BMW Decides its New iX3 Electric SUV is Not Coming to the U.S. as Planned

author: FutureCar Staff    

The BMW iX3 is no longer destined for U.S. dealerships.

German automaker BMW has had tremendous success with its X line of SUVs over the past decade, which has grown to include the X1, X2, X3, X5, X6 and X7 models. In fact, most of these X models are built in the U.S. for export around the world at BMW's Spartanburg plant in South Carolina.

With U.S. consumers buying up SUVs and crossovers, it seems as though a fully-electric or plug-in hybrid version of the popular X3 SUV would be a big hit in the U.S. market. However, BMW no longer shares that belief and the automaker has decided to axe the electric iX3 model that was supposed to reach U.S. dealer showrooms sometime this year.

According to Automotive News, the automaker decided that the specs of the iX3 were not competitive with the other electric models hitting the market already offered. 

"At this time we do not have plans to bring the iX3 to the U.S. market," a BMW spokesman confirmed to Automotive News, declining to elaborate on the reasons for the decision.

In January, BMW quietly informed dealers at a meeting in Boca Raton, Fla., of its decision to not introduce the iX3 in the United States next year. Unless the vehicle has a range of at least 300 miles, "it's not worth bringing to the table," said one BMW retailer who asked not to be identified. 

BMW felt that its new electric SUV would not be able to compete with longer range models such as Tesla's upcoming Model Y, Audi e-tron and Hyundai Kona electric in the U.S.

In addition, BMW, along with its German rival Mercedes-Benz are slowly realizing that U.S. car buyers are reluctant to give up gas-powered SUV models and make the switch to electric vehicles. Despite their proclamations of interest in battery-powered vehicles, few automakers other than Tesla have made much traction in the U.S. market with EVs. Even the more affordable Chevy Bolt EV from General Motors is experiencing sluggish sales.

"To be competitive (in the U.S.), you really want to have closer to at least 240 to 250 miles of EPA range. Anything less than that, and I think you're going to be struggling in the marketplace."

Said Sam Abuelsamid, principal analyst at Navigant Research, said to Automotive News about BMW's decision.

Although its won't be offered in the U.S., BMW has big plans for the fully-electric iX3 in other countries. The SUV will be available in China and throughout Europe, where regulations are pushing automakers to reduce CO2 emissions to an average 95 grams per kilometer. 

Automakers face big fines in Europe next year if they fail to cut their fleet CO2 emissions to an average 95 grams per kilometer. The only way BMW can meet these tough guidelines is to offer new hybrid and electric models, which BMW plans to do.

BMW said it plans to divert production and supply markets that are more receptive to the new technology. Regulatory pressures to cut CO2 emissions in Europe and China to reduce emissions are creating urgent need for new electric models in those markets.

BMW's decision follows that of its rival Mercedes Benz. In December, Mercedes-Benz notified its U.S. dealers it would delay the launch of the EQC electric crossover by at least one year, pushing it ahead to 2021. 

Instead Mercedes will focus on selling the EQC in Europe where demand remains high. The EQC is the company's first fully-electric SUV and it was set to compete with Tesla in the U.S.

"We had to make a little bit of a tough choice," Daimler CEO Ola Källenius told reporters in January at CES in Las Vegas. "Demand [from Europe] by far outstrips supply, even though we are ramping up and adding additional battery lines to the production."

Both BMW and Mercedes Benz will also need for their new electric models destined for the U.S. to rival the specs of Tesla's vehicles, including the Model S, Model 3 and the new Tesla Model Y crossover. 

Tesla's Model Y has the potential to be a big hit as Tesla's first electric crossover, a popular segment for U.S. consumers. Tesla Chief Executive Elon Musk said the Model Y has the potential to outsell all of Tesla' other models combined.

With BMW's axing the iX3 in the U.S., any electric vehicle the automaker finally offers here in the future will need to have sufficient range and power to be competitive with other electric models. 

The iX3 includes a 74 kWh battery pack with a WLTP range of 273 miles, which in the real world could be up to 20% less. With advances in battery energy density, those numbers might not be good enough to justify the iX3's more than US$50,000 price tag.

FutureCar Staff