Electric vehicles won?t be profitable at first

Even though in a previous interview for Business Magazine, BMW CEO Norbert Reithofer hinted that the expects the electric car to make money in its first generation, a latest report from Automotive News states the contrary.

According to the magazine, Reithofer isn’t expecting new vehicle and powertrain concepts like the company’s Megacity Vehicle and electric drive to contribute to profits at first.

“It may be that you don’t earn any money with such technologies during the first product cycle,” he said during an event at the Institute for the Automotive Industry in Nuertingen, Germany. “Here, conventional drive has to cross-subsidize the new technology.”

During the same event, Reithofer said BMW is planning to charge customers more for electric cars. “Electric cars will be expensive vehicles in the beginning”.

BMW’s first production-ready vehicle with lithium ion batteries, Megacity, will be launched in 2013. The electric car will be built in Leipzig, Germany and will make extensive use of carbon fiber materials, ultra-light components that would help with the weight issue. Aluminum parts will harmoniously integrate with carbon fiber to offer increased safety.

The combination of carbon fiber and aluminum will offset as much as 350 kilograms (772 pounds) of additional weight from lithium ion batteries and electronic components, Klaus Draeger, BMW’s development chief, told Bloomberg earlier this year.

As mentioned during the Mobility event earlier this year, BMW is building its electric drivetrain as well as its lithium ion batteries, in-house

In the development of the lithium ion batteries, BMW’s partnerSB LiMotive will contribute with the lithium ion batteries cells. SB LiMotive is also supplying battery cells for the ActiveE vehicle that goes in a pilot across US in 2011.

BMW CEO is fairly confident that by 2020, BMW electric vehicles will account for 5 to 15 percent of the market.