MUNICH (Bloomberg) -- BMW has begun rolling out the plug-in i8 as rival Tesla Motors Inc. shakes up the market for luxury cars with alternative powertrains.
BMW started deliveries on Thursday of the 126,000 euro ($135,700) sports car to show it can do more than make conventionally powered sedans and SUVs.
"The i8 is a brand shaper," Ian Robertson, head of sales and marketing for BMW, said. "Today sustainability is another important element of premium cars and it may very quickly become a must-have."
BMW's most expensive model combines an electric motor and a lightweight carbon-fiber frame and is more fuel efficient than the Toyota Prius and can accelerate faster than a Porsche 911.
But it will face stiff competition from Tesla’s model S which starts from 65,740 euros in Germany.
"Germany's premium automakers feel Tesla's rise more keenly because they're expected to be the biggest innovators," said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler. "Tesla will be able to win over people who'd normally buy a BMW. Even in Germany, people are lining up to test drive" the U.S. carmaker's Model S sedan, the brand's only car.