Sunday, February 9, 2014

BMW i3 Sochi Olympic Commercials Revealed



BMW has released a series of commercials that will be used for commercials during the Sochi Winter Olympics which just opened yesterday. There are spots for many of the new BMW products but the BMW i3 spots will be the first commercials ever aired in the US for the car so I've posted them here.

The commercials are titled "Shhh", "Reasons", "Cop" and "Zero Gallons". I really like Shhh & Cop. I think Reasons is OK and am not a big fan of  Zero Gallons. Shhh (seen above) is great. A father comes home and when his son wonders why he didn't hear him pull up the dad says "Electric car...sneaky" and goes off to bed. This gives the kid the great idea of sneaking out quietly with the car for a rendezvous with his girlfriend; something that many teenage kids do. I remember pushing my dads 1976 Oldsmobile Starfire out of the driveway late at night so he wouldn't hear me "borrowing" it. I would then shut it off before I reached the driveway when I was coming home so I could silently coast back in without waking him. I could have really used a quiet EV for these stealth, late night adventures back then. However in the commercial the i3's smartphone app does the kid in, waking his dad to alert him of the cars charging status! Very clever spot.

The video below, Reasons, takes a swing at the idea that people only want to drive electric cars to reduce their carbon footprint, to help clean the air, to live a sustainable lifestyle, etc or in other words to save the world. But people buy cars for many reasons, and how well the car drives is one of the most important reasons of all. With the i3, you don't have to sacrifice driving pleasure to get all the other positives that driving electric brings, and this spot tries to drive that home.



"Cop" is easy to understand. The i3 is fast and fun to drive. You won't find yourself wanting to crawl along at 5 miles per hour under the speed limit in the slow lane if you have one. You'll more likely find yourself stomping the accelerator whenever you can. This will likely lead to unwanted attention by the men in blue.




While I like the message Zero Gallons was attempting to convey, I think it misses the mark. "This is our most efficient vehicle yet. With zero miles per gallon...more specifically, zero gallons."  Most of the i3's sold in the US are going to have the range extender option, so they won't really use "Zero Gallons" in the first place. But even if BMW wanted to get the "all electric" message out there, they could have done it better in my opinion. Perhaps show the car whizzing by a deserted gas station with tumbleweeds rolling past the pumps and the driver with a clever smirk on his face. Hopefully this one will get the least airplay because the other three offer much more powerful messages. 



The video below features the BMW i8, but it's really a commercial for the whole BMW i brand. The video uses the words of science fiction author Arthur C. Clarke and uses an array of futuristic cityscape visuals and then introduces the i8. It's inspiring, and reminds us that we aren't even capable of knowing what to expect in the future, and the i8 is just a taste of what kind of cars we are going to be driving very soon. 


Thursday, February 6, 2014

US i3 Orders Limited to Special "Launch Edition" Package For First Three Months

You want one of the first i3's in the US? You'll be getting the full leather Tera World interior as seen above and every option available besides the 20" wheels then. Welcome to the "Launch Edition i3"

Just yesterday, BMW i dealers received a bulletin that informed them they can officially begin to process customer orders and place them in the pipeline. Many customers have already left deposits at their local BMW dealerships even though it wasn't an official order yet, with the hope of being one of the first people to take delivery of this revolutionary vehicle. However they didn't have an official order place in the system, that was just to have a place in line reserved for them and to make sure they got one of the few allotted cars their dealer would get for 2014. So now that these reservations can be turned into official orders, everyone must be really happy, right?

Not so fast. In a move that will most certainly anger many of the enthusiastic people waiting patiently for their i3, BMW informed the dealers that the initial first three months of US i3 production will be restricted to a special "Launch Edition" i3. The Launch Edition i3 has the top of the line interior Tera World and every option available on the car besides the 20" Sport Wheels which you can add if you would like. (Options include: Metallic paint, Parking Package, Technology and Drivers Assist Package, DC Quick Charge Option, Heated Seats and the Harman Kardon Premium sound system). The only choice the customer gets is whether or not they want the range extender, the exterior paint color and if they want the 20" Sport wheels. So unless the people waiting in like with deposits are willing to take a fully loaded Launch Edition i3, they will have to wait an additional three months for production of the custom ordered i3's to begin. The Launch Edition i3 production will run from March to May so custom ordered i3 production will not begin until June.

