Snazzy electric car made headlines, but fails to hide German car giant’s consistent blocking of EU emission standards
(Pic: BMW)
By Ed King
Six catchy words formed the basis of BMW’s recent i3 electric car launch: ‘some fear change, others drive it’.
The i3’s innovative carbon fibre and wood frame weighs 1224kg, accelerates from 0-90km per hour in less than seven seconds, and retails at a reasonable $41,350.
All impressive statistics, and all presented with BMW’s usual flair and precision at launches around the world.
Readers of London’s Evening Standard newspaper on July 30 would have been forgiven for thinking BMW had invented electric cars, such was the coverage.
But what makes the i3 publicity especially interesting is that BMW appears to have been quietly blocking efforts within the European Union to promote the production of energy efficient cars.
Far from driving change, many accuse the car giant, which turned over $99.74 billion in 2012, of using every tool in its garage to cripple EU efforts to introduce new car pollution limits.
“BMW and Daimler are at the forefront of moves in Germany at getting Angela Merkel’s ear on the matter,” said Cecile Toubeau, a policy officer at the Brussels-based Transport and Environment NGO. “They have problems. They sell very big, heavy, polluting cars.”
Proposed regulations would see new European cars required to emit no more on average than 95grammes of carbon dioxide per kilometre by 2020, an improvement on the current target of 120gCO2/km by 2015.
Political power
This policy was expected to have been agreed by EU leaders at the end of June 2013, but German Chancellor Merkel cut a deal with British Prime Minister David Cameron to block its progress.
Merkel’s logic is fairly simple. With elections scheduled for September, she did not want to be seen harming the German car industry. And BMW’s hierarchy let her know this is how any EU deal would be portrayed.
One Brussels insider, who declined to be named due to ongoing EU negotiations told RTCC: “BMW’s influence with the [German] government is very strong – it’s incredible”.
Jurgen Pieper, a European automotive expert at the Frankfurt-based Metzler Bank, sees the i3 as part of a wider push by BMW CEO Norbert Reithofer to shift to “greener cars”, but says it’s not a sign of a wider change in direction.
“As BMW still earns a lot of money with its traditional gasoline and diesel cars, it is lobbying at the same time for higher CO2 targets,” he told RTCC.
Super-credits
Analysts believe the EU will rubberstamp an emissions limit after the German elections, but there is still considerable concern that BMW, Daimler and Audi will try and weaken the proposals.
One way is through the allocation of ‘super-credits’. This is a way of rewarding companies who invest in low carbon cars with offsets on their more polluting models.
In its most basic form, if a company produces one electric car (EV) it can ‘offset’ the emissions from a petrol or diesel vehicle.
But a ‘multiplier’ formula pushed by BMW and its allies means one EV could account for two or even three conventional cars, a plan Cecile Toubeau says would undermine the whole concept of setting emission limits.
“On the one hand you have BMW who came out saying how green they are, and on the other you have them devising the super-credits scheme that means they fundamentally don’t have to change anything they are doing,” she said.
“They can bring out a car, market it and help improve their brand, but the reality is they don’t have to shift high numbers to be able to continue selling the gas guzzlers they sell.”
Our Brussels insider agrees with this analysis, but points out that other car makers like Ford and VW are happy with the EU proposals, because their products are already at the lower end of the pollution scale.
“BMW and Daimler have been strongly trying to water the regulations down, and introduce flexibility instruments like super-credits,” they said.
“If you look at it from their point of view it makes sense, because BMW and Daimler have a very different fleet compared to other manufacturers.”
The evidence suggests that in the words of its advertisement, BMW does fear change, and is willing to go to extreme lengths to ensure it happens as slowly as possible.
Mobility solutions
On this basis it’s easy to dismiss BMW’s new electric cars as an expensive form of ‘greenwash’, but other analysts say this would be unfair, and inaccurate.
One of the more interesting components of the i3 is the range of mobility solutions its purchase offers to drivers, who are not just getting a car, but access to other vehicles and software to make their travels easier.
Peugeot and Daimler have similar schemes, but Peter Fuss, E&Y’s Automotive Leader in Germany, says the i3 is a sign that BMW is planning for 20-30 years time, when a car will be important but only as part of a package of services.
“The customer is changing, and requiring more of this. They no longer want to own a car – they want to move from A-B in the most cost efficient way,” he told RTCC. “That means car sharing and integrated mobility, smart mobility. BMW calls it 360 degrees mobility.
“When we look back in 20 years the launch of the i3 may be a revolution, because it is changing the whole concept of the industry.”
Fuss believes the launch of a larger i8 model in 2015 will take BMW another step down the road of this ‘evolution’, which he suggests could see leading manufacturers and megacities working in harmony to develop emission free infrastructure.
BMW’s reluctance to ditch its range of high emission ‘premium’ vehicles suggests it is far from ‘going green’, and still wedded to the conventional business model of car ownership, but as cities absorb more people this may – as Fuss indicates – become unsustainable.
“When you see people living in London, New York and Amsterdam attracting business, part of this is who provides the best living environment and mobility,” he said.
“When you combine this it is not just selling cars any longer. There is much more required. Who owns the mobility of the future? Car manufacturers, google, apple or leasing companies?”
Perhaps in this aspect alone, BMW, which boasts of manufacturing the ‘ultimate driving machine’, may be slightly ahead of the curve.