EU plans to ban the production of traditional internal combustion engines from 2035 will lead to a shrinking industry, the head of BMW warned, as the German car industry battles growing competition from China in the electric vehicle sector, The Guardian reports.
Oliver Zipse said at the Paris Motor Show that a ban on the production of CO2-emitting cars in 2035 is “no longer realistic.”
A ban “could also threaten the European car industry at its very heart,” Zipse also said. The measures “under today’s assumptions would lead to a massive contraction of the industry as a whole.”
European carmakers are in full force in Paris to defend their turf, with Chinese brands making up only a fifth of the cars on display compared with 2022, when they accounted for half of the brands represented.
BMW, one of the driving forces behind the German auto industry, will unveil 15 electric cars in Paris, the most important event on the calendar.
On Monday, Carlos Tavares, chief executive of Stellantis, which owns Fiat, Citroën and Vauxhall, said the proposed tariffs on Chinese cars would hasten the closure of factories in Europe as they push Beijing to shift production to the continent in direct competition with European brands.
Tavares said a decision on the future of UK plants would be made “in the next few weeks” amid controversy over government quotas for electric cars. In June, Stellantis said it could be forced to close its Vauxhall plants in Ellesmere Port and Luton if government rules are not relaxed.
Tavares predicted that Chinese brands would not go to Germany, France or Italy, home to Europe’s oldest brands, but would look for cheaper options in countries such as Hungary, where BYD is already planning to build an assembly plant following efforts by Prime Minister Viktor Orbán to attract investment from Beijing. That, he said, would mean “accelerating the need for plant closures” elsewhere in Europe.
The German car industry, once the envy of the world, is suffering partly because of weakening demand but also because it has been slow to respond to competition from China.
BMW’s efforts to counter green targets will cause alarm in Brussels, which thought it had already rid itself of the German car industry in 2023 when they agreed on a planned 2035 phase-out of CO2-emitting cars.
Under the rules, used petrol and diesel cars can be sold after that date. But after last year’s squabble, Germany secured a new compromise from Brussels that will now allow new internal combustion engine cars to be sold after the deadline if they use e-fuels.
