Beware of electric-only focus, says BMW CEO

Vehicle manufacturers should be wary of becoming too dependent on a select few countries by focussing on an electric-only strategy.

The warning, from BMW chief executive officer, Oliver Zipse, comes as the Russian invasion of Ukraine has created pressure on supply chains.

Just last month, a shortage of wiring harnesses due to the conflict in Ukraine had overtaken the semiconductor crisis as the biggest supply chain problem for Volkswagen. 

Zipse, who argues there is still a market for internal combustion engine (ICE) cars, has been a long-term advocate against all-out bans on petrol and diesel car sales.

In the UK, new petrol and diesel cars and vans will not be allowed to be sold from 2030. The sale of hybrid cars and vans that can drive a significant distance with no carbon coming out of the tailpipe will be allowed until 2035. 

"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 said at a roundtable in New York, highlighting that the supply of raw materials for batteries was controlled mostly by China.

"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," added Zipse.

The BMW CEO, reports Reuters, explained that offering more fuel-efficient ICE cars was key both from a profit perspective and an environmental perspective, pointing to gaps in charging infrastructure and the high price of EVs.

Companies also needed 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 added. "How much energy you need and use, and circularity, is important - for environmental reasons but even more for economic reasons."

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