Tesla's Loss Is BMW's Gain In LAPD Electric Vehicle Contract

In an unfavorable development for Tesla Motors, Inc. (NASDAQ:TSLA) , the Los Angeles police department (LAPD) has opted to lease the electric vehicles of BMW instead of those of the former.

Tesla’s electric vehicles, namely P85D variant of Model S, are faster and travel more on a single charge. However, these vehicles are much more expensive than the models offered by BMW. In fact, BMW’s i3 all-electric plug-in vehicles start at $42,000, which is less than half the price of Tesla’s cars. This was the primary reason behind the LAPD’s choice.

BMW will be leasing 100 electric vehicles to the police department. With this, the LAPD will have a fleet of around 200 electric vehicles. The police department will use the vehicles for community outreach and other police business rather than for patrols or car chases. With the addition of these police vehicles, Los Angeles will be having the largest fully battery-powered municipal fleet in the U.S.

The police department has inked a three-year lease agreement with BMW. This will provide flexibility to the department to change the fleet with the evolution of electric vehicle technology. According to the lease agreement, the LAPD can replace 100 aging vehicles instead of just 36 planned earlier.

In addition, the LAPD has obtained permission from city council to allot $1.5 million to purchase and install 104 charging stations, including 4 DC fast chargers which will be able to restore a full charge within an hour.

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Tesla currently carries a Zacks Rank #4 (Sell).

Stocks that Warrant a Look

Some better-ranked automobile stocks include Lear Corp. (NYSE:LEA) , Autoliv, Inc. (NYSE:ALV) and Superior Industries International, Inc. (NYSE:SUP) . All these stocks sport a Zacks Rank #1 (Strong Buy).

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