Global Crisis

My i3 REx. Will it now cost me $3,900 more than my contract calls for?

It what can only be categorized as a major misstep, BMW of North America has announced that the i3 with range extender is not tax exempt in the state of New Jersey as what was previously reported. Back on January 27th, BMW of North America manager of Electric Vehicle sales and strategy Jacob Harb told his client advisers on a conference call that the i3 REx would be treated as a zero emission vehicle in New Jersey, and qualify for the state's Zero Emission tax exemption. That was big news at the time for New Jersey residents including myself, and was one of the final deciding factors for me to actually choose the REx version over the BEV i3.

"The sales tax exemption in NJ only applies to zero-emission vehicles--and as such, does not apply to the i3 with range-extender as it does not apply currently to any vehicle with an internal combustion engine."... "Any assumption that the i3 with range-extender would qualify was premature" 
Dave Buchko, BMW's product and technology communications


The misinformation was further reinforced at the BMW i3 dealer training event held at BMW headquarters in Woodcliff Lake in April when the client advisers were again told that the i3 REx would be sales tax exempt in New Jersey. Now that BMW has begun delivering i3s with the range extender in the State since last week, the dealers haven't been collecting sales tax on the cars since they were instructed that they didn't have to. I'm one of the people that took delivery already and didn't pay sales tax. It's unclear if BMW is going to now ask me to go back to the dealer and pay the additional $3,900.00 I'd owe for sales tax. I'm not even sure they can do that. I have a signed contract that is paid in full and I wonder where the law stands on this. I don't even know if I'd want to keep it if I have to pay the sales tax now. Don't get me wrong; I love the car, and I think the REx is a great option, but this will double the cost of the range extender. Instead of it costing me $3,850, it will cost me about $7,750! It really is a great option and so far I have loved how well it works, but it's just not worth $7,750 in my opinion. I could buy a good used second car for less than that and use it for the long trips I need to take.

Then there are the people that have an i3 REx on order here in NJ and haven't taken delivery yet, what will they do? At the last minute they find out the car is now costing them nearly $4,000 more! My good friend Chris Neff's car just arrived at the dealer yesterday and he's planning on picking it up as soon as possible. I wonder how he's going to react to it now costing him nearly $4,000 more! My client adviser Manny Antunes of JMK BMW has nine i3s with the REx options on order for customers. How many will cancel their order when they find this out? I bet at least half of them. What happens to the people like me that have signed contracts, and paid for the car already? I wonder where the law stands on this? Can we now be forced to pay more than our contracts stipulate? Personally I'm not sure what I'll do if I'm told I have to pay the $3,900 now. Will BMW NA eat the extra cost for the few people that already took delivery of their REx in NJ? Will they push it on the dealers? Perhaps this was a sign that I was really meant to get the BEV i3 after all. I've already tinted the windows and now my car is being wrapped a new color at Designer Wraps down in Millville, NJ. Will JMK BMW end up with a custom-colored, Electronaut Edition i3 REx to sell as I wait another few months for a new i3 BEV to be made and delivered? This is going to be very interesting, stay tuned!

The i3 in Solar Metallic Orange

There has been a lot of speculation on the i3's price. A few days ago Autoblog posted a story that claimed they had confirmation the i3 would cost $34,500. However today Dave Buchko, a spokesman for BMW North America told Edmunds Automotive this in a telephone conversation: "The base price of the i3 in the U.S., not including the tax incentive, will be in the low-to-mid-$40,000s"

So while Autoblog wasn't correct, they may not have been entirely wrong. The i3 will qualify for the maximum electric vehicle Federal tax rebate of $7,500. Therefore if the base price is $42,000, than the effective cost would be exactly what Autoblog said it would be, $34,500. Hopefully we'll get official pricing as well as technical information at the i3 World Premier on July 29th. 

For the full Edmunds story, click HERE.

The BMW i3 range extender engine which is made by Taiwanese manufacturer Kymco for BMW.

There is still a lot of unknown information about the i3. BMW has been extremely conservative about what information they offer. While they have stated it will have an electric range of 80 to 100 miles and cost about the same as a nicely equipped 3-Series, the two biggest questions still remain: What will the EPA range rating be and exactly what will it cost? However right behind those two questions for many people is: What will the performance be when the range extender is in use?

The range extender engine will be a 650cc Kymco engine borrowed from the BMW C650 GT scooter. It will be highly optimized to lower noise & vibration and will only put out 35hp, compared to its 65hp when used for the scooter. The gas tank will be a miniscule 2.8 gallons and BMW has stated it will extend the range of the car about another 90 miles, effectively doubling the cars range. However many journalists are wondering will that added 90 miles be an ultimate driving experience or the ultimate disappointment?

The REx will fit nicely next to the e-motor

The Chevy Volt is the closest vehicle to compare the REX i3 to, even though it's not exactly an apples to apples comparison. The Volt has a 1.4 liter gas engine that puts out 80hp to power the generator, more than double the output of the i3's gas range extender engine. However the Volt weighs 1,000lbs more than the i3 will and isn't nearly as efficient so it would naturally need a larger, more powerful range extender engine. The Volt's robust range extender allows it to drive uninhibited while the range extender is maintaining the car's charge. The million dollar question is will the same be said about the i3? That answer looks like it will be no, it won't. BMW's Product and Technology Communications spokesman, Dave Buchko said of the range extender: "The i3 range extender is meant to enable the car to go a little further than the pure BEV on those rare occasions when driver needs to go a little further. It is not intended for daily use. We've said that the REx [range extender] will double the effective range of 80-100 miles. I have not seen anything to suggest that it would not be capable of doing so.". Then BMW North American CEO Ludwig Willisch said while the range extender is running: "The car will not be as agile," Willisch said. "It will not have full power when it runs on the combination."

