BMW's New Electric Car Comes With A Surprisingly Low Price Tag

BERLIN (Reuters) - Germany's BMW will sell the battery powered i3 city car at a lower-than-expected base price to stoke demand for its first electric vehicle as the luxury auto maker aims to keep rivals Audi and Mercedes at bay.

The four-person i3, developed from scratch, will start at 34,950 euros ($45,900) when it goes on sale in Germany in November, Munich-based BMW said on Monday, a week before unveilings planned in London, New York and Beijing.

Analysts expected a base price of below 40,000 euros.

BMW, pitching the i3 even as demand for battery technology has disappointed over costs, weight and concern about range, is targeting second-car buyers in urban regions in the world's main auto markets, sales chief Ian Robertson said last week.

The world's biggest luxury car maker has not given a sales target for the i3, although Robertson has said it aims to be "a significant player" in the market for electric vehicles which he has pegged at about 150,000 cars worldwide in 2012.

"The price is very competitive," Frankfurt-based Commerzbank analyst Sascha Gommel said, citing an anticipated range of 37,000-40,000 euros. "It seems realistic that BMW could grab a decent share of the electric-car market" with the i3.

BMW created a separate "i" sub-brand to market electric vehicles and is counting on the i3 and the i8 plug-in hybrid sports car, due to hit dealerships early next year, to give it an edge in innovation, a key attribute for premium auto manufacturers.

BMW group, which also includes Mini and Rolls-Royce cars, is stepping up investment on new vehicles and technologies as German rivals Audi and Mercedes seek to snatch the luxury-sales crown by the end of the decade.

Volkswagen-owned Audi, which eclipsed Mercedes as the world's No. 2 premium-auto maker in 2011, narrowed the gap to BMW to no more than 24,000 cars after six months from 85,000 at the end of 2012.

Both of BMW's electric cars use carbon fiber and reinforced plastics on a lightweight aluminium chassis and parts, to trim weight and battery costs. The i3 will also offer a range extender permitting the car to drive over 300 kilometres, more than double the normal distance on battery alone.

(Reporting by Andreas Cremer. Additional reporting by Victoria Bryan; Editing by Louise Heavens)