BMW CEO Pushes Back Against Combustion Engine Bans

The head of German car giant BMW has urged other car manufacturers to not be overly dependent on selected countries by focusing only on electric vehicles (EVs).

Reuters reported BMW chief executive Oliver Zipse as saying there is still a market for combustion engine cars – echoing similar sentiments made previously by the boss of car giant group Stellantis.

In December Stellantis chief executive Carlos Tavares said that external pressure on car makers to accelerate the shift to electric vehicles potentially threatens jobs and vehicle quality, as manufacturers struggle to manage the higher costs of building EVs.

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Raw materials

It comes as many countries have placed looming bans on the sale of combustion engine cars.

The UK for example has said that sales of new petrol and diesel powered cars and vans will be banned from 2030.

The European Union, California and other countries meanwhile have set goals to end sales of combustion vehicles by 2035 and beyond.

BMW’s Zipse also highlighted that China still mostly controls the supply of raw materials for EVs.

“When you look at the technology coming out, the EV push, we must be careful because at the same time, you increase dependency on very few countries,” Zipse was quoted by Reuters as saying at a roundtable in New York.

Last month Tesla secured another source of nickel, as demand for electric vehicles (EVs) continues to grow, after it signed an undisclosed deal with Brazilian mining company Vale S.A. to supply it with nickel, which is a key ingredient in the batteries used by EVs.

The deal comes after Tesla CEO Elon Musk in July 2020 (just as the Covid-19 pandemic really began to bite across the world), urged the mining community to produce more nickel.

Nickel makes batteries energy dense so EVs can run further on a single charge.

Combustion engines

“If someone cannot buy an EV for some reason but needs a car, would you rather propose he continues to drive his old car forever? If you are not selling combustion engines anymore, someone else will,” said BMW’s Zipse this week.

Zipse has reportedly long advocated against all-out bans on combustion engine car sales, despite the move towards electric vehicles being driven by government policies aimed at cutting greenhouse gas emissions.

However combustion engine cars are constantly improving their emissions, and these new rules tend to ignore the real emissions culprit found on every street, namely the typical house.

Offering more fuel-efficient combustion engine cars is key, both from a profit perspective and an environmental perspective, Zipse argued, pointing to gaps in charging infrastructure and the high price of electric vehicles.

Car manufacturers also need to plan for energy prices and raw materials to remain high by being more efficient in their production and stepping up recycling efforts to keep costs down, he said.

“We have a peak now, they might not stay at the peak, but they will not go back to former prices,” he reportedly said. “How much energy you need and use, and circularity, is important – for environmental reasons but even more for economic reasons.”

Earlier this week Zipse said during an interview with Swiss newspaper Neue Zuercher Zeitung warned the car industry is still at the height of chip shortages.

Zipse said that the world could “start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023.”

This is in line with other assessments.

In January, leading car industry trade group The Society of Motor Manufacturers and Traders (SMMT) warned the chip shortage would continue to hurt British car sales throughout 2022 and into 2023.