As expected this isn't sitting well with a lot of folks who have had deposits and reservations for many months now. I've had over a dozen people reach out to me today to confirm whether or not this was true after being notified by their dealer. Some thought the dealer was just trying to jack up the price of their car by making them get options they didn't want and were seeking clarification from me. I wish I could tell them it wasn't the truth, but this is how it's being done. The unfortunate thing is many people have expiring leases and planned to make due for a few weeks until their i3 came in but now the gap is more like 3 or 4 months and they don't know what to do. Should they bite the bullet and get an additional ~$4,000 of options they didn't necessarily want or wait till July for the i3 spec'd the way they ordered?

Here is the cost breakdown of the Launch Edition i3:

Base:141A(BEV): $41,350.00
Color:B81: $550.00
Tera world:ZTW: $2700.00
Parking Package:ZPK: $1000.00
Tech+Driving Assist:ZTD: $2500.00
Heated Front Seats:494: $350.00
DC Fast Charging:4U7: $700.00
Harman/Kardon:674: $800.00
Destination: $925.00

Total: $50,875.

If you want the range extender just add $3,850, so a Launch Edition i3 REx will set you back $54,725.


The only exception to this is ordering process is for the current ActiveE drivers like me. As a "thank you" for participating the the ActiveE trial lease program, BMW is allowing us to order our cars "a la carte" in addition to giving us the heated seats and DC quick charge options for free. BMW is also creating some unique features that only our cars will have like interior, exterior and door sill badging, embroidered front trunk liner and BMW i floor mats. Plus we get priority ordering and the first batch of i3's that come to the US will include our cars and we should begin receiving them the end of April. BMW is calling our cars the "Electronaut Edition i3" and these only be purchased by current ActiveE drivers. The ironic thing is, I ordered my i3 REx with the Tera World interior and every option available including the 20" sport wheels. So even though I had the freedom to build my car the way I wanted to that the other early i3 buyers won't have, I'm still getting the car loaded just like the Launch Edition anyway.

I'm sure this will elicit some interesting comments below.

Monday, February 3, 2014

BMW i3 Born Electric Guest Blogger: Meet Toni From Belgium


A while ago I announced that I would be starting a new series here called, "I was Born Electric on...". The series will be featuring readers who are i3 owners and who are willing to share their thoughts on the car after owning it for a while. They will begin the post by introducing themselves and stating the date they were Born Electric, which is when they picked up their i3. Andy from the UK kicked off the Born Electric series and we then visited Hil from Holland. We'll now be traveling to Belgium to visit with Toni and his new Capparis White i3:  


My name is Toni and I was Born Electric on Monday, 27th January, 2014.

The first time I realized that there was an alternative to fossil fuels for propelling a car was in early 2011, when I came across an electronic brochure about the Opel Ampera, the European sibling of the Volt. The more I read about it, the more I was convinced that my next car had to be an electric one.
The reason why I didn't go for the Ampera back then was stupidly financial : 50.000� for a car was way above what I was willing/able to pay. 
Of course, there were other more affordable electric cars out there. But maybe I was not ready for the leap of faith into electro-mobility yet. Range anxiety was clearly an issue I had to deal with while I waited for my savings account to be able to take the hit of a new car.

Three years later, things had clearly evolved. Both on the EV market and in my personal situation. In the latter, I had enough spare funds to afford a reasonable down payment on a premium car. Moreover, the extensive immersion into electric car literature helped me to come to the conclusion that I did not really need a range extender since more than 95% of my daily commuting could easily be covered by a BEV. The question was then : which car was going to be the one. Ampera/Volt? No, though it definitely is a fantastic car, it still has a tail pipe and I did not want to buy an end-of-cycle model. Tesla? No, too big and too expensive, I did not want to take out a mortgage for the sake of buying a car.  Nissan Leaf? Er, no.  
The BMW i3? Well ... I must admit that my first impression was negative. Not because of its design; actually I am fond of its looks since the very first concepts that appeared in 2011.  But rather because it is a BMW! I never liked BMW. I always considered that BMW was making cars to suit arrogant petrolhead jerks (with all due respect, of course!).

And then I test-drove it. And fell in love.

Was I ready to overcome my prejudices and become a BMW driver myself?  Definitely. Biases are wrong, the car drives like a breeze, the technology inside is outstanding and I too can be a jerk sometimes. : )

So, in order to do penance for my past biases, I decided to devote this blog post to crushing some preconceptions that have been floating around the i3 in some reviews.  And I'll do that from the authoritative position of being the happy owner of a "Shamu Edition" (Capparis white & black - think Shamu the whale)


It is a city car:
No, it is not. Though the car handles incredibly well in an urban environment, it has nothing to be ashamed of when cruising at highway speed. It is fast and responsive. Steering is precise and forgiving at 130 km/h (80 mph).  Overtaking on motorways is a feast. It is a BMW after all, is it not?

