The CEO of BMW has warned that the European Union’s (EU) plans to ban internal combustion engine (ICE) vehicles will force European automakers to engage in a price battle with their Chinese rivals.
“The base car market segment will either vanish or will not be done by European manufacturers,” said BMW boss Oliver Zipse, in reference to the rapid rise of Chinese electric vehicle brands such as BYD.
China has emerged as the preeminent force in the global transition to electric vehicles and has significantly greater access to the supply chain than either the United Kingdom or the United States.
A multitude of brands, predominantly electric carmakers including BYD, Tang, SAIC, and Aiways, have endeavored to enter the European market and compete with established automakers.
According to comments made at Munich’s annual IAA Mobility conference and first reported by the Financial Times, Zipse stated in reference to the growing competition, “I want to send a message: I see that as an imminent risk.”
The EU intends to prohibit the sale of combustion engine vehicles by 2035, but its automotive industry continues to express concern over the potential repercussions, especially in light of a lagging implementation of electric charging infrastructure and diminished access to critical minerals.
Zipse questioned whether the industry would be able to achieve the current deadline for the phase-out, arguing that the European charging infrastructure was “far behind expectations.”
“There are countries where nothing is being developed,” he continued.
Legislators would not conduct an evaluation if they were confident that everything was in order.
China currently holds between 60 and 90 percent of the global market share for lithium refining. Lithium is an essential component in battery production.
According to estimates, India has a staggering 283 battery facilities in the works or under construction, while the United States has 34 and the United Kingdom has just two, including the recently announced Tata Group plant.
Zipse, who assumed control of BMW in 2019, stated that he was “not worried” about the automaker and that it had not been affected by the aggressive price battles in China between major automakers such as Tesla and BYD.
Personally, I believe EU would have taken this into account. Before drastic decisions are made in EU, the EV must become the norm, and the alternative must be made available (such as the infrastructure and even the recycling of used EVs).