BMW i3 Electric Outsells Tesla Model S

BMW i3

Sales of BMW's radical new electric car surpass Hollywood favorite Tesla for the first time

When Tesla Motors CEO Elon Musk was asked what he thought of BMW's i3, one of the first electric cars from an upscale automaker to compete with Tesla's sector-leading Model S, Musk burst into derisive laughter. "I think there is room to improve on the i3," Musk sniffed. "And I hope that they do."

Musk probably isn't laughing now.

In August, BMW sold 1,025 i3s, which sticker at $41,000, in North America, a 182 percent increase over July's sales of 363 cars, according to EVObsession. Tesla doesn't release monthly sales figures, but according to estimates by InsideEV, Tesla sold around 600 Model S's in August, a 54 percent drop from August 2013. Overall, Model S sales are down 26 percent compared to January-August last year.

Part of the decline is due to Tesla's redirecting Model S deliveries to Asian markets, particularly China, and the closing of its Fremont, Calif., factory for two weeks to retool for the Model X SUV, which is scheduled to begin production in 2015.

Still, the surging popularity of the i3, which has been on sale in the U.S. for three months and is increasingly visible around Hollywood (Halle Berry drives an i3 in Steven Spielberg's Extant), increases the pressure on Tesla to field a broader array of vehicles as luxury carmakers like BMW, which delivered the first $135,000 i8 plug-in hybrid sports cars last month, Mercedes-Benz and Porsche target the high-end electric market that the Model S, which stickers at $70,000, has had to itself.

Last week, Tesla announced it would build its battery gigafactory in Nevada after the state granted $1 billion in tax breaks and other incentives. The gigafactory is meant to ensure a steady supply of batteries so that Tesla can ramp up production of the Models S and X and the Model 3, a $35,000 sedan scheduled to debut in 2017 that Musk intends to be Tesla's first mass-produced model.