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Production of the BMW i3 May Increase Due to Staggering Demand

2014 BMW i3

BMW currently stands as the largest luxury vehicle maker in the world. But thanks to its latest eco-friendly cars, the automaker is poised to become even bigger.

Thanks to a tremendous response to its new i3 electric car and a wave of customer reservations, BMW is already considering increasing production of its electrified city car. While it has yet to reach showrooms, the i3’s innovative all-electric powertrain and pint-sized dimensions have appealed to consumers throughout Europe, where it’s due to arrive in showrooms next month.

More than 8,000 units have been reserved across the pond, where it will retail for $41,350 here in the U.S. It’s a positive sign considering that most automakers have struggles to garner sales of electric vehicles to this point.

“If demand holds, which is what it’s looking like, we will soon have to invest more,” said BMW Chief Financial Officer Friedrich Eichiner conference in Amsterdam. BMW expects to sell more than 10,000 of the i3 next year and “will adjust capacity according to demand.”

The BMW i3 will go on sale in Germany November 16, followed by the U.S., China and Japan in the first half of next year. BMW has been touting its new “i” sub-brand on the auto show circuit for years, and the prep work so far is looking like it will pay off. BMW, along with other automakers jumping on the EV bandwagon, are eager to sell their electric cars and recoup investments in the technology underpinning the vehicles. Other costs involved in selling EVs include pricey print, TV and Internet advertising campaigns to both educate and excite consumers.

“The interest in the i3 electric car is generally a good sign,” said Sascha Gommel, a Frankfurt-based analyst with Commerzbank AG. “BMW has already absorbed the research and development costs for the vehicle and the car is profitable. So every car sold contributes to profits.”

While there’s plenty of interest around electric propulsion, consumers are still uncertain about making purchases. Renault and Nissan, which together are the largest producers of EVs, recently announced that it will miss a 2016 deadline of 1.5 million deliveries.

One big concern among consumers that’s hindering purchases is range anxiety. However, BMW believes they have a simple solution to the problem. Those who buy an i3 are allowed to book a conventional vehicle like the X5 SUV for several weeks a year as a backup as an option.

Despite weak sales, BMW and other automakers are pressing forward with EV development. Due to increasingly stringent emissions standards, automakers need to think about emissions and fuel economy. But for BMW, the outlook isn’t so bleak as demand will make the investment worthwhile.

“Demand in China and North America continues to be strong,” Eichiner added. “It makes sense for us to think about expanding production capacity in North America.”

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