BMW CEO: There will be no "cars without Chinese parts" in the EU

BMW Group CEO (Oliver Zipse) once again severely criticized the EU's planned tariffs on Chinese electric vehicles at last Wednesday's financial results meeting and suggested resetting carbon emission assessment targets.

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Trade protection is "shooting yourself in the knee"

With less than a month to go until the European elections on June 9, the debate over the European Union’s ban on the use of internal combustion engines from 2035 has also become the focus of increasingly fierce election campaigns and is proceeding like a raging fire. Meanwhile, politicians and automakers are trying to position themselves.

Oliver Zipse said: "The countervailing investigation against China is exactly the opposite of what we expected. More than half of the products imported from China to Europe come from non-Chinese companies. This clearly shows that once the EU adopts tariff protection, it will soon Shooting ourselves in the foot. Tariffs are a wretched protective function that fundamentally harms ourselves. Chinese manufacturers have less than 1% market share in Germany and Europe, and Europe is not flooded with Chinese products. Trying to close the border out of pure fear."

Volkswagen CEO (Thomas Schäfer) also made it clear at the "Future of Automobiles" summit hosted by the Financial Times that the Volkswagen Group supports fair competition in the field of electric vehicles and warned against raising restrictions on imported electric vehicles from China. Tariffs on cars. The public believes that China's possible retaliatory measures will be a major risk. Mercedes-Benz Global CEO Kallenius also expressed the same concerns in March and advocated reducing tariffs on Chinese electric vehicles.

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More reasonable carbon emission targets should be set

BMW CEO Oliver Zipse put forward specific suggestions on how the EU can set carbon dioxide emission targets more effectively.

During BMW's 2024 Q1 financial data conference call, Oliver Zipse explained to the media: "Our current regulations stipulate that the CO2 fleet target is only adjusted every five years. This is completely inconsistent with the development law of the car. Our recommendation is every year Reduce CO2 emissions by X amount. This will achieve CO2 reductions faster than a gradual approach. In other words, continuous improvement rather than tightening every five years.

The EU currently caps CO2 emissions from passenger cars at 95 grams per kilometer by the end of 2024. Each new car registered that year is subject to a fine of €95 for every 1g exceeded. The cap will tighten to 93.6 grams of CO2 per kilometer from 2025, then to 49.5 grams of CO2 from 2030, and finally to zero carbon emissions from 2035. There are no further milestones between 2025, 2030, and 2035.

Oliver Zipse also made a second concrete suggestion for future solutions: "We can't just focus on cars, because the biggest emitter of CO2 is the fuel itself. It's ridiculous that the fuel industry is not involved at all." All regulations only apply to new cars, not owned vehicles, although the number of vehicles owned is much greater than the number of new cars sold each year. Effective regulation of CO2 emissions can only be achieved by involving the fuel industry. Fuel, etc., and BMW cars are already able to use higher fuel mixtures."

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There will be no "cars without Chinese parts" in the EU

Oliver Zipse hopes that the new European Commission will not only re-establish carbon dioxide emission targets but also review the imposition of punitive tariffs on electric vehicles imported from China. At present, it still seems likely that the current European Commission will decide to impose punitive tariffs, which may trigger immediate counterattacks from Chinese manufacturers.

Oliver Zipse said: "Let's see what happens first. My expectation for the new Commission is that it will focus more on competitiveness issues. The most important thing for Europe is free trade, and this must be clearly emphasized. Only in this way can we act based on equality. Unfortunately, this consensus is still missing from the EU political agenda."

BMW’s CEO concluded that the current EU plan to ban internal combustion engines and impose punitive tariffs on Chinese electric vehicles is: “We are in global competition. No other region has such a tough system, neither China nor the United States. "This will ultimately greatly damage our competitiveness." (Note: The U.S. government is expected to introduce high tariffs on Chinese electric vehicles as soon as this week).

Oliver Zipse stressed that imposing tariffs could be counterproductive because new carbon dioxide emissions standards will be implemented by the EU next year, which will require more electric vehicles that rely on Chinese battery materials. He concluded that there will be no "cars without Chinese parts" in the EU in the future. Without resources from China, the EU’s Green Deal will cease to exist.

In a speech about BMW's quarterly figures, Oliver Zipse also talked about current competitors with unusual clarity. Oliver Zipse divides the global automotive industry into three types.

The first category is those rising stars that create a lot of hype with a single product, but only provide a few single technical highlights, which may allude to Chinese car companies such as Geely Group's new energy brand Jikrypton and SAIC Group's Zhiji Automobile. The second category is established automakers who try to copy the new approach of upstarts, but in the process, damage their brand value and recognition. The third group is those companies that are struggling to keep up with the speed of change and are therefore still trapped in their traditional business models.

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Oliver Zipse made it clear that despite BMW's first quarter results being slightly weak for the first time, it intends to continue on its path while continuing to see itself as a role model for the industry.

"You can think of it this way: every player in the industry, whether ambitious newcomers or established manufacturers, is watching the BMW Group closely."