What does “the future” look like? How will we live, and what will we drive?
For automakers, these questions are existential, and most expend considerable resources trying to answer them. That was relatively easy throughout most of the 20th century, but it became more difficult in the 21st, as the pace of change increased exponentially—not only with respect to technology, but also where demographics are concerned.
“The world around us is changing,” said BMW Board Chairman Norbert Reithofer in his address to the annual meeting of BMW shareholders on May 15, 2007. He identified several near-term challenges, including new competition from China and an aging workforce in Germany.
More interestingly, Reithofer cited “mobility in the world’s largest cities” as a potential impediment to BMW’s business prospects. “We expect mega-cities such as Shanghai, Tokyo, Mexico City, Rio de Janeiro or Los Angeles, but also London and Paris, to grow further. Traffic density in urban spaces is rising dramatically. Already, some cities are trying to intervene by implementing regulations on traffic flow. The question is: What consequences does this trend have for us?”
Within the same speech, Reithofer noted the need to address climate change by developing powertrains that use less fossil fuel, or none at all. “The number of environmental disasters around the world is rising, and the UN report clearly shows how fast climate change is happening, even though this is not visible to the naked eye,” Reithofer said. “Everyone has to be prepared to make a contribution to climate and environmental protection.”
To achieve those goals, Reithofer announced BMW’s Strategy Number ONE, which included the creation of an in-house think tank dubbed Project i. Project i, Reithofer said, was “working on completely new car and mobility concepts for megacities.” The team was “fully independent and even free to act beyond BMW structures if necessary. The task of Project i is to present specific solutions in the first half of the next decade [2010-2020].”
Given the goals of Strategy Number ONE, it seemed likely that Project i would focus on an electrified powertrain, and not only for zero-emissions mobility. “The technology is now sophisticated enough to offer sheer driving pleasure,” Reithofer noted.
Initially, the Project i team led by Dr. Ulrich Kranz used off-the-shelf components to develop a prototype battery-electric powertrain, which would be tested in a MINI platform that reflected the planned dimensions of the forthcoming Megacity Vehicle. In 2009, the team built 500 MINI E test cars, 450 of which would be field-tested for two years by customers in the Los Angeles and New York metropolitan areas. BMW of North America engineers took the lead in analyzing the MINI E’s performance under a variety of conditions—including cold weather—and use scenarios.
“We know our customers well,” said Rich Steinberg, BMW NA’s then Head of Electric Vehicle Operations, “so not only are we looking at it from a technological standpoint—what we need to incorporate in the next-generation car—but also the psychographics and the mindset issues: What do they need in terms of range anxiety? What do they need from public charging network standpoint? We’re feeding all that back to the team working on Project i [in Munich].”
In its second phase, Project i moved from off-the-shelf components to an asynchronous electric motor designed in-house at BMW, powered by battery cell technology from a new Samsung/Bosch joint venture. This powertrain would be tested in 1 Series dubbed the ActiveE, with 700 of 1,000 prototypes tested by US customers under supervision from BMW of North America.
As with the MINI E, the engineers were keen to determine exactly how much battery capacity was required to make the ActiveE functional in real-world use. Range and performance would suffer if the battery was too small, but a larger battery would add weight, which itself would compromise performance. They settled on a battery weighing close to 600 pounds—far heavier than an internal combustion engine—which in turn required the weight of other components to be minimized. Crucially, the battery in the Megacity Vehicle would be located in the floor of the car, the optimum location for agile handling.
In July 2010, BMW announced that the Megacity Vehicle would be the world’s first series-production car to have a chassis built from carbon fiber reinforced plastic (CFRP) – an ultra-lightweight material used to build Formula One cars and the Boeing 787 Dreamliner. Carbon fiber is expensive, but BMW would mitigate its cost through weight reduction and thereby a smaller battery, less expensive battery pack for an equivalent range. Also, rather quietly, BMW (and one of its principal shareholders, Susanne Klatten) had made a significant investment in SGL Carbon, the world’s largest supplier of carbon fiber and carbon fiber products. Together, BMW and SGL had formed a new joint venture, SGL Automotive Carbon Fiber, building a new factory in Moses Lake, Washington to supply carbon fiber for BMW’s Megacity Vehicle.
