2014 Car of the Year: BMW i3

NEW YORK ( TheStreet) -- Automotive history has its iconic milestones. Ford's ( F) Model T brought assembly-line mass production. Volkswagen's Beetle brought the automobile to the masses starting around World War II. The 1982 Audi 100 brought the modern aerodynamic design.

In the last couple of years, however, electrification of theautomobile has accelerated the change we have seen in the industry.This electrification comes in many stages and variants, from pureelectric cars to those with only mild electric assistance to agasoline engine.

The 2011 car of the year was the Chevrolet Volt. It is azero-compromise car where full power is available using anycombination of electricity and gasoline. The first 38 miles are onelectricity, and after that, a 9-gallon gasoline tank takes you another340 miles. The price is around $40,000. (Chevrolet is a unit of GM ( GM).)

The 2013 car of the year is the Tesla ( TSLA) Model S. It's a pure electriccar, and a giant 85 kWh battery takes you 265 miles with tremendousperformance. The price for a Tesla with this size battery is $80,000 .

The next major automotive achievement looks to be the BMW i3, and itcomes to market in December 2013, according to BMW. This car is thefirst to define a whole new class of electrification, presenting a newcompromise between electric range and gasoline capabilities.

Actually, there will be two versions of the BMW i3. One version willbe a very simple all-electric version with a range of 80-100 miles.As such, it slots in well below the Tesla Model S, but perhapsslightly above Nissan ( NSANY) LEAF, Ford Focus Electric, and some others suchas Chevrolet Spark EV, which will hit the market in 2013 shortlybefore the BMW i3.

The far more interesting version of the BMW i3 will be the versionthat includes a so-called range extender. In English, this means agasoline engine, which provides extra range when the battery has beendrawn down.

So how is this different from the Chevrolet Volt, you say? TheChevrolet Volt has 38 miles of electric range, and then a sizable 1.4liter, four-cylinder engine kicks in to provide full driving powerafter those 38 electric miles. With a 9-gallon tank, this extendedrange is more than 340 miles, making this car suitable for road trips between places such as Los Angeles and San Francisco.

The BMW i3's range extender provides for a very different mix ofelectricity vs. gasoline. The electric range will be 80-100 miles,but the range extender is a much smaller engine than in the Volt.Perhaps it will be a two-cylinder motorcycle engine with 650 ccdisplacement. BMW has not given the exact data of the final version.

Obviously, the power output of such a tiny gasoline engine may be insufficient to recharge the battery fast enough to enable the battery toprovide highway-speed propulsion. Perhaps it will only allow youto drive at less than 40 mph, or perhaps you won't be able to drive at all whilethis little engine builds up juice for the battery. You may have topull over and wait 15 minutes to give you that extra 10 miles worth of power. BMW has just not provided these specifications yet.

Equally debilitating will be that the gasoline tank will probably notbe larger than 2.5 gallons, in order to fit a new California governmentrequirement for this particular class of plug-in hybrid car. Yes, Ikid you not: It's California's equivalent of New York City Mayor Bloomberg's largesoda ban. The gasoline tank will not allow you to drive more than 100miles on one gasoline tank. Perhaps the civilized, i.e.non-California, world will get a version of the BMW i3 with a largergasoline tank.

Anyway, you see the difference here: The BMW will give you 80-100miles on electric power, and then another 80-100 miles on gasoline.This ensures that you will never get stuck, having miscalculated theelectric range, failed to charge somewhere, or simply had an emergencyoccur. However, this 80-100 mile worth of gasoline range may comewith a significant degree of inconvenience, as described above. If so, it'll bethere only for emergencies -- not for everyday or long-distancepractical use, as in the Chevrolet Volt.

Many people want an electric car, and they are fairly confident thaton 99% of days they will not drive more than 40-80 miles. However,99% is not the same as 100%, and they need a reserve that can ensurethey will never get stuck and that can handle the unexpected changeof plan.

The target BMW i3 consumers don't aim to takethis car on a road trip from Los Angeles to San Francisco. They planon driving it only inside any one of these metropolitan areas. Thereare many who fit this description, and for these people the BMW i3with range extender could be the right tool.

The Chevrolet Volt gives you zero compromise: Drive it like any other car, period -- just charge it when you can. The BMW i3 with range extender is far from zero compromise, but it may be a tolerablecompromise for some people.

The bonus kicker here is that the BMW i3 with range extender will bethe only gasoline-enabled car eligible for the California carpoolsticker for sale after late 2013. This means that once the 40,000green stickers applicable to Chevrolet Volt, Toyota Prius Plug-In andother cars run out (probably in the second half of 2013), the BMW will bethe only gasoline car sold eligible for the carpool lane.

This alone guarantees it California market sales success.

I published more details on the California "BMW exemption" for the2014 carpool lane here.

There is also "one more thing" about the BMW i3 worth mentioning: Theinterior. You have not seen a car interior like this. The stylingmakes it eligible for display at The Museum of Modern Art. Regardless of the car's other benefits, this alone will sell this car. See interior photos at Autoblog.

For those of you who have spent time inside the Tesla Model S, youknow what a radically different car interior means in terms of the"wow" factor. Well, the BMW i3 is right up there, or even ahead, ofthe Tesla Model S. You have to see it to believe it.

In conclusion, the electrification of the automobile means that thereis a new segmentation of capabilities -- range, performance andrefueling methods -- emerging in the marketplace. The BMW i3 withrange extender clearly isn't the same class of animal as the ChevroletVolt, but rather it is the first car of a new class of plug-in hybrids.

As icing on the cake, the i3 also has the most beautiful interior Ihave seen in a car to date. If BMW delivers on all of these items inthe final production version of the car, and does it on time aspromised by December 2013, I think it is a shoe-in as the 2014 car ofthe year.

At the time of submitting this article, the author had no positions inthe companies mentioned.

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