The i3 is particularly noisy at high speed:
No, it is not. My first extended drive of the i3 has been the trip back home after delivery at my iAgent dealership. 50 km (30 mi) from Waterloo (Brussels area) to the Mons area where I live. Since the battery was almost fully charged, I decided that I could afford the luxury of squandering away precious kWh's on the E19 motorway. In addition to discovering the driving dynamics described above, I was also curious to put to the test the recurrent criticism I read about unpleasant airflow noises.  I can confirm that in-cabin noises are like taste; there is no accounting for them. I, for one, was not inconvenienced by the airflow at all. I even enjoyed it.


The trunk is too small and the suicide doors are a hindrance:
The question is : Compared to what? 
I am a small car guy. Before the i3, my car was a Mini Cooper. Before that, I owned a Mercedes A-Class (2004 model). Before that, a (discontinued) Rover 220sdi. I know what a small car is. And the i3 is no small car at all by my standards. The trunk offers enough space to generously accommodate the weekly shopping for a family of four. There is plenty of space for my Victorian longbow, arrows included, or for my eldest son's guitar, amp included. 

As for the coach doors, once again it all depends on where you come from. Compared to the coup�-style doors of my Mini, the i3's "antagonist" doors, as they are called in French, are a major step forward in terms of ease of access and comfort. Or to put it in my youngest son's words : "Sooo cooool!".


Materials used for interior trims do not feel "premium":
That was a tricky one.
As I said, price was an important parameter for me, as it surely is for most of us. Given that I accepted the idea of disbursing 40.000+ � for a car, the outlook of spending my driving time in a sleazy environment was distressing me. Of course, I did have the opportunity to feel, touch, smell the interior materials a couple of times before I ordered the car. But assessing the quality of a dashboard or of a leather upholstery is like testing a spring mattress at the mattress store.  No matter how long you try to figure it out, the only way to be sure is to turn the lights off and literally sleep on it.
Though I have not slept in my car (yet), now, I know. The interior is largely up to the price paid. Comfy, stylish, extremely well finished down to the most minute detail. I am almost ashamed of having doubted.  By the way, my i3 has the Lodge interior (Giga world). 

The i3 is just an overpriced Zoe: (I've been reading this one a lot in the French-speaking press).
For the non-European reader, let me first explain that the Renault Zoe (en.wikipedia.org/wiki/Renault_Zoe) is a sort of cute good looking Nissan Leaf, with a French touch.  Don't get me wrong; I think that the Zoe is a nice little car but, c'me on! 

How can a professional journalist put the i3 and the Zoe on the same footing.  How can you compare the past to the future? A car made of steel to the first mass produced car made of aluminum and carbon fibre?
I wish I were an engineer and be able to explain why and how a car with a CFRP body drives so much better than a conventional one. But I am just a linguist and you'll have to bear with my poor description : in the i3, you're just in control!  

The rigidity of the thing makes you feel that there is nothing the car won't take.  You feel light and super secure at the same time.  If you don't believe me, just arrange your own test drive.

Considering the technology, range is unimpressive:
My take on that may sound unconventional.
More range would have been inconsistent with the concept of �great driving experience in a sustainable way�. If my average daily need is 40, why should I store in my car 4, 6 or even 8 times the energy and resources that are necessary?  

In all fairness though, I must confess that I am still struggling with an instinctual range anxiety.
And this is where technology comes to the rescue. The amount of information that comes through the screens is just impressive. The dynamic range assistant, the Eco-route guidance, the graphics, everything has been thought and designed in order to alleviate whatever range fear that I still could have. And it works. On top of that, the resolution quality of the 10.2" screen (professional nav) is remarkable.

I know that there is a bit of controversy as to why BMW did not include a State Of Charge reading in the i3 as in the ActiveE or the Mini E.  Since I never had the chance to drive an EV with a SOC, I guess that my point of view may be considered as neutral on that.

The i3 is an expensive high-tech toy for tree-hugging geeks:
Yes.
It is.
But it is much more than that at the same time.
It's a car.
With all the features, functionalities, looks, behavior, style, technology and feel of a great car.
And yes, it is electric.

