Summary
- BMW CEO Oliver Zipse believes Europe should rethink its ban on gas engine vehicles
- Zipse argues that the ban will force European automakers to rely on batteries from China
- Concerns exist about battery supply and competition with Chinese EVs
- The European Union introduced a target for 100% EV sales by 2035 in 2021
- BMW is set to ramp up production of Neue Klasse EVs starting in 2025 and is exploring battery partnerships
Article
BMW CEO Oliver Zipse recently expressed concerns about Europe’s planned phaseout of new internal-combustion vehicle sales by 2035. He argued that this move would force European automakers to rely on batteries from China. Zipse highlighted the need for a correction in this target to reduce Europe’s dependence on China for batteries. The CEO’s comments come amid growing skepticism within the industry regarding the feasibility of achieving 100% EV sales by 2035.
The European Union introduced the target for 100% EV sales in 2021, with member countries enacting stricter emissions standards in March 2023 to meet this goal. While the law has faced opposition from automakers and some governments, Volvo and 49 other companies recently signed a declaration supporting the EU’s efforts. Despite efforts to secure battery suppliers within Europe, German automakers like BMW still rely on companies like China’s CATL and South Korea’s Samsung SDI for battery production.
BMW’s decision to cancel a $2 billion deal with Sweden’s Northvolt earlier this year has raised concerns about the availability of batteries for its next-generation Neue Klasse EVs. The automaker’s shift to cylindrical cells and new architecture for its EVs will require a significant increase in battery production. Production is set to begin at European sites in 2025, followed by a North American factory in Mexico by 2027. Ensuring a stable and reliable supply chain for batteries remains a key challenge for BMW and other European automakers.
In addition to concerns about battery supply, there is also apprehension in Europe about the competitive threat posed by Chinese EVs. While the EU has imposed tariffs on electric vehicles imported from China, certain Chinese automakers may benefit from lower tariffs. This could pose a challenge for local companies as they seek to compete in the growing EV market. European automakers will need to develop strategies to address these challenges and ensure their competitiveness in the global EV landscape.
Zipse’s call for a reevaluation of Europe’s EV sales target reflects the complex challenges facing the automotive industry as it transitions to electric mobility. Balancing the need for sustainability with concerns about supply chain security and competitiveness requires a nuanced approach. European automakers must continue to innovate and collaborate to navigate these challenges and seize opportunities in the evolving market. By reassessing policies and fostering partnerships, the industry can strive for a more sustainable and resilient future for electric mobility in Europe and beyond.
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