BMW CEO: Europe must cancel petrol engine ban to reduce reliance on China

PARIS (Reuters) - Europe must cancel its plan to ban new fossil fuel-emitting cars from 2035 to reduce reliance on China's battery supply chain and play to its technological strengths, BMW's chief executive said on Tuesday.

Oliver Zipse, who has long pushed for regulators to permit various technologies - including alternative fuels like e-fuels or biofuels and hydrogen fuel cell cars - said the mood in Europe was "trending towards one of pessimism" and the region needed a new regulatory framework to remain competitive.

"A correction of the 100% BEV target for 2035 as part of a comprehensive CO2-reduction package would also afford European OEMs less reliance on China for batteries," Zipse said at the Paris Motor Show, adding: "To maintain the successful course, a strictly technology-agnostic path within the policy framework is essential."

In March 2023, EU countries approved a landmark law that would require all new cars to have zero CO2 emissions from 2035, effectively banning diesel and petrol vehicles, and 55% lower CO2 emissions from 2030, compared to 2021 levels.

Carmakers including BMW, VW and Renault, as well as the Italian government, have called for the CO2 targets to be loosened or delayed, fearing the impact of heavy fines because of lower-than-expected EV sales.

Still, Zipse's home country of Germany has rejected an early review of the targets, given the need for clarity for industry and the urgency of tackling climate change.

Also in Paris, the head of France's auto association PFA stopped short of calling for the 2035 ban to be abolished, but said it was necessary to quickly "come back around the table" to discuss the review of the targets, currently scheduled for 2026.

(Reporting by Victoria Waldersee, Gilles Gillaume in Paris; Editing by Bernadette Baum and Matthias Williams)