BMW says electric vehicles are great…for some people

In addition to developing its own all-electric powertrains, BMW has recently formed the new “i” brand to sell next-generation EVs and hybrids. The German automaker’s investment in such technology is staggering, but some execs still don’t believe electricity lives up to the hype.

At the New York International Auto Show last week, BMW North American Chairman and CEO Jim O’Donnell commented on some of the automaker’s upcoming products, particularly the ActiveE, which will become available for lease this fall. While the ActiveE is a prelude to the all-electric i3 that’s due in 2013, O’Donnell said he’s “far more optimistic” about upcoming diesel vehicles due to their practicality.

“[EVs] won’t work for most people,” O’Donnell said. “For at least 90 percent and maybe more of the population, [an EV] won’t work [at the current battery range].”

O’Donnell also added that there should be a level playing field between powertrain technologies when it comes to tax credits, noting that clean diesels are “slightly disadvantaged” by tax policy.

“I believe in a free economy. I think we should abolish all tax credits,” O’Donnell said, clarifying it was his personal opinion. “What they are doing is putting a bet on technology, which is not appropriate. As a taxpayer, I am not sure this is the right way to go.”

Although it’s usual to hear an auto exec downplaying the role of electric vehicles amid rapidly rising gas prices, BMW spokesman Tom Kowaleski made clear that the automaker’s goal is to “stimulate the development of advanced technologies leading to a more sustainable future of mobility.” As technology advances there will likely be a tug of war that proves which technology reigns as the most affordable and practical. If you ask Barberino Nissan, EVs are here to stay, but whether diesels will become more prevalent in the U.S. market is a harder question to answer.

Updated – In response to O’Donnell’s recent anti-electric vehicle comments, which essentially undermine the investment BMW is currently making in electric vehicles and EV powertrains, BMW’s North American chief has issued a lengthy apology letter. You can read all of O’Donnell’s letter below:

On April 18th, I had a conversation reported in the Detroit News that has caused a great deal of concern over the past week. I realize I could have been clearer in my comments and I sincerely apologize if I have offended the strong network of electric vehicle advocates whose support has been deeply meaningful to us at BMW.

First I want to stress I am 100% behind our company’s plans to design, develop, lease and sell electric vehicles. We are confident we are on the right path with the range and flexibility of the all-new BMW ActiveE and the forthcoming BMW i3.

We also understand that we are a country of diverse living and driving conditions and that electric vehicles may not be the natural choice for all drivers, many of whom will want to choose other advanced technology vehicles. That’s why BMW Group is investing in the broadest possible range of future innovation – gas and diesel engines that significantly improve performance, cleanliness and efficiency; hybrids; BEVs, and even hydrogen. We strongly believe all these technologies have a role to play in a sustainable future.

In this context, it is still too early for governments to pick winners and losers, which is why incentives should be aimed at a range of innovative actions that can meet diverse needs, rather than only one or two technologies. This is what I was trying to convey with my comments – consumers are smart enough to decide the best vehicle for their particular needs, so if incentives are applied, we should be mindful of market dynamics.

I am sorry for the confusion and concern I have caused. While I clearly should have chosen my words more carefully, rest assured, BMW is fully behind electric vehicles and all of the ongoing innovation in this area. We live in a diverse world and our company is working very hard on meeting the needs of our wide range of customers all over the world.