BMW CEO calls EU's 2035 combustion engine ban a ‘big mistake', sees strong 2025 sales

BMW CEO Oliver Zipse criticized the EU's 2035 combustion engine ban as a "big mistake," advocating for a more holistic approach to emissions that includes the entire vehicle supply chain and holds fuel producers accountable, rather than setting arbitrary phase-out dates. He argued the current policy overlooks emissions from battery production and fuel sourcing, urging the allowance of climate-friendly fuels post-2035. Despite industry headwinds like tariffs and competition, Zipse affirmed BMW's robust sales outlook, projecting over 2.5 million vehicle sales in 2025, driven by strong growth in Europe.

Analysis

BMW's (BMWG.DE) Chief Executive Oliver Zipse has publicly challenged the European Union's 2035 combustion engine phase-out, labeling it a "big mistake" and advocating for a more holistic regulatory approach that includes emissions across the entire supply chain, from battery production to fuel sourcing. This stance highlights a potential strategic misalignment between major automakers and EU policymakers. Despite this regulatory friction and acknowledged industry headwinds like tariffs and competition, Zipse provided a strong forward-looking statement, reaffirming BMW's target to sell over 2.5 million vehicles in 2025. This confidence is substantiated by sales figures as of August tracking ahead of the previous year, with particular strength noted in Europe. The impending launch of a new class of electric vehicles signals that BMW is not resisting the EV transition itself, but rather arguing for a different, more comprehensive regulatory pathway that could play to the strengths of its existing and future product portfolio.

Key Decisions for Investors

• Investors should monitor for any signals of a shift in the EU's 2035 policy, as a more flexible approach could provide a significant tailwind for BMW's highly profitable combustion and hybrid engine segments.
• The confident 2025 sales guidance of over 2.5 million vehicles, which contrasts with the broader narrative of weak demand, suggests BMW may be gaining market share or proving more resilient than peers, warranting a closer look at its relative valuation.
• The launch of the new EV class is a critical catalyst; its market reception will be a key indicator of BMW's ability to successfully navigate the long-term transition while managing its vocal stance on current regulations.