In this paper, we provide theoretical analysis on range estimation in frequency modulated continuous wave (FMCW) systems when the source nonlinearity is present. Existing literature on the effect of source nonlinearity on the range estimation is either based on a heuristic approach or limited to specific algorithms. To provide a unified analysis, we introduce the framework of misspecified Cramér-Rao bound (MCRB) and derive analytical lower bounds on the range estimation. Our analysis reveals that the range estimation accuracy is a function of the nonlinearity function, system parameters (e.g., bandwidth, sampling frequency) and noise variance. It is also noted that our result converges to the conventional accuracy analysis for range estimation when the nonlinearity becomes negligible. Finally, numerical results are provided to verify the analytical bounds.