The EU’s plans to ban the manufacture of traditional combustion engines from 2035 will shrink the industry, BMW’s chief executive has warned as the German car industry battles with increased competition from China in the electric vehicle sector.
In a comment that will alarm Brussels, Oliver Zipse told the Paris motor show the 2035 cutoff point for CO2-emitting cars was “no longer realistic”.
The ban “could also threaten the European automotive industry in its heart,” Zipse said. The measures will “with today’s assumptions, lead to a massive shrinking of the industry as a whole”.
European car manufacturers are out in force in Paris to defend their home turf, with Chinese brands representing just one-fifth of those on show compared with 2022 when they accounted for half the brands displayed.
BMW, one of the driving forces of the German car industry, is showcasing 15 electric vehicles in Paris, the most important industry event in the calendar.
“A correction of the 100% BEV (battery electric vehicle) target for 2035 as part of a comprehensive CO2-reduction package would also afford European OEMs (original equipment manufacturers) less reliance on China for batteries,” Zipse added referring to Beijing’s dominant position.
Carmakers including BMW, VW and Renault, as well as the Italian government, have called for the CO2 targets to be loosened or delayed.
On Monday Carlos Tavares, the chief executive of the Fiat, Citroën and Vauxhall owner Stellantis, said proposed tariffs on Chinese cars would speed up plant closures in Europe, as they would push Beijing to move manufacturing to the continent in direct competition with European brands.
Tavares said a decision would be made on the future of its UK plants “in the next few weeks”, amid a row over government electric vehicle quotas. Stellantis said in June that it could be forced to close its Vauxhall plants at Ellesmere Port and Luton if government rules were not relaxed.
Tavares predicted Chinese brands would not be going to Germany, France or Italy, the home of Europe’s oldest brands, but China would seek cheaper options in countries such as Hungary, where BYD is already planning an assembly plant after efforts by the prime minister, Viktor Orbán, to woo investment from Beijing.
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This, he said, would mean “accelerating the need to shut down plants” elsewhere in Europe.
The German car industry, once the envy of the world, is suffering partly because of weaker demand but also a slow reaction to competition from China.
Efforts by BMW to push back against green targets will set alarm bells ringing in Brussels, which thought it had seen off the German car industry in 2023 when they were at loggerheads over the planned 2035 phase-out of CO2-emitting cars.
Under the rules, secondhand petrol and diesel cars can be sold after this date. But after the row last year, Germany squeezed a further compromise out of Brussels, which will now also allow new combustion engine cars to be sold beyond the deadline if they use efuels.
