BMW Says EV Mandates Are A 'Dead End Street'

"Black and white" thinking can't solve our climate problems, its CEO says. Changes must be consumer-driven. Is he right?

BMW CEO

Photo by: BMW AG.

Mack Hogan

By: Mack Hogan

May 19, 2025 at 2:27pm ET

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BMW is not having a good time. Like other German automakers, its sales are collapsing in China, and the rest of the world can't make up for that lost profit.

BMW's first-quarter earnings plunged 23% this year. And that was before U.S. auto tariffs went into effect. One of the only bright spots came from the company's EV business, which saw a 32% year-over-year gain last quarter.

Despite that, BMW thinks regulators are pushing too hard for EVs. Its CEO wants everyone to slow down.

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"We take ambitious political goals seriously, but we don’t believe in technically one-sided regulations that limit supply," CEO Oliver Zipse said during last week's annual shareholder meeting. "The same principle applies to the circular economy. Here, too, only a comprehensive approach can enable and stimulate investment. Because, as a standalone technology, e-mobility leads down a dead-end street—that much is now clear. The differences are simply too great, even just within Europe."

BMW Neue Klasse prototypes

BMW's electric and software-defined future is riding on its upcoming Neue Klasse models, which promise to be a generation ahead of its existing EVs.

Photo by: BMW

The differences he's referring to are in adoption rates: He went on to note that while EVs make up 60% of sales in Belgium, they're only 4% of the market in Italy. As I covered recently, this business is becoming less global and more regional. That leaves automakers scrambling to ensure they have competitive internal-combustion products for some markets and flagship-class EVs for others. It's a tough balance.

BMW is among the better-positioned companies, with internal-combustion and electric products that I'd consider near the top of their respective classes. Still, its position as a luxury brand means its volumes are small, making it harder to invest simultaneously in ICE, hybrid and EV options. It's reaping the rewards of being an early innovator in the EV space now, but it's unclear whether it can remain on the cutting edge.

Yet there's another undercurrent here. Sure, automakers have always opposed tighter regulations, but they have certainly gotten more vocal about it in recent months. I blame tariffs and China's ascendance. Western automakers were already struggling to make EVs profitably and struggling to convince U.S. consumers to buy them.

But now they're fully aware that they can't really compete in China's home market, that the U.S. is taking a far slower path to electrification than expected and that many of their existing products are going to get 25% more expensive in one of their largest markets.