BMW, the world’s top “premium” car brand in both sales and brand recognition, probably never thought it would be up against a newcomer like Tesla, but the situation today is that the German carmaker may indeed have something to fear.

“We won’t say BMW perceives Tesla as a rival, but it is closely watching the company,” said one industry source close to the matter.

Tesla, on the other hand, appeared to be nonchalant and fearless, with the CEO Elon Musk commenting that “there’s room to improve on the i3, and I hope that they do,” about the release of the i3, BMW’s first electric vehicle.

An odd match, but the two are emerging as probable rivals in the electric car segment.

For Korean consumers, the rivalry between BMW and Tesla may not have immediate impact, but could have more meaning for suppliers such as Samsung SDI, which is expected to soon be providing lithium ion batteries to Tesla. SDI already supplies to BMW for the i series.

Volkswagen is also rumored to be receiving batteries from the Korean battery maker.

“The competition won’t be all bad, especially if and when the electric car market grows bigger, in which case the total pie would get larger for local suppliers,” said one industry expert.

Tesla, for the time being, has said it does not perceive Korea as a potential market due to its lack of infrastructure for electrically powered vehicles.

With its reputation for reliably high-performing cars, BMW had so far nothing to prove, especially in the luxury sedan segment. But it had been expecting competition in electric cars, those close to the company said, following the unveiling of the i3. The more powerful luxury version, the i8, is also awaiting its launch.

Tesla, on the other hand, is mainly about electrically powered sports cars packaged in edgy designs. It was also forced to tackle a litany of challenges, including skepticism about electric cars in general.

The California-based carmaker now seems to have overcome the majority of these misgivings given that it is set to produce up to 21,000 vehicles this year on increased demand.

It also confidently states on its website that a Tesla car would save owners up to $8,000 a year compared to driving a BMW 535i.

In terms of prices, BMW may have the upper hand given that its vehicles are up to about $10,000 cheaper than Tesla’s.

Design appeared to be another point of contention between fans of the two carmakers, with some arguing that BMW has gone overboard and designed a car that was more of an “experiment” that runs contrary to what BMW stands for.

By Kim Ji-hyun (jemmie@heraldcorp.com)