BMW Board Member Not Optimistic about European BEV Demand. Regulators Want BEVs, But Europeans Don't.

published: 2019-07-10 15:21 | editor: | category: News

Battery electric vehicles (BEV) have been on the agenda of most auto makers. However, recently during BMW's NextGen event in Munich, BMW executive and board member Klaus Fröhlich surprisingly expressed to reporters that EVs are overhyped. "There are no customer requests for BEVs. None."

Not long before the event, BMW just announced to accelerate plans to develop battery electric vehicles (BEVs). Fröhlich's claim seemed to be disruptive, but in fact there are reasons for his statement.

Mr. Fröhlich primarily responded to the previous public accusation against European carmakers from the lobbying group "Transport and Environment" (T & E).

In a report, T & E quoted the latest emission data from European Environment Agency (EEA), and stated that Europe's sales of BEV are apparently much fewer than that of China or the US. The key reasons were that BEV options and availability are limited. T & E said that European car makers are "deliberately postponing sales of cleaner cars to maximize SUV-fueled profits."

T & E expressed that when it comes to environmental protection, automakers only do what the laws require them to do.

To respond to this accusation, Fröhlich stated that T & E ignored the most important element: European customers in fact do not want to buy BEVs for the 2 following reasons.

First, Europeans' driving habit is different than that of the Americans. In the US, Americans might drive a different vehicle for a different purpose, such as pickups, SUVs, and smaller cars. Contrarily, Europeans typically own one vehicle per household. Therefore, Europeans will hesitate to simply rely on a BEV. The lifestyles between Europeans and Americans are quite different, and American lifestyle does not necessarily apply to that of Europeans.

Second, the charging infrastructure for EV is not widespread enough. It will take a long time and a lot of money to install and construct charging infrastructure. Hence, Fröhlich predicts that diesel engines might survive for at least 20 years, and gasoline engines for at least another 30 years. As for the markets of Russia, the Middle East, and middle-and-western China, because of the lack of charging infrastructure, there might still be another 10~15 years of demand for internal combustion engines.

BEVs currently mostly sell well in the coastal part of China and California. As for the rest of the regions, they are better off with more powerful plug-in hybrids vehicles (PHEV).

From auto makers' perspectives, Fröhlich pointed out that the costs of battery raw materials for BEVs are far higher than the costs of internal combustion engines or that of PHEVs. In the future, when the market demand for battery raw materials continue to rise but the supply chain cannot satisfy the demand, the costs of battery raw materials might grow without falling.

If governments can offer huge incentives, BMW can manufacture millions of BEVs for the European market. Only regulators want them, but Europeans don't want BEVs, stated Fröhlich.

(Collaborative media: TechNews; Photo credit: Stephen Kruso via Flickr  CC BY 2.0)

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