Electric vehicle price war looms with China

THE approaching net zero ban on petrol and diesel vehicles could put Europe’s car firms at disadvantage compared with China.

Speaking to the Financial Times ahead of the annual IAA Mobility conference in Munich, Oliver Zipse, BMW’s chief executive, warned that European electric vehicle (EV) manufacturers could not compete with China over prices.

European Union plans to eliminate combustion engine vehicles are not welcomed by the car industry, which provides direct and indirect work for almost 14 million people.

Misgivings extend from inconsistent access to the raw materials necessary for making car batteries to concerns that charging infrastructure was still “far behind expectations.” Some countries have done nothing at all, Zipse said.

“The base car market segment will either vanish or will not be done by European manufacturers. I want to send a message: I see that as an imminent risk,” he said.

Factories in China were able to turn out EVs more cheaply than their rivals in Europe, Zipse declared.

Last year China produced EV’s for less than £27,300 (€32,000) compared to Europe’s €56,000 according to Jato Dynamics studies. The cheapest Chinese EV, the BYD Seagull, was selling in China for less than £8,000 (€9,348), while the Fiat 500 – the cheapest available in the UK – cost £28,195 (€32,934).

Zipse explained that he was more uneasy about the cheaper market, as manufacturers like BMW were in a better position to protect themselves, owing to their higher margins and brand image.

Under Zipse, BMW has also become a comparatively isolated supporter of hydrogen-powered cars as an alternative to battery-driven EVs as this technology is less reliant on lithium and other difficult-to-source battery parts.

Like Renault, BMW has announced that it would continue to market combustion engine vehicles outside Europe.

“If you want to be a participant in the 80 million worldwide car market, you have to do all technologies, otherwise you are not participating,” Zipse said to the Financial  at the same time that the company presented a prototype for its Neue Klasse electric series, which is expected to begin production in 2025.