Politics

By Charles Kennedy of OilPrice.com

Germany’s car manufacturing giant BMW is warning that an EU ban on the sale of gasoline and diesel cars from 2035 is “no longer realistic” amid slow EV sales as the European auto industry will see a “massive shrinking” with such a ban.

European carmakers are already struggling with their EV sales as subsidies in many countries are coming to an end and Chinese low-cost vehicle makers are gaining market share.

Last year, the EU member states approved an emissions regulation under which the bloc will end sales of new carbon dioxide-emitting cars and vans in 2035. 

The rules target 55% CO2 emission reductions for new cars and 50% for new vans from 2030 to 2034 compared to 2021 levels, as well as 100% CO2 emission reductions for both new cars and vans from 2035. 

Under the regulation, the European Commission will assess in 2026 the progress the EU has made in achieving the target. The Commission will decide whether the targets need to be reviewed.

But BMW’s chief executive Oliver Zipse said on Tuesday at the Paris Automotive Summit that the ban “could also threaten the European automotive industry in its heart.”

The current regulations will “with today’s assumptions, lead to a massive shrinking of the industry as a whole,” Zipse added, as carried by Bloomberg.

Electric vehicle sales in Europe have been suffering this year. Sales in Germany, for example, are plummeting as Berlin ended subsidies at the end of 2023.

Amid slowing sales of EVs, the European Automobile Manufacturers’ Association, ACEA, last month called for urgent action to reverse this year’s trend of declining EV sales.

The European auto manufacturers united in ACEA, called on the EU institutions “to come forward with urgent relief measures before new CO2 targets for cars and vans come into effect in 2025.”

Europe’s automakers “are playing our part in this transition, but unfortunately, the other necessary elements for this systemic shift are not in place,” ACEA said.