Can ban on fossil fuels
BMW’s chief executive has called for Europe’s ban on sales new cars with petrol and diesel engines to be canned to cut reliance on China’s battery supply chain.
Oliver Zipse, pictured, says the mood across the region is trending towards one of pessimism and a new regulatory framework is needed for the industry to remain competitive there.
In Europe, sales of new fossil-fuelled cars is due to be outlawed in 2035.
Zipse made his views known on October 16 at the Paris Motor Show, which has been dominated by French and Chinese makers during a brewing trade war over tariffs on EV imports.
“A correction of the 100 per cent BEV target for 2035 as part of a comprehensive CO2-reduction package would also afford European OEMs less reliance on China for batteries,” he said.
“To maintain the successful course, a strictly technology-agnostic path within the policy framework is essential.”
EU member states approved legislation in March 2023 requiring all new cars to have zero emissions from 2035, effectively banning diesel and petrol vehicles, and 55 per cent lower emissions from 2030 when compared to 2021 levels.
Car makers including BMW, Volkswagen and Renault have called for the CO2 targets to be loosened or delayed, fearing the impact of heavy fines because of lower-than-expected EV sales.
Germany has rejected an early review of the targets, given the need for clarity for industry and the urgency of tackling climate change.
During the event in Paris, the head of French automotive association, the PFA, stopped short of calling for the 2035 ban to be abolished, but said it was necessary to “come back around the table” to discuss the review of the targets.
EU’s hikes in tariffs
Chinese manufacturers are attending this year’s Paris Motor Show in force. BYD, Leapmotor and Xpeng are among the nine EV brands launching new models, despite the EU’s threat to tax imports in an escalating trade clash with Beijing.
Chinese marques account for about one-fifth of car makers in attendance at this year’s event in the French capital.
However, long-established European manufacturers are trying to fight back with new efforts to win over consumers who have balked at their higher-priced EVs, with likes of Renault and Citroen unveiling more affordable models powered entirely by batteries.
In early October, EU member states narrowly backed import duties on Chinese-made EVs of up to 45 per cent. These are intended to counter what Brussels says are unfair subsidies from Beijing to Chinese marques. Beijing denies unfair competition and has threatened counter-measures.
While Chinese carmakers have criticised the EU’s move, they are pressing ahead with European expansion plans. So far, none has said it will raise prices to cover the duties.
On October 15, Carlos Tavares, chief executive at Stellantis, which includes major brands Peugeot, Fiat and Vauxhall, warned additional tariffs would lead Chinese car makers to set up plants in Europe, adding to overcapacity in the region and leading some local manufacturers to close factories.
China’s GAC has said this year’s Paris Motor Show marks the launch of its European ambitions, while compatriot Leapmotor has announced it aims to have 500 points of sale in Europe by the end of 2025.
Chinese EV makers, such as BYD, have so far priced their models slightly below European rivals, giving them an advantage. That will also help offset lower margins at home.
Newer Chinese entrants like Dongfeng, Seres and FAW are also showing off new models in Paris as they seek overseas EV sales to offset a weak home market and a price war there.
The pressure is on to try to keep prices down in Europe too as EV makers try to close the gap with cheaper petrol cars.
Tianshu Xin, chief executive of Leapmotor International, says: “My personal view is we will achieve price parity in Europe in two to three years. “If you want to compete, you need to work hard towards that goal.”
