Tesla Motor Inc (NASDAQ:TSLA) faces a serious competitor in electric vehicles in Bayerische Motoren Werke AG (ETR:BMW) (FRA:BMW). Or does it? Many reports have compared Tesla’s Model S to BMW’s new i-Series of electric cars, for obvious reasons, as both automakers are luxury brands.

So will Tesla continue to lead the luxury electric vehicle market, or will BMW take over? Which company will become the leader of the EV market? These next few years will certainly be interesting.

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BMW’s EV efforts

A report on PluginCars.com seems to suggest that BMW is positioning itself to dominate the electric vehicle market. Indeed, the company now has two electric cars on the market: the smaller, more affordable i3 and the high-end i8.

[drizzle]Tesla has been angling to get a mass market $35,000 electric vehicle on the market by 2016, although the $42,500 BMW i3 does have a head start. However, Tesla has a significant advantage in terms of range, as the i3 has a range of about 80 miles per charge, compared to Tesla’s range of closer to 200 miles.

Of course for many people, 80 miles on a charge is perfectly fine—for a commuter car. But that range limits the BMW’s use as a cross-country travel car.

BMW, Tesla may be partnering

But what makes the race between Tesla Motors and BMW especially interesting is the possibility that BMW may have purchased or be planning to purchase the 4% stake in Tesla that was previously owned by Daimler AG (OTCMKTS:DDAIF) (RA:DAI) (ETR:DAI). It would make sense for the two companies to partner together in developing the ultimate electric car.

After all, Tesla and BMW each have put together an important piece of the puzzle in building a successful electric car. Tesla’s battery technology is arguably the best in the industry because of how much range the automaker has packed into its battery packs. The company also has electric drive trains that it has been selling to Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203), although that partnership has ended. BMW has created a special carbon fiber reinforced plastic that would be very beneficial to Tesla in making its cars much lighter.

Also it was reported that Tesla and BMW executives met earlier this year to talk about putting together a standard electric car charging network. If they follow through on those talks, it would be a major development that could speed up adoption of electric vehicles.

So will BMW or Tesla Motors become the electric vehicle leader? It may end up being both of them if they can forge a partnership that works and furthers electric vehicle adoptions more quickly than has previously been expected.

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