BMW’s big push to reinvent itself as a serious cycling company is backfiring.
The company’s $2.5 billion investment into a bike-sharing company has only generated $3 billion of its original $15 billion goal.
The investment was supposed to fund a fleet of more than 10,000 bicycles and allow people to ride bikes for free, but it didn’t quite meet its goals, Recode has learned.
The news comes as BMW announced last month it plans to spend $3.2 billion on new infrastructure around the world to increase biking as a mode of transportation, including new lanes and new stations for bicycles and bicycles.
The bike-share initiative is aimed at creating more biking opportunities in countries where bike ownership is limited or nonexistent, according to a company press release.
The announcement of the bike-shared program, which is slated to launch in 2019, was met with excitement by some investors.
“We are thrilled to see that BMW is stepping up to the plate to make bicycle ownership a reality for more people,” said Richard Rothstein, founder of Rothstein Asset Management, a company that specializes in investments in bicycle companies.
“BMW has taken the initiative to create a truly affordable way for its customers to get around and this is a positive step towards increasing the use of bicycles for transportation.”
But BMW’s investment in bike-shares may not have gone far enough.
The deal didn’t include a guarantee that the company’s new bikes would actually be free of charge, which means there’s a good chance the bikes could end up costing more than their original price.
While the new bikes have an average price tag of $3,800, BMW doesn’t have a guarantee of free bikes for the bikes they plan to sell.
And the company also doesn’t know whether its investment will result in bike owners getting a discount on the bikes that they already own.
The new bikes won’t be free.
Rather, the company is offering a 10% discount on existing bikes, the same discount offered to customers buying the bikes from BMW itself.
But that discount is only for the bike they bought and the company doesn’t guarantee that they’ll get the same value as bikes they bought from other sources.
The discount is limited to the bikes the company plans to sell in its bike-shed program, the press release said.
The offer isn’t much of a guarantee because BMW can’t guarantee if the bikes will be free from a third party.
If the bikes are free, the price will be more expensive, which could drive people to take the bikes out of the program, said Rothstein.
And there’s also a risk that the bike’s new owners will be tempted to buy a new bike from someone who’s already been using the bike, which might mean they’ll end up paying more for the old bike, said Josh Wurman, an analyst at research firm Kantar Worldpanel ComTech.
The program has also sparked debate among investors about whether it will boost bike sales or just discourage new riders.
“The bike sharing program has been a total flop,” said Wurmann.
“It’s not the most effective way to generate bike sales.”
BMW’s bike-to-bike program will start with 1,600 bicycles, and it will eventually expand to more than 20,000 bikes.
The price for the new cars will be a whopping $50,000, but BMW isn’t guaranteeing that buyers will be able to use the bikes for as little as $40,000.
Rothstein and other investors believe that the new bike program will bring BMW more in revenue and more sales.
But the new BMW bikes will also cost a lot more, and they may not be worth the $3 to $5 per month that the companies is promising customers.
“This is a really, really expensive investment,” Rothstein said.
“And BMW isn.
It will cost BMW money.
And if you can’t afford the bike now, how is that going to help BMW in the future?”