(Oil & Gas 360) – Earlier this week, the world-famous Paris Auto Show saw some international political heft inserted into its usual line-up of fast cars over the European Union’s electric vehicle (EV) mandates.
BMW’s CEO Oliver Zipse warned that EU efforts to virtually eliminate the production of internal combustion engines (ICE) and diesel-powered vehicles over the next ten years would have negative effects expanding beyond the European auto industry.
The first regulations to phase out ICE are due to take effect next year, followed by slowly reducing the levels of permitted emissions until they reach basically zero in 2035.
Emissions controls for trucks and lorries are given longer timelines, with the EU setting a 90% reduction figure by 2040.
Over 70% of a barrel of oil is used to produce gasoline, diesel, and other fuels.
Zipse cautioned against any EU measures that would allow China to increase its supplier power to further dominate the battery supply chain while questioning the wisdom of abandoning decades of global technological and market competitiveness across the continent that has designed and produced some of the world’s most iconic automobiles.
BMW is not alone. Volkswagen and Renault say the EU targets are unrealistic, and the fines imposed for missing them are too punitive in light of lagging EV demand. Late this spring, Mercedes Benz reversed its course on phasing out ICE-powered vehicles by 2030, and the Italian and French governments have voiced similar concerns.
Violating the mandates on the EU’s emissions limits could cost carmakers multimillion-euro fines.
The Chinese auto industry has also divided the EU regarding tariffs on Chinese EVs.
Germany, with the largest economy in the EU, opposes the extra duties on Chinese-imported EVs; Germany’s carmakers export more cars to China than any other country.
The tariffs tumult underscores the implications of central planning within the EU. Twelve countries in the EU abstained from voting on the topic of Chinese tariffs. Four others joined Germany in opposition, but ten agreed earlier to impose 35% tariffs.
The dissension comes following a 400-page report on the EU’s lagging global competitiveness relative to rivals China and the United States submitted last month by Mario Draghi. He served the EU for nearly fifteen years as President of the European Central Bank until 2019, after which he was Prime Minister of Italy during COVID through 2022.
The Paris Auto Show concludes October 20.
By Jim Felton for oilandgas360.com
