW i8. Its disadvantage is price — $136,000. However, it is blazingly fast — 0 to 60 in 4.2 seconds, and an engine which puts out 357 horsepower. BMW would be well served to produce an i-series priced between its two models-one which would give the Tesla S direct competition.

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BMW has one other, huge advantage — its dealer network. Tesla is forced to sell its cars direct to consumers. In several states, legislatures have blocked that approach, insisting all cars be sold through dealers. BMW does not run afoul of these laws. With a dealer network which is decades old, it actually embraces them

The all-electric car business is in its infancy. That is one of Tesla’s problems. It could have a dozen competitors from major manufacturers before the factory it wants to build to improve battery supply is completed. In the meantime, BMW not only has cars; it has its brand — a brand which makes it attractive to high-end buyers because it is among the most powerful brands in the world.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.