BMW’s president, Oliver Zipse, took a whirlwind trip to Spain a few days ago. He spent just one day in Madrid, where he was received by His Majesty King Felipe VI at the Zarzuela Palace with Florentino Pérez (given that BMW is one of Real Madrid’s sponsors) and chatted with the staff of the Spanish subsidiary. It is chaired by Manuel Terroba. After all this, the president of the German brand announced the details of the new phase of the brand, where design and technology go together, in a special meeting with five Spanish media, including Prensa Ibérica. It also analyzed the current situation in the industry with the advancement of Chinese brands, the end of internal combustion engines and regulatory changes (Euro 7) towards the gradual adoption of electrification.
There has been a lot of talk about legislative changes and Euro 7 lately. What is your opinion on this matter?
We are unhappy with the Euro 7 proposal, the established times, its content and the way it is being carried out. We don’t know all the technological requirements they intended from the starting point. Let’s also not forget that Euro7 aims above all to improve NOx emissions (nitrogen oxides), but for the first time emissions from brakes and tires will also be measured. The problem is that we don’t know how to measure it, there is no methodology, no system on how to measure it, and so we believe there can be no regulation. When they ask us to reduce a set of emissions, they don’t care whether it’s measured uphill, with a cold engine, or under load. And it still has to comply with emissions reductions. We do not see this as consistent.
It has been said before that this rule limits investments. electric carHowever, when applied to a letter, its negative effects can go even further…
Actually. If this is too stringent, many manufacturers will not be able to meet these requirements, especially in the small car segment that is most prevalent in Spain. This means that this segment of non-electric, relatively affordable small cars is at risk of extinction. This represents a significant social risk. First of all, because this would mean the early end of the internal combustion engine. It will end not in 2035, but in 2027 or when the regulation comes into force. And the most important thing to keep in mind is that electric cars will not be the main market and they certainly will not be able to dominate it.
With this regulation, banning internal combustion engines in 2035 is also on the table. Is this logical or are we going crazy?
I’m just saying that we need to be very careful about our own regulations and decisions like early Euro7, the end of internal combustion engines. I think Europe needs to carefully analyze whether to focus on a single technology for all cars (electric vehicle). Maybe instead of complaining about competition, we should ask ourselves “what are we doing?” This is a serious issue and we need to think about whether we are on the right track and whether it can be fixed.
If we move towards a sudden change in technology, competition will increase significantly. And this will be something we do to ourselves, like shooting ourselves in the foot. European industry will need to review the policy. There’s still time to react. There are more alternatives in the fight against climate change. The new energy vehicle strategy needs to be low carbon, not zero carbon. We can talk about high-range, hydrogen plug-in hybrids… There are alternatives. Not everyone has access to an electric car because there is no plug nearby to charge it.
With Euro 7, small cars will disappear and this is a social risk. Moreover, if there is a strict standard, the internal combustion engine could become extinct even before 2035.
What do you think about synthetic fuels called e-fuels?
New car sales in Europe generally range from 11 to 13 million cars annually. The total fleet is 260 million, most of these cars have internal combustion engines. The average age of this park is high (in Spain, for example, it is 14 years). My question is: What contribution do these 14-year-old cars contribute to reducing emissions? I see emissions regulation constantly looking at new cars, but in reality the biggest polluters are in that fleet, which are the largest and oldest. Therefore, these are e-fuels to reduce CO2 emissions with synthetic fuels. These are the only options available to reduce CO2 and that is why we need synthetic fuels. We think the internal combustion engine could be phased out in 40 or 50 years, and in the meantime we can keep cars running on synthetic fuels.
Do you think politicians are thinking more about taking cars off the streets and taking advantage of the electricity race?
They already stated that this was their intention. I don’t think they could survive this long politically if they tried. They can do it in 50 years, but they can’t do it in 12 years. The car is private property and cannot be taken away from you. Nowhere in the world. If emission engines end with current regulations and synthetic fuels don’t eventually arrive… what will happen to old cars? Driving an old car is not the future image we want to convey of a modern, efficient and sustainable society. TRUE?
The European Union began to warn about this very competition, that is, the Chinese competition. Do you think we should seek protectionism in the face of its progress?
I don’t know all the details, but I would like to say that at BMW we support free trade and equal conditions for everyone. So if we feel like it’s not a level playing field, it’s something that can be examined. This is good. However, personally, I am strongly against any form of market protection. Because there are many markets and situations. For example, BMW also has a lot of shares in China with a good percentage of sales (almost a third). This means BMW is competitive in China. 85% of our sales in China consist of automobiles produced in China. We import only 15 percent of what is sold in China.
What is the direction of BMW in the coming years?
A few weeks ago in Munich we introduced BMW’s new vision, the ‘Neue Klasse’ (new class). This is not a car or a prototype, but a vision that envisions six new models arriving between 2025 and 2027. They propose a new all-electric powertrain that includes a lot of digitalization and is based on a circular economy. It’s like a big tech cluster. Technology, together with the gradual increase in electromobility, is certainly our strongest strategy for the future. But we will continue to have the combustion engine and the plug-in hybrid will gain efficiency. We cannot leave behind those who do not want or cannot use electric cars in the next decade.
However, the path of electricity continues on its own orbit….
Yes, in 2023, BMW will double its electric car sales. This means that approximately 15% of total sales consist of 100% electric cars. This rate will be 20 percent in 2024 and 25 percent in 2025. We hope to reach 30% in 2026. And before 2030, 50% of our BMW sales will be fully electric.