A carbon fiber chassis and a battery-electric powertrain would attract technology enthusiasts to the Megacity Vehicle, but the car needed to reach a wider audience to justify BMW’s investment. Toward that end, BMW embarked on a public-relations campaign in September 2010, launching a dedicated website to share the philosophy and future projections that underpinned the car’s development. The website featured slickly-produced videos that made compelling arguments for electric mobility.
The Megacity Vehicle was the prime focus of Project i, but it would soon be joined by a futuristic sports car that originated with the Vision EfficientDynamics Concept that premiered at the Frankfurt IAA in September 2009. The Vision EfficientDynamics was received enthusiastically, which persuaded BMW to develop it as a sporty companion to the Megacity Vehicle.
In February 2011, BMW announced the creation of the “i” sub-brand, along with a new slogan: Born Electric. The Megacity Vehicle would go into production as the battery-electric i3, while the Vision EfficientDynamics would become the i8, with a gasoline-electric plug-in hybrid powertrain. Both cars would be built at BMW’s Leipzig plant, in a new hall dedicated to CFRP body shell construction, thermoplastic outer body panel formation, and electric powertrain installation.
Both cars made their debut in near-production form at the Frankfurt show that September. The super-sexy i8 drew rapturous applause, while the boxier, more upright i3—and its minimalist interior made of recycled or renewable materials—elicited a more restrained response.
Roma 20 giugno 2012, Palazzo delle Esposizioni BMWi. Born Electric Tour
After a six-year gestation, the i3 went into production in September 2013. The first cars arrived in the U.S. in the second quarter of 2014, with a retail price of $41,350 that was offset by a $7,500 federal tax credit that increased by another $2,000 in states like California.
Thanks to its CFRP body shell and aluminum chassis, the i3 tipped the scales at a very svelte 2,635 pounds, and the electric motor provided the equivalent of 174 horsepower, enough to propel the i3 from zero to 37 mph (60 km/h) in just 3.7 seconds. Initially, its battery capacity was rated at 60 amp-hours or 18.8 kilowatt-hours, enough for about 80-100 miles of driving. In 2017, BMW increased the i3’s battery capacity to 94 amp-hours, and complemented the standard model with the sport-tuned i3s.
“Our customers told us that wanted to have the i3 even sportier,” said Dr. Robert Irlinger, who took over Project i leadership at the beginning of 2017. “BMW i customers are still BMW customers, and BMW is about sheer driving pleasure. That’s the reason we worked on the powertrain. found some extra horsepower, some extra torque, worked on the suspension. It’s a little wider, and we brought it down by 10mm, so the chassis was optimized. The result is really great.”
In 2019, the i3 got a further increase in battery capacity, to 120 amp-hours. Throughout its production cycle, the i3 had been available with an optional ICE range extender ($3,850) that roughly doubled its range but didn’t provide motive power.
The range extender was convenient, but using it negated one of the i3’s most compelling qualities: the ultra-quiet interior. BMW had modeled the i3’s interior acoustics on an anechoic chamber, and the combination of its vibration-damping carbon chassis and near-silent electric powertrain created a truly serene driving environment. It was spacious, too, with no transmission tunnel to interrupt the flat floor, and filled with light from its tall greenhouse.
Though it handled like a go-kart, the i3 was precisely the opposite of raucous, enthusiast-oriented cars like the M3 or M5. It represented a true departure from the BMW status quo, and not all of BMW’s traditional customers would embrace it. Neither would all of BMW NA’s dealers, though the number who did “was by far bigger than we had anticipated,” said BMW NA CEO Ludwig Willisch. Those dealers had to create a dedicated space in their showrooms to separate the i-cars from their conventional counterparts, and they also had to ramp up their knowledge of battery-electric and hybrid powertrains, not to mention their skill in repairing new materials like carbon fiber.
