BMW Set To Double EV Sales By 2021

The German automaker announced that it will meet its target of marketing 25 electrified vehicle models by 2023 two years earlier than expected. More than half of those models will be fully electric.

Sales of BMW’s electric models are expected to increase by 30% every year between now and 2025, the carmaker also added.

https://www.cnbc.com/2019/06/25/bmw-set-to-double-electric-vehicle-sales-by-2021.html

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The business model of BMW is to build (very expensive) luxury autos and then lease them to customers for five years.  During that lease BMW offers a bumper-to-bumper warranty.  For work outside of warranty, BMW charges 130 Euros per hour, maybe more, depends on dealer.  Thus nobody buys a used BMW except at a huge discount. 

In the USA, a new BMW 7-series will sell at about $93,000, so you have these cars being leased.  At turn-in, the residual value is calculated at $18,000.  That is a huge hit for a 5-year-old car.  Some will be re-marketed as "BMW-certified" used cars, but the bulk go to auto auctions where other retail dealers will buy them. The problem for the customer is that there is no longer that wrap-around warranty, and the customer is on his own.  To illustrate, I once picked up a used "7-," and it developed one defective pin in the wiring harness at the engine ECM connector.  I had to replace the harness:  $1,263, tax extra.  To install, it cost me another $5,000 in shop labor.  So that comes to $6.2K to fix one corroded wiring pin.  

Now BMW proposes to go into a new field of engineering, the all-electric BMW.  That might work for the original lessees.  It is not going to work for the next generation of buyers, those that pick up used cars.  I predict BMW will fall flat on its face in this, as their customers are not going to be buyers of used electrics with unknown repair profiles (and bills). 

Who is going to be the purchaser of a used BMW electric?  And if there are no buyers, then does BMW enter the bankruptcy courts, when it cannot unload the lease turn-ins five years down the road?  This is a business model that reeks with problems. 

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I think used EV's will be as popular if not more, than used gas and diesel cars.

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