So is my i3 living up to all of its promises?
Not quite all of them, for the moment at least.
In Belgium, some of the much anticipated 360� Electric services have not been fully rolled out yet. The Add-On-Mobility (Access or Alternate Mobility program as it is called on other markets) is still largely undefined and the ConnectedDrive services are having a bumpy debut.  Nevertheless, the local BMWi team is working hard on it.

As far as the actual car is concerned though, I can happily report that I haven't found the least flaw yet.
My i3 is the second BMWi to have been registered in Belgium.
And I am very proud to be among the first owners. 

2/5/14 EDIT:
Toni has had a few people ask him about the range since this post went up so he asked me if I could add these words to the post to cover what he has observed so far:

Hi, thank you all for the the nice words!


As for the range, I haven't pushed it to its limits yet. And I doubt I'll ever try to; I'd rather do away with my range anxiety in a non-traumatic way :)

Apart from the maximum range, I think you have to consider the "comfortable" range the car is giving you. By "comfortable" range, I mean the distance you can cover without ever bothering about modes, driving style or even outside temperature and this includes short highway portions. In the case of the i3 (BEV), my experience of the "comfortable" distance is ~62mi (100 km) on one charge.  Remember that, within this range you can drive the way you want. Of course, this "comfortable" range can be jeopardized by a particularly aggressive and non-responsible driving. But, as far as I know, only anti-EV journalists are capable of driving this way.

If your daily commuting includes larger highway portions and/or represents between 62 and 80 mi (100 to 130 km), then I recommend using ECOPRO. Mind you, ECOPRO is not a sub-standard COMFORT mode. The car behaves much like it does in COMFORT mode with only slight differences. Most of them remain unseen by the driver. The only one you do notice is the max speed capping. This speed capping works much like a speed limiter on a conventional car, i.e. you can adjust it in the settings and override it by pressing the right pedal down to "full throttle" when overtaking or in case of emergency. For Europe, ECOPRO default setting is 110km/h (~68 mph).

If you really need to go much farther than 80 mi (130 km) on one charge in a consistent way, you'll probably have to master hypermiling techniques and accept that the ride may become stressing sometimes :)
In this case, I'd recommend going to for the REx version.

If you own an i3 and would like to participate in the Born Electric series here, you can email me at: tom.moloughney@gmail.com

Sunday, February 2, 2014

XCAR Reviews The i3: The Ultimate Driving Machine?



There are dozens of video reviews of the i3 popping up now but this one seems pretty good so I thought it was worth putting up.

Later in the week I'll have another installment of the "I was Born Electric on..." series. This time we'll be traveling to Belgium to get some insight into how a new i3 owner there is feeling about living the electric life.

Thursday, January 30, 2014

BMW i3 Born Electric Guest Blogger: Meet Hil from Holland


My i3 was delivered to my home on a flatbed truck, more than 300 kilometers (180 miles) from my i Agent. Traveling that distance in an i3 BEV on one charge isn�t possible and the i3 being my first EV, we agreed that the car be delivered! As it stands, I�m probably the first i3 owner in Frysl�n, Holland and I�d like to report on my first month�s experiences!
A while ago I announced that I would be starting a new series here called, "I was Born Electric on...". The series will be featuring readers who are i3 owners and who are willing to share their thoughts on the car after owning it for a while. They will begin the post by introducing themselves and stating the date they were Born Electric, which is when they picked up their i3. Last week we had the pleasure of kicking off the series with a post from Andy, who lives with his new i3 in the UK. We'll now be hopping over to Holland to visit with Hil and his new Ionic Silver i3:       

    Hello, my name is Hil and I was Born Electric on Monday, December 30th 2013. 

My recent BMW history
My BMW before the i3, was a 5 door 118i (F20) which I bought for it�s economy and comfort. It was less the sports car than the Z4M Coupe I had before it, but with more room and an adjustable suspension, it meant super daily driving pleasure! Just after the �1� came, BMW launched their ActiveE program with a preview of the concept i3 and i8 in Rotterdam. With my eldest son Tom (also a motor head!) our short, snowy test drive in the ActiveE sold us to the i concept!

The big wait...
This past summer, BMW made production slots for the i3 available in Holland. An i3 in the autumn? Great! In early September the i3 was ordered and after a few glitches in the ordering process (an other color and not fully optioned!), the i3 turned up in the early winter, on snow tires, in Ionic Silver (which is more blue than silver) and with it�s cool Adaptive LED headlights.


