Tesla sold about 367,000 all-electric cars in 2019.
Justin Sullivan/Getty ImagesBMW is opening up a new front in its battle with electric-vehicle maker Tesla, offering an all electric 5-series sedan.
It sounds like big news. And it is—in the long run. Investors, however, weren’t reacting much. Tesla stock (ticker: TSLA) was up about 1.4% near midday Monday after declining about 11% late last week following Tesla’s second-quarter earnings report.
According to Reuters, BMW (BMW.Germany) plans to have almost five million fully electric vehicles on the road in 10 years. That works out to about 500,000 new EVs sold each year between now and 2030. BMW wasn’t immediately available to comment on the report.
It is a lofty goal. BMW sold less than 150,000 electric vehicles in 2019, including hybrid powertrains. Tesla, still the world leader in EV technology, sold about 367,000 all-electric cars over the same span.
BMW is playing catch-up as the two companies battle for luxury-segment market share.
A nicely appointed 5-series sedan, for instance, starts at roughly 50,000. A Tesla Model 3 starts at less than $40,000 and a Model S sedan starts around $80,000, bracketing the 5-series. BMW also offers more-expensive 6- and 7-series vehicles.
Around the globe, BMW sold about 350,000 5-series cars in 2019. The company sold an additional 75,000 6- and 7-series cars to go with roughly 20,000 X6 SUVs. An X6 is comparable with a Tesla Model X.
Tesla combines Model S and X sales for reporting purposes. It delivered about 300,000 Model 3 sedans last year, accounting for a majority of its deliveries.
BMW also sold more than 300,000 smaller X3 SUVs in 2019. Those vehicles retail for roughly $40,000 to $50,000. The new Tesla Model Y starts around $50,000 and is targeted for that lucrative segment of the crossover-SUV marketplace.
Many global auto makers, including General Motors (GM) and Volkswagen (VOW.Germany), are going electric, effectively pursuing the strategy Elon Musk pioneered a decade ago.
Tighter emissions standards globally are one reason. Also, battery costs are falling and reliability is rising, and Wall Street is expecting Tesla to address both of those topics when it plays host to a battery technology day in September. Analyst reports have also mentioned the “million mile battery.” That is a battery that can last for a million miles, likely far longer than any car body would last.
In addition to longevity, Musk’s long-term goal is to get battery costs to $100 per kilowatt-hour. A Model S can be equipped with a 100 kWh battery back. If Musk hits his goal, the batteries would cost $10,000 and that would put the price of EVs and gasoline-powered cars on par on dealer lots.
Tesla stock is up about 250% year to date, better than comparable returns of the S&P 500 and Dow Jones Industrial Average. BMW shares are down about 18% over the same span.
Write to Al Root at allen.root@dowjones.com
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