BMW

By Chris Reiter, Bloomberg

Bayerische Motoren Werke AG (BMW) will give a new electric-powered city car a lounge feel with bench seats, naturally tanned “mocha brown” leather and hemp fibers in the floor covering to hold off Volkswagen AG (VOW)’s Audi.

BMW for the first time showed concept versions of the i3 electric city car and the i8 hybrid supercar, which Chief Executive Officer Norbert Reithofer said will cost more than 100,000 euros ($143,000), in Frankfurt today. The models, developed from scratch, will anchor BMW’s new “i” sub-brand.

“The majority of current electric vehicles are so-called conversions of traditional vehicles but conversions are always compromises,” development chief Klaus Draeger said. “We wanted to bring e-mobility to the streets without compromise.”

BMW is betting that the 530 million euros investment to set up production of the vehicles will pay off in the race with Audi, which overtook Daimler AG (DAI)’s Mercedes-Benz this year and has vowed to topple the Munich-based carmaker as the luxury-car leader by 2015. Initial volumes for the models could be in the “tens of thousands,” with the potential to grow rapidly depending on market and regulatory developments, sales chief Ian Robertson told Bloomberg TV.