Daily Use:

I use the car mostly for local trips, from one village to the next.  As a rural Family Doctor, it�s great to do my rounds in the pre-warmed comfort of the i3! To now the only EVSE I use is the standard socket plug-in, delivered with the car. It charges at 3.4 kW which is fast enough for my daily trips. Occasionally I make a longer trip to meetings, for post-grad education or visits to family and friends.  Those trips are between 100 to 140 kilometers (60 - 87 mi), but according to my i Agent (and BMW), form no problem to the all-electric i3! For on the road charging, there�s also a growing network of quick DC chargers in Holland, thanks to Fastned!

Adventurous Start:
True to the EV pioneer calling, on New Years Eve, the family traveled with the i3 to our traditional  New Years celebration at good friends. They live 103 kilometers (61 miles) away.  At the start, the i3 gave me a range of 120 kilometers, more than enough! But beware,  this figure is based largely on previous driving habits and I had only driven 70 km! But 120 km should be enough! We left at 6 pm, outside temperatures 5 degrees Celsius with a stiff southwesterly headwind and 3 adults in the car with the trunk packed. My normal ICE driving style is to limit my freeway speeds to 115 kmh (70mph) and on two lane roads, I drive 100 kmh (60mph). That evening I set out to copy my 118i driving style to see how the i3 fared. After 40 km (26mi) the battery had just 50% charge left! What??? Total i3 range as claimed by BMW to be 130 km (80mi) per charge, not a scanty 80 km (50mi)! At this rate we�d have to walk 20 km to our friends house. What now? Turn back and take the reserve ICE car or charge up somewhere?

I knew of a quick charger along the freeway nearby, so we decided to drive on! In the confusion we took the wrong exit and drove an extra 10 km to get back on track.  My first encounter with a public EVSE was a disappointment. Fumbling in the dark with wind and weather. the quick charger didn�t charge! I called the ANWB help desk number (=AAA in the US) who told me that there was a working charging point 30 km ahead on my route. The question again: press on or turn back? Well, we decided to "Go (South-) West"!

By now I had become a bit more EV savvy and after studying the settings and menu of the i3,  it seems I had started out in the standard, uneconomical but sporty �Comfort� mode! In �EcoPro� mode (EP) the range sprung from 55 to 65 km and in the EcoPro+ (EP+) mode, all of a sudden I could go 81 km! I kept it at EP+ and drove on with the Southwesterly storm at full head. On the freeway ahead, a Motor Home drove a leisurely 85 kmh (50mph) so I slid behind it and slipstreamed further. Meanwhile my hands and feet had turned to ice, as had everyone in the car! EcoPro+ is a spartan experience, with no heated air or seats, but it got us to our friends house, with 3 km to spare. We had become true pioneers on New Year�s Eve!

A Second Go�
The next week I had a meeting in Utrecht, at 138 km (84 mi) from home. After the cold experience on New Year�s Eve you might think that I wouldn�t consider an even longer trip. But that�s not what EV pioneering is all about my friends, and to be honest, the first trip turned out fine! But for this trip, I prepared myself. To ward off the cold, I took a hot water bottle along, put it on my lap, covered with a fleece blanket. From the start, I drove moderately (max. 100kmh=60mph) in EP+ mode and strictly followed the EcoPro route chosen by the BMW Navigation. It takes you over roads with lower maximum speeds but the route is shorter. My planned 1st destination was a public charging station 10km (6mi) from the meeting place and I had a folding bicycle in the trunk (yes it fit!) for the last leg. But the range expanded as I drove! I left with a calculated range of 124 km (77 mi) and after the first 25 km (15.5 mi), still had 119 km (74 mi) left! With this kind of magic the i3 grew on me! Once on the freeway I hit headwinds, so chose a truck to slipstream behind at 93 kmh (58 mph) on the cruise control.  Except for some wind buffeting I really enjoyed my radio in the quiet of the cabin! I reached the meeting venue at 138 km (86 mi) without the wayside charge! Range anxiety is a thing of the past!
DC Quick charging at 50kW's on a Fastned CCS Quick Charge Station

In the parking garage there was an EVSE which only charged at 3.4 kW instead of the expected 7.4 kW. After 2.5 hours the state of charge increased from 5 to 27%, not enough to get home! But I had enough range to get to the nearest Fastned DC 50kW quick charger, 40 km away. Within 30 minutes I had more than 90% of charge, enough to get home comfortably. When the Fastned network is expanded from the present 5 to the planned 100 stations at the end of 2014, cross country trips in Holland with the i3 will be no problem! At the end of 2015 the projected planning even calls for 200 stations, one for every 40 to 50 freeway kilometers!

