Petrol ban is ‘imminent risk’ for car industry warns BMW boss as China price war heats up

The boss of BMW has warned that banning petrol and diesel vehicles poses an ‘imminent risk’ to the European car industry amid a price war with China.

Oliver Zipse, chief executive of the German car maker, said plans to ban combustion engine vehicles could put further pressure on companies that are already struggling to compete.

‘The base car market segment will either vanish or will not be done by European manufacturers,’ Zipse said.

‘I want to send a message: I see that as an imminent risk.’

Zipse joins a number of industry leaders that have questioned the time frame for phasing out petrol and diesel cars in a bid to push drivers towards electric vehicles (EV). 

Tough talk: BMW boss Oliver Zipse believes the whole of Europe’s traditional car industry is under threat

The EU plans to ban the sale of new combustion engine cars by 2035 while the UK deadline is five years earlier in 2030 – something that has been criticised for being unrealistic with the current EV charging infrastructure.

The Mail has launched a ‘Rethink The 2030 Petrol Car Ban’ campaign to highlight the pitfalls in this hasty transition to electric. 

Speaking to the Financial Times, Zipse said the charging infrastructure in Europe was still ‘far behind expectations, there are countries where they are not developing anything at all’.

The BMW boss also sounded the alarm over the rising prevalence of Chinese EV manufacturers that are driving down prices – and undercutting European players – as they look to expand on the Continent. 

China dominates the international market for electric cars partly due to its grip on the supply chain.

The nation has a hold on much of the mining of crucial raw materials, 80 per cent of the battery-making for EVs is controlled by Chinese firms and it is the world’s top car exporter.

Although Zipse said the price war was less brutal for more premium players such as BMW, he warned a growing number of cheap Chinese cars on the market would hit smaller players as they try to pivot away from fuel and towards electric.

The average price of an EV in China was less than £27,000 in the first half of 2022 compared with around £48,000 in Europe, according to researchers at global automotive market research company Jato Dynamics.

BYD, China’s biggest electric car maker, declared war on Western companies last month, with its founder Wang Chuanfu claiming that the ‘time has come for Chinese brands’. Last week BYD said profits soared 145 per cent in the three months to July to £740million after it sold a record number of cars.

It is not just the chief of BMW who is concerned about the implications of China.

Speaking at a mobility show in Munich yesterday, Renault boss Luca de Meo said: ‘We have to close the gap on costs with some Chinese players that started on EVs a generation earlier.’ 

The French firm was forced to slash its EV production costs by as much as 40 per cent because of these price pressures from the East.

And Carlos Tavares, chief executive of Peugeot and Fiat owner Stellantis, has said the competition with Chinese manufacturers was likely to be ‘extremely brutal’.

‘Their cost competitiveness is 25 per cent against us. We have to fight,’ he said in July, calling the Chinese push an ‘invasion’.

The UK is the largest market in Europe for Chinese electric car brands, accounting for almost a third of sales in 2023 so far, according to Schmidt Automotive Research on the 18 largest European car markets.

Chinese manufacturers have already secured 8.2 per cent of the European electric car market, selling 86,000 battery electric cars so far this year.

This post first appeared on Dailymail.co.uk