BMW’s chief has warned that a net zero ban on petrol or diesel cars could lead to the extinction of European car manufacturers by lower-cost Chinese competitors.
Oliver Zipse stated that mid-market car manufacturers in Britain and EU will not be able to compete on price with Chinese competitors when it comes to electric cars.
Mr Zipse stated: “The segment of the market for base cars will either disappear or be ignored by European manufacturers. I want to send out a warning: I view that as a risk.
Chinese manufacturers are able to produce electric cars at a lower cost than their European counterparts, as the country began building its lithium-ion battery industry earlier.
According to Jato Dynamics, the average price of an electrical car in China last year was less than €32,000, or £27,300, as opposed to €56,000, in Europe.
The Fiat 500 is the cheapest European-made EV in the UK, at £28.195.
The comparison is not perfect because Europe has higher safety standards.
There are concerns about the price gap and the looming bans of petrol and diesel vehicles in the EU and UK. This will hand the affordable car market to Chinese manufacturers.
From 2030, the sale of new petrol or diesel cars in Britain and in the EU will be prohibited.
Mr Zipse stated that his concern was focused on the lower end of the market and not higher-end producers such as BMW. Luxury manufacturers are better protected by higher margins and brand value.
The comments of the Chinese automaker are coming just weeks after the company’s largest electric carmaker called for the industry to “demolish” competition and unite .
Wang Chuanfu, founder of BYD, said that “the time has come for Chinese brand”.
Andy Palmer, former chief executive of Aston Martin, has stated that manufacturers in Europe and America face a “real danger” due to the rise of Chinese rivals.
Renault and other mass market manufacturers admit they can’t compete with rivals such as BYD – backed by Warren Buffett a billionaire US investor – and Elon Musk’s Tesla.
Gilles Le Borgne, Renault’s head engineer at the The International Motor Show (Munich), Germany told reporters: “The best strategy is to keep prices stable and adjust fixed costs.”
BMW is investing some of its financial resources in hydrogen fuel, an alternative to batteries. This technology relies less on lithium and other difficult-to-find battery parts.