BMW Lifts i3 Electric Car Production to Meet Rising Demand

Apr 15, 2014 7:22 am ET

(Updates with analyst comment in eighth paragraph.)

April 15 (Bloomberg) -- Bayerische Motoren Werke AG, the world’s largest maker of luxury vehicles, has increased production of the i3 electric city car 43 percent to meet demand that has exceeded the carmaker’s initial expectations.

The premium manufacturer in recent weeks has raised daily output to 100 vehicles from 70 previously at the factory in Leipzig, Germany, where the model is assembled, Harald Krueger, BMW production chief, said in an emailed statement to Bloomberg.

BMW has already built more than 5,000 i3s since the start of the year, Krueger said. The current production rate translates to about 20,000 vehicles for the full year, almost twice as much as BMW’s initial sales forecast.

BMW began rolling out the i3 last November and will begin bringing the i8 hybrid sports car to market in June. Both vehicles have a carbon fiber chassis to cut weight and improve fuel efficiency. The Munich-based automaker said in February that it’s building a second production hall at a jointly run plant with SGL Carbon SE to boost assembly of the material.

“Following the market introduction in Europe, we’re now rolling out the i3 in the U.S.,” Krueger said in the statement. “The U.S. will be the largest market for the i3.”

BMW gained as much as 43 cents, or 0.5 percent, to 90.57 euros and was up 0.3 percent as of 1:21 p.m. in Frankfurt trading. The stock has climbed 5.8 percent this year, valuing the German manufacturer at 57.9 billion euros ($79.9 billion).

Bold Move

Chief Financial Officer Friedrich Eichiner said in October the company was considering a production increase for the model after early demand exceeded expectations. BMW said at the time it had 11,000 orders for the compact car, which will cost $41,350 in the U.S., and aimed to sell more than 10,000 in 2014.

“BMW invested a lot of money” on their electric-car push and using carbon fiber, said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “It was a bold move, but it also bears some risk as production is complex. They need to make this work.”

Audi AG, the world’s second-largest premium automaker, is adding plug-in hybrid versions of already existing models as the reach of purely battery-powered vehicles remains a concern for many car buyers. The unit of Volkswagen AG, Europe’s largest automaker, has largely restricted the use of carbon fiber to cars of its high-performance sister brand Lamborghini.