BMW Electric “i” Brand Expected to Pay Off Big Long-Term
As you’ve probably already noticed, BMW is beginning to heavily push the electric-powered “i” brand, which includes the all-electric i3 and the upcoming i8 plug-in hybrid, two-seat supercar. To help sell the new car, BMW brought several investment bank analysts to Los Angeles to drive the i8. We here at Bill Jacobs BMW wish we could have joined the bank analysts and taken the i8 for a drive!
“It’s taking huge amounts of R&D (spending) for materials, structures and power-trains. I think at the moment it’s (the “i” program) about being a mobile test bed to prove electrification techniques which are being gradually developed and honed. But what is really important, the “i” vehicles are turning into fantastic brand builders for BMW,” said Tom Urquhart, an HIS Automotive analyst in an interview with Forbes.
Analysts predicted BMW would lose up to $270 million over five years on the i3 program alone. BMW reportedly spent $2 billion on the development of the project.
Arndt Ellinghorst, analyst with International Strategy and Investment of London, was in Los Angeles to drive the i8 and said that the “i” brand could be worth $17.6 billion. He didn’t elaborate why he thought it would be valued so high.
“This is based on 300,000 units at an average selling price of 35,000 euros ($47,785) and a 15 per cent margin would generate 10.5 billion euros ($14.4 billion) of sales and 1.6 billion euros ($2.2 billion) of EBIT (operating profit),” Ellinghorst said in an interview with Forbes. “BMW is the only carmaker globally, next to Tesla, taking e-mobility as an opportunity to build a business rather than just defensively using it to improve fleet average fuel economy.”
The combination of an efficient, yet powerful three-cylinder engine and an electric motor allows the i8 to achieve up to 112 mpg, giving the stylish supercar a range of up to 372 miles—which is quite comparable to many cars on the market today.
Morgan Stanley analyst Laura Lemke, who was in Los Angeles, said the i8 was the “ultimate halo effect” for the brand.
“Even more impressive than the car itself was the overwhelmingly positive response it evoked from the public. The market and peers may underestimate how big a brand ambassador the i8, and project “i” really is,” Lembke said in an interview of Forbes.
Despite the high cost of the new technologies and materials, we here at Bill Jacobs BMW feel these advancements will eventually trickle down through the rest of the BMW lineup. “This may be unappreciated by investors, which thus far seem to place little value on project i” Lembke said.
BMW is already looking to expand its production on carbon fiber. Last week, the German automaker said it will spend $200 million to triple its capacity of its carbon fiber production plant. The use of exotic materials, along with the striking and stylish wrapping of the i8, makes it a very desirable vehicle.
“This is a spectacular looking design and communicates well visually that this is about changing the future paradigm of what a sports car is, but at the same time evoking traditional sports cars. It’s futuristic but recognizable as a sports car. It would seem you will be able to have your cake and eat it,” Urquhart said in the Forbes interview.
To learn more about the new, BMW i8, and the entire “i” brand, visit Bill Jacobs BMW located at 2495 Aurora Avenue, Naperville, IL, or contact us at (630) 615-3125 today.