Friday, September 20, 2013

“BMW Tests Light-Weight Assembly for Electric Cars”

http://online.wsj.com/article/SB10001424127887323981304579081564191254956.html?mod=WSJ_auto_LeadStoryCollection
September 18th, 2013

Through its production of the new carbon fiber and plastic cars, BMW is launching its new Project i cars meant to compete with current electrical and steel cars. Although the lithium battery is very expensive, the new i3 city car and i8 plug-in hybrid sports car are the first of its kind and ultra light. BMW is attempting to reinvent a cheaper mass production of automobiles to compensate with the uncompetitive batteries. The i3 is being introduced at $41,350, while the i8 is at $135,000. Overall, BWM’s Project I factory is costing $534 million.

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With the redesigning of the production, the i3 will have 100-120 separate parts, compared with about 400 parts of a steel body car. Having the underbody of carbon fiber and a plastic exterior makes the production of the i3 and i8. Not only are the Project i cars not requiring rust proofing (since it is made out of plastic), but the paint shop cost about $50 million, a fifth of the normal price for the paint systems of steel cars. Additionally, these i cars use about 70% less water and half the electricity than a steel car would in its factory.

BMW is trying to be innovative in the mass production of environmentally friendly cars, however they need to consider the future cost of the plastic being used and the regulations from other countries. Recently, most carmakers have been hammered by regulators world wide to convert the steel cars to electric cars. With BMW’s new approach to producing cars, the regulations for plastic must be considered. Will these cars eventually generate more trash globally? Will they last forever? Granted, the cars seem to be better for the environment since the production uses 70% less water and half of electricity, but will BMW pay for this in the future? A manufacturing consultant with Oliver Wyman Group, Ron Harbour believes that most companies will have “some kind of skunk works project going to come up with the mass reduction they need” to meet the required fuel efficiency standards. BMW should consider the international environments of these plastic covered cars could encounter in cold and hot extremes. If BMW is successful with this new venture, they will have a huge competitive advantage. Although the battery used in the Project i cars is expensive, BMW executives believe that these care will eventually be profitable. Will the time it takes for the Project i cars to become profitable cause BMW to loose international appeal? This could be a huge change in the automotive industry, however the risks of these cars should be considered by BMW in both their national and international markets. 

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