EcoPro EcoPro+ and Comfort:
The difference between Comfort and EcoPro modes is purely performance. The i3 Comfort mode would be the Sport mode in an ICE BMW mainly because of the incredible acceleration! EcoPro differs from EP+ more because in EP+ the Seat and Main Heaters are turned off.  In cold seasons, choosing EP+ mode makes the cabin icy cold, even with a hot water bottle and fleece blanket!

My lesson is: when range is at issue, put the i3 in EP mode but turn the heater off with the dashboard button. The seat heater still works and hardly reduces range, but keeps you warm! If the windows fog, the heater rapidly clears them and when done, switch it off until needed again.

In Conclusion:
Yes, the i3 is the future of mobility, now! It�s quick, quiet, economical and clean! Range anxiety is unnecessary if you drive the i3 according to your purpose (range or fun!) and because this car also happens to be a BMW, that fun begins on your driveway!
 
The future has never looked brighter






Big thanks to Hil for sharing his experiences and thoughts here! If you own an i3 and would like to participate in the "I was Born Electric on..." series here email me at: tom.moloughney@gmail.com and I'll get you in the queue.

Wednesday, January 29, 2014

My New Side Job: BMW i Dealer Training

It's -2 degrees F here in Canada and I'm talking BMW i3 at Budd's BMW in Oakville!

I've written a few posts on my blogs about how poorly many dealerships have done when it comes to selling their electric car offerings. I blasted Nissan and GM pretty good a while back and had hoped that BMW would learn from the mistakes the other OEM's made when they rolled their EV's into their dealers' showrooms. However I'm starting to wonder if that will be the case.

Electric cars are different in so many ways. If the sales team isn't prepared for the onslaught of questions that they are going to get hit with as soon as the i3 becomes available to order, then it will not only hurt sales of the i3 but it will certainly tarnish the BMW brand image. BMW dealers will have an even tougher time than the other brands had in my opinion because the i3 isn't just an electric car, it really is a revolutionary vehicle. Besides the typical EV questions about the car's anticipated range, battery life, battery management, the effects of weather on the battery, charging, etc, they also have to explain the unique architecture with the carbon fiber and aluminum construction and the thermoplastic skin. How will it respond in an accident? How expensive will it be to repair? Why are the tires so skinny and will they perform well? And that's before they even begin asking about the range extender. Can it drive up a long hill at highway speeds? Can I simply refill it with gas and keep going? Why can't it be turned on manually? Does the waste heat from the engine warm the cabin? What is the maintenance schedule? And so on...

I've been working with JMK BMW in Springfield to help get them ready for the i3 also.
When I first heard about the new "Genius Everywhere" program that BMW was launching I really thought they had solved the dealer problem. It sounded brilliant and I figured these "Geniuses" would be thoroughly trained about the i3 and be able to assist a BMW client adviser with any issue or question about the i3 that a potential customer would have. However once I learned a little more about the program I started to wonder. The Geniuses are there to assist not only with BMW i questions, but technical questions on all BMW products.  Yikes I thought, that's a lot of information for them to absorb. Yes, they will have fancy iPads in hand to help them pull up info that they don't know off the top of their head but still, BMW has a lot of vehicles in their lineup now, and even a "Genius" has their limit. Then came the real concerning revelation. I started getting emails and private messages from BMW "Geniuses". They reached me though this blog and the BMW i3 forums on the internet where I post regularly and answer questions about the i3. After completing Genius training they felt they didn't know enough about the i3 to be comfortable, so they were reaching out to me to help answer questions they had. The worrisome part, is the questions they have are basic, generic electric vehicle questions. If they weren't taught this stuff then they will likely be no help at all to the dealers. In fact one person said this when describing how he feels about going to his designated dealership if someone asks him anything about the i3: "I feel like I'm being blind folded while walking into a room!" This isn't good to hear and believe me it gives me no pleasure at all to have to report it.