I'm not exactly sure what "not intended for daily use" means though. That sounds like you'll break if you use it every day and that's obviously not going to be the case. Will the cars performance be so inhibited while in REx mode you wouldn't want to drive it that way every day? I find it difficult to believe BMW would add the range extender if it was so weak it offered terrible performance while in use. Willisch must have confidence it will perform admirably in REx mode though because he predicted at least 80% of US i3 buyers will order it with the range extender. I've also heard it described by some as a "limp home mode" by some(not BMW people) and I also don't believe that is accurate either.

An i3 with the range extender was caught at a gas station refueling in this spy photo. The gas filler door will be located on the front passenger quarter panel and the charge port will be on the rear passenger side quarter panel, just above the wheel.

A big determination of how it will perform in range extender mode is how much of the battery the car holds as a buffer when the range extender turns on. Lets say the i3 normally only uses 90% of its 22kWh capacity. That means the all electric i3 will utilize about 19.8kWh's. If the REx i3 holds another 10% as a buffer to help with short bursts of needed energy than the range extender will turn on after using only 17.6kWh's of the 22kWh pack. This will allow the car to perform better when in REx mode but it will also mean the car will drive about 10 miles less on electricity. The larger the buffer the better the REx performance but the shorter all electric range. I hope BMW allows you to turn off the REx for those times when you could make your destination on pure electricity if you only need a few miles after the REx would have turned on. That way you could utilize the full ~19.8kWh that a BEV i3 has available, without reserving the buffer needed for the REx since you don't intend to need it. Of course the percentages of the battery pack utilization I'm using here are just guesses on my part, but I expect them to be pretty close to reality.

My guess is it will be pretty much in between the hobbled horse and "ultimate driving EV" when the range extender is in use. I think it will drive fine on flat terrain, and can probably even drive along at 70mph in those circumstances. However introduce an extended incline or times when you need to go 75 or more to keep up with traffic and the car could quickly find itself gasping for enough energy to maintain its motion. It definitely won't be a "It'll get you home but you'll have to crawl along at 30mph" but lets just say you'd lose if you try to autocross in REx mode. Then again, if BMW does reserve a fair amount of the battery back as a buffer, it could perform very well for the first 20 miles or so, before the stored energy gets to a minimum and the REx is working at maximum output to sustain the charge level.

The bottom line is if you really just want the security of knowing you'll never have to call a tow truck to get home, then the REx will be worth its weight in gold for you. I've been there on the side of the road a couple times in the past four years falling short of my destination so I know it will be a valuable asset for those circumstances. However if you plan to use the range extender to drive hundreds of highway miles to make a far off destination, then I'm guessing this isn't the right EV for you. Horses for courses. Hopefully, we'll get the answers to these questions and all the technical specifications of the i3 soon. It launches in Europe in the fall so the wait is nearly over.

There are lot of unknowns with the i3. BMW has been very careful to only leak out small details, much to the chagrin of journalists and enthusiasts interested in the car. However the most sought after piece of information that everyone wants to know is how much will it cost?

It seemed like we finally got some clarity on that a couple days ago when Diana Kurylko of the Automotive News wrote a story that claimed the i3's would be "priced at about $40,000". The story was of course picked up by many other outlets and suddenly everywhere you looked on the internet you saw "BMW i3 to cost $40,000". I was skeptical of his from the start. While I have no official inside information on what the price will be I do not believe it will be as low as $40,000. I'm thinking $43,000 to $45,000 as the base price, with options like the range extender and premium electronics packages pushing the price up to and even over $50,000.

Willisch handing me the keys to my ActiveE

So after re-reading Kurylko's piece a few times, it became clear to me that she came up with the $40,000 figure herself, not from anyone BMW. During her interview with BMW NA CEO Ludwig Willisch, he told her the i3 would be priced "roughly the same as a well-equipped 3-series sedan" and Kurylko added the $40,000 herself, assuming that is what a well-equipped 3-series sedan costs. Only she was wrong. A well equipped 3-series costs closer to $45,000 depending on what you consider well equipped. Realizing this I posted my doubts on the BMW i3 Facebook group page and opened a thread for discussion. John Voelcker of High Gear Media, one of the leading journalists in the US covering electric vehicles, was the first to comment and I could see he was interested in getting the facts straight. He later posted that he contacted BMW spokesman Dave Buchko to follow up on the Automotive News piece and Buchko cleared things up a bit, reiterating that Willisch only said the i3 would be comparably priced to a well-equipped 3-series and didn't offer any specific price, and that such a car costs more than $40,000 He actually said a well equipped 3-series "falls more in the $45,000 to $50,000 range." Voelckers entire follow up story in GreenCarReports can be seen here.

So the hope of a $40,000 base i3 price was short lived. Personally I never thought the price would be that low. I believe it will be in the $43,000 to $45,000 range before any tax incentives so the final cost on a base i3 without options should be under $40,000 after the $7,500 federal tax rebate for those that qualify. Add a nice array of options and the range extender and you're probably talking $52,000 -$53,000, or about $45,000 after the federal tax credit. Final pricing probably won't be announced till after the i3's official debut at the Frankfurt Auto Show in September.