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Why BMW is hitting pause on its innovative i cars

Car companies like to talk about the future, about disruptors and game-changers and innovation. But that's usually all it is: talk.

Business is booming, sales are up, why mess with a winning product?

BMW did. The German company invested undisclosed billions to design, develop and mass-produce the most innovative, forward-thinking automobile to date: the i3. That was 2013. And yet, so far, it hasn't disrupted anyone or changed any game. Since then, BMW i has gone silent.

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What happened to it, the brand meant to deliver slick carbon-fibre electric vehicles to the masses and future-proof BMW?

"I think we were ahead of the curve and it didn't quite yield the results we were hoping for," said Rich Steinberg, manager of product planning and strategy for BMW North America. "So there was some head-scratching and hesitation to reinvest."

Meanwhile, other brands have hogged headlines. In Paris earlier this year, Mercedes showed an electric SUV called the Generation EQ. In Los Angeles last month, Jaguar revealed the I-Pace, a wild-looking electric SUV with similar range. They'll arrive in 2019 and 2018 respectively with U.S. EPA-rated ranges around 350-400 kilometres. The compact Tesla Model 3 sedan, with 350 km of range, will be on the road at the same time, for about $47,000. Chevrolet's Bolt hatchback will be on the road before all of them, in 2017, for $43,000 with a 380-km range. The i3 was indeed ahead of the curve. As a compact electric five-seat, four-door with a complete carbon-fibre body structure, it was unlike anything else. None of BMW's competitors has signalled their cars would have lightweight carbon-fibre bodies to offset the weight of heavy batteries. In many ways, the i3 is still ahead of the curve.

So what happened?

"It's not an autopsy; it's still alive – but [the i3] is polarizing in appearance, it's a bit pricey, fuel prices [are low], range remains a concern," Steinberg said.

"The i3 was originally the 'Megacity car.' And there was this whole study in Paris and London, and all these evaluations about what it's like to have a car in an inner city. That's not L.A. and New York City; you don't drive around New York City. You take Uber. You take a taxi. So you could argue that some of that initial premise put us in a particular direction to develop the car, but didn't necessarily resonate with the buyers at that time, or in this place."

So the strategy for i Division is to hit pause? "I don't know if it was a strategy, but that's how it works," he said.

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Project i will live on as a distinct sub-brand though. Other than Tesla, BMW is still the only luxury-auto maker with a pure electric car in showrooms.

While there has been no sign of an i5, the i3 will get an upgraded battery for 2017. BMW claims that at -10 C, when battery performance is at its worst, the upgraded i3 will run for about 150 km, and up to 200 km in summer. However, the new battery is an optional extra, adding to the i3's $45,500 base price.

For now, BMW will focus on plug-in hybrids that combine gasoline engines and battery power under the i Performance umbrella. Audi, Mercedes, Porsche, Volvo, Chevrolet, Toyota and Hyundai offer similar cars. BMW has the 330e, 740e and X5 40e, which Steinberg said is beating sales expectations in the United States, moving 450-500 cars a month.

BMW announced the next i Division model won't arrive until 2021. Dubbed iNext, we don't know much about it, other than it will be a showcase for the latest autonomous- and electric-driving technology.

"INext is going into a segment where there are plenty of buyers," Steinberg said. That means it'll likely be a family-friendly SUV/crossover.

How important will that car be for BMW i? "It's crucial. We need that to be a super success," Steinberg said. "It's been proven – not by us, but by others – that there are premium customers that not only accept, but they love, driving an electric car."

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Thank Tesla for that.

"And you could argue that's a direct threat to core BMW clientele" Steinberg said. "For us to say, 'Okay, that's somebody else's business and they can take it' – of course not."

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