In addition to the Geniuses asking me for help, I have recently been getting emails from BMW dealerships asking me questions about the i3. They say BMW has promised them support for the i brand, but they haven't gotten it yet and people are now starting to call and come in to ask for i3 and i8 information and they don't have anything. I have even been asked to come to a couple of dealerships to help train the staff. One dealer in particular, Budds' BMW in Oakville, Canada really wanted me to come and give them a crash course in the i3. They flew me to Toronto and paid me to spend the whole day there and instruct three training sessions. I didn't do it for the money. I really just wanted to help them out since they clearly want to establish themselves as the area's premier BMW i dealer. They were willing to go the extra mile to fly me out there and pay me to help train them and I respect that so I went. The day went really well, and I'm sure they learned a lot about the i3. The following day I got emails from both the dealership manager and the owner and they both thanked me and were so pleased with how the training went they indicated that they would like me to come back to help them more once they get closer to the i3 launch. I have to say they were all really great people up there and I will certainly continue to help them if they ask.

It's not too late to get everybody up to speed, but the clock is ticking. The i brand launches in a couple of months and there is a LOT of ground to cover. I'll continue to help out when I can and in fact I have another dealership training set up for next week. I won't mention which dealer because I didn't ask them if I could talk about it.  Budds' was fine with me talking about this, and they really should be in my opinion. I commend them for wanting to be prepared. They are obviously a forward-thinking, progressive dealership that wants to have a competitive advantage and I really respect that. The next few months should be very interesting. I guess I'll know how well BMW is doing in preparing their dealer network for the i3 by how many phone calls for help that I get! I really hope they do it well. BMW put so much into the development of the i3 and i8, it would be a shame to have them do poorly because they didn't help their dealers get prepared for these unique and ground-breaking, cars.

Sunday, January 26, 2014

BMW i3: Tax Credits and Leases and Residuals, Oh My!

Will BMW's financing options put the i3 out of reach for many of its enthusiasts?
There have been many discussions on various websites since an internal BMW document surfaced that led to people to believe the BMW i3 lease terms in the US would be very high. One potential i3 buyer even has his local dealer (Stevens Creek BMW) work up a lease quote using the information on the document. The i3 he built had a total price of $55,978.52. With very little money down the lease payment came out to be $930 per month. There were a couple things that led to this very high lease estimation and I thought it would be worth while to discuss them here.

The proposed i3 lease was posted by insideevs.com
First, the residual values on the document were very low, around 40%. Unfortunately this is basically in line with residual values of other electric cars and there are basically two reasons for it. First, electric cars are new to most people and there is a lot of uncertainty regarding what the secondary market will be. What will a 3 years old i3 with 40,000 miles be worth? How much will the battery have degraded? What will its practical range be at at that point? Until we have years of EV use behind us with tens of thousands of examples to draw data from, finance companies will likely err on the side of caution and offer low residuals on EV's. Then there are the tax credits and rebates. California is the largest market for EV's in the country and basically paves the way for everywhere else. EV's buyers in California not only get the $7,500 federal tax credit, but they also get up to a $2,500 State rebate. Therefore a used EV is instantly worth $10,000 less than a new one as soon as it rolls out of the lot.  So to be fair, you really should include the tax incentives and rebates in the equation when you discuss electric vehicle residual values, because that is the actual effective cost of the car to the buyer.. If you do that, the i3 residuals jump up to nearly 50%. That is still a bit low, but not really far off of what a typical car would be worth after a three year lease. 

The tax credit is now a center of debate
The document also showed that BMW is only going to apply $4,875 of the expected $7,500 federal tax credit as a capitol cost reduction to leases. This led some people to assume BMW is simply pocketing the $2,625. I raised this question to Timm Bock, Product Development & Pricing Manager for BMW Financial Services and he told me that BMW will only realize $4,875 for the federal tax credit and that they will pass every cent of what they get along to the customer. I still don't know exactly why they don't get the full $7,500 because it seems the other EV manufacturers do since they pass it along to the customer as a capitol cost reduction in their lease offerings. So either they get more than BMW does which would be surprising, or they are eating the $2,625 in an effort to push their electric vehicle offerings. This to me would be equally surprising, so I really don't know what the truth is at this point, but I will continue to investigate this. 

Timm was kind enough to also include an overview of the financing options BMW Financial Services will be offering for the i3, and this is what he sent me:
Tom,

Please see my response below regarding the Lease and OwnerChoice products you had asked about, as well as how each product relates to the Federal EV Tax Credit when purchasing a BMW i3.

