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BMW Buys Leasing Firm To Launch Its i Series Electric Cars


BMW has purchased the car-leasing unit of Dutch banking giant ING for a reported $1 billion. The move enables BMW to expand its fleet operations, but more importantly, it gives the automaker the ability to aggressively promote the launch of its i Series electric cars via leasing options.

Industry analyst Maryann Keller, of Maryann Keller and Associates, feels the move will help address consumer concerns over the residual value of electric cars.

“Why buy a first-generation electric car when… the technology is likely to be obsolete in three or four years?" Keller asked. "It’s easier to get people to make a monthly payment."

Growing their base of fleet leases will also help BMW promote early adoption of their electric cars, a lesson learned with its ActiveE Electric Car. Automakers with leasing operations can subsidize the cost of electric vehicles, making them more attractive to fleet customers.

That may be a moot point, since European companies with vehicle fleets are under increasing pressure to reduce carbon dioxide emissions. Even if electric vehicles aren’t suitable for all applications, it’s likely that they can be used to replace a significant number of gasoline or diesel powered vehicles on leases in the EU today.

BMW is hardly the first automaker to consider leasing or other direct-distribution schemes. Smart launched a car-sharing scheme called Car2Go in Germany in 2008, then expanded it to Austin, Texas, the next year.

And BMW itself said this spring that it would pilot its own car-sharing scheme in Germany. Executives hinted at the time that it could well be expanded to the United States later on.

[The Detroit News]

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Comments (5)
  1. "the technology is likely to be obsolete in 3 or 4 years"?

    I wonder if that is true. When I look at Toyota RAV4 EV from 2003, I don't really see it as obsolete. Sure it uses NiMH batteries rather than Li-Ion, but it still works 8 years later.
     
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  2. @John B, I thought the exact same thing, but I believe the writer was referring to the mistaken perception by so many consumers that EVs will be problem-laden and aren't worth it now since it's an evolving or transitional technology now. Just a guess, though, since although there are improvements being made, of course, I don't see anything in a LEAF, Volt, or other EV/BEV/BHEV/EREV being obsolete that quickly.
     
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  3. The thing that would make both the Leaf and the Volt obsolete instantly is a major breakthrough in battery technology. Now I don't see any miracle batteries on the horizon, but Nissan has already suggested it will offer improved battery tech by 2015 offering almost double the range at the same price. If that happens in four years time a 2011 Nissan Leaf will be about as desirable as a four year old laptop. I doubt that it's really the desire to protect consumers against sudden depreciation that lies at the heart of BMW's lease plans though. Probably more to do with squeezing the maximum profit from a product that won't generate a steady stream of after sales as much as the old ICE's.
     
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  4. @robok2, you are correct. I was quoting Maryanne Keller, who in turn was echoing the sentiments of the "average" car shopper.
     
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  5. This sounds like a smart move on behalf of BMW. I am apprehensive about buying an electric car, but I am more likely to lease one.
     
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