The i3 was Project i’s bread-and-butter model, but the halo was provided by the i8, which went into production in April 2014 and carried a retail price in the US of $135,925 before government incentives. That was downright cheap for a stylish sports car with a state-of-the-art hybrid powertrain, particularly one with a CFRP body and aluminium chassis. The car weighed just 3,278 pounds and had a drag coefficient of just 0.26, which allowed it to reach 62 mph in just 4.4 seconds—3.8 seconds using Launch Mode—despite having a fairly modest 362 combined horsepower from its three-cylinder turbocharged engine and electric motor.
Alas, the i8 was discontinued in June 2020, by which time 20,465 examples had been built for worldwide consumption; of those, over 6,700 reached the U.S..
The i3, meanwhile, was becoming far more popular following a slow start. From just 16,052 units in 2015, annual sales topped out at 39,501 in 2019. Production of both cars was limited by the capacity of the Leipzig plant.
Though the i3 and i8 had a limited lifespan, those who purchased these cars became ardent boosters. In Los Angeles, a group of i3 enthusiasts who call themselves “The Electronauts” hold regular rallies and tech sessions, just as enthusiasts of conventional BMWs have done for decades. Most Electronauts have installed solar panels and battery storage units at their homes, and all appreciate its undersung performance. “It’s a zippy little devil!” said Electronaut Andrew Kim.
Project i’s sales figures may seem fairly modest considering BMW’s estimated $2 billion investment in Project i, but the i3 was the third best-selling electric car in the world for much of its lifespan. Moreover, the numbers were secondary to the transformation Project i effected within BMW.
With negligible fuel consumption—even the hybrid i8 returned close to 50 mpg—the i cars made an important dent in BMW of North America’s Corporate Average Fuel Economy rating. The i cars also served as the pioneers for BMW’s electrified powertrains, which began making their way into mainstream BMW vehicles shortly after the i3’s debut.
The long-term effects of Project i were acknowledged by new BMW Board Chairman Harald Krüger—who replaced Norbert Reithofer in May 2015—in his March 2016 address to shareholders. That speech seemed to signal the end of Project i, as did Kranz’s departure at the end of 2016.
Under Krüger’s brief leadership, which lasted only through August 2019, BMW used the lessons learned with Project i to initiate the next steps of BMW’s electrification. One of the key lessons was that BEV adoption varied widely around the world and that BMW – at least in the medium term – would need to have the flexibility to adjust its BEV mix based on local market demands. In the USA for example, Los Angeles, San Francisco and Seattle quickly adopted the BMW i3 whereas other areas of the country were far behind. The result was BMW’s “Power of Choice” architecture in which two flexible vehicle architectures (one for larger front engine-rear drive vehicles, the other for transverse front engine-front drive vehicles) would be developed that could accommodate any powertrain type (from pure ICE to PHEV to BEV). This would give BMW the flexibility to quickly shift production mix to market demand as the worlds markets shift toward electric powertrains.
In 2021, BMW released the first of the new “Power of Choice” architecture vehicles in the USA: The BMW i4 and the 4 Series Gran Coupe. But for the front grilles and the badges on their trunk lids, all were outwardly identical to their internal-combustion counterparts, as are more recent battery-electric BMWs like the i5 and i7. As of the end of Quarter 2, 2025, BEVs built on the aforementioned flexible architecture represent 14% of total BMW sales in the USA. If hybrids are included, electrified vehicles currently account for over 21%.
The flexible Power of Choice architecture was initially criticized in Europe for being too conservative and not fully embracing the switch to BEV only. However, history has shown that it was a shrewd and effective solution to satisfy the demand for all powertrain types in the markets that BMW competes in around the world.
Nevertheless, BMW was already hard at work developing the next vehicle architecture – in this case another full BEV architecture known as the Neue Klasse. In September 2025, BMW introduced the all-new BMW iX3 – the first of the Neue Klasse models. This iX3 is built on all the lessons learned in its electrification journey and is expected to be available for sale in the USA towards the middle of 2026. More on that vehicle in a future chapter.
Tags: EV future planning urban needs