Traditional Lease - Our tax team has advised us that each leased BMW i3 qualifies us for a Federal EV Tax Credit of $4,875 - all of which is passed on to the consumer.  This $4,875 Lease Credit can be directly applied as a Capitalized Cost Reduction, or to other costs, at the time of lease-signing.  Regardless of your tax situation, by choosing a BMW FS lease with the $4,875 Lease Credit, you'll know exactly how much you will benefit, it�s applied at the time of purchase and there is no subsequent filing, administration or personal tax implications.
(As a reminder, only EVs purchased for personal use are eligible for the maximum $7,500 tax credit.  However, the benefit is reduced to $4,875 for 100% business use.  Regarding Nissan and Chevy, we can�t speak to why they are choosing to offer $7,500 or more; this may be part of the their incentive or discount strategy.)


But for customers who want to claim the maximum tax credits, we have made attractive alternatives to leasing available:  OwnersChoice and OwnersChoice with Flex.

OwnersChoice � OwnersChoice provides:  low lease-like monthly payments, the lease-like option to return the car at the end of the term AND the eligibility for you to claim the maximum income tax credits.  

OwnersChoice with Flex - In addition to the OwnersChoice benefits above, OwnersChoice with Flex allows you to increase your final balloon payment due at the end of the contract term by up to $7,500. Increasing the final balloon payment due further reduces your monthly payments, and in this way provides you with the opportunity to benefit from the $7,500 immediately.  OwnersChoice with Flex bridges the time-gap between the vehicle�s purchase date and your tax filing date.  We are proud to say that BMW FS is the first in the industry to develop an enhanced balloon finance solution like this for EVs. 


BMW Financial Services will also offer our traditional loan product.  Like both of the OwnersChoice products above, a BMW FS loan provides you the eligibility to claim the maximum $7,500 Federal EV Income Tax Credit.  


In general, due to the uncertainty and complexity of tax credit rules, we encourage anyone considering an EV to consult with a tax professional.

While this doesn't really clear up the tax credit questions, it does give some clarity on the OwnersChoice with Flex product that they developed specifically for the i3. This will allow a buyer to get the full $7,500 tax credit, yet still return the car like a lease at the end of a predetermined period. It's a purchase, but allows the buyer to have a capitol cost reduction up to $7,500 (the customer decides how much they want BMW FS to deduct as a cap cost reduction) to lower their monthly payments. That money is then owed to BMW FS and the owner can pay it off anytime they want. The owner will then have the option of making a balloon payment equal to the residual value plus the additional $7,500 and buying the car outright, refinancing the balance and keeping the car, or simply paying back the $7,500 and returning the car as if it were leased. 

There is interest charged on the $7,500 cap cost reduction they applied that is baked into your monthly payment, but BMW will allow you to pay it back early and save on the interest expense. The best way to utilize the OwersChoice with Flex may be to pay the $7,500 up front when you take delivery of the car, therefore you'll never have paid a penny of interest on it. Of course you'll need to have the finances to do this, but since you'll be recovering the $7,500 a few months later when you do your taxes, you will only be a short time without the funds. (provided you qualify for the full tax credit)

I hope that provides a little insight into the OwnersChoice with Flex. However, admittedly it doesn't get us any closer to really knowing what leasing deals BMW will be offering. Until we get the official residual values, interest rates and terms, we're all just guessing. I just hope people don't expect the i3 to have leasing deals that are comparable to some other much less expensive EV's like the LEAF or Volt, let alone the great deals on some of the other manufacturers compliance EV's. These cars are subsidized by tens of thousands of dollars per vehicle just so the manufacturer can lease the minimum required be California, in order to continue to sell their gas cars there. BMW has been consistent with saying the i3 is going to be profitable from day 1, and BMW will not subsidize it. This will likely make the i3 more expensive to lease in California than a Honda Fit EV, a Fiat 500e or a Toyota RAV4 EV. However for the rest of the country this comparison really doesn't matter because those cars aren't available nationally like the i3 will be.

Personally I expect to BMW to announce the financing details pretty soon, like within the next couple weeks and I will certainly post them here. There is hope that BMW may surprise up with a good leasing deal after all though. This week at the NADA convention in New Orleans BMW's North American CEO Ludwig Willisch said "It will be an attractive lease offer" and "It will be in the ballpark of a normally equipped 3 Series". A friend of mine recently leased a pretty well equipped 328i and with $3,000 down and he's paying $415/month. I find it hard to believe the i3 will lease for that low, but I suppose it's possible on a base BEV i3 without any options. I'll pick this back up here once the details are revealed.