The chief financial officer of BMW (BMWG.DE) stated on Friday that the inquiry into subsidies for electric cars (EV) built in China and sold to Europe might cause more harm than good, and he warned of a possibly significant retaliation from Beijing.
Walter Mertl stated that he would not support harsh tariffs and that the probe would protect those who do not have big sales in China but would influence any carmaker that does business there.
He made this statement about the possibility for China to exact vengeance on European automobile manufacturers. “The backlash, like a boomerang, can be bigger than what one imagined,” he remarked.
The three leading automakers in Germany all agree that China is their most important market. Because BMW ships the iX3 from China to Europe and will begin exporting the Mini beginning next year, the company is susceptible to any tariffs imposed by the EU on imports from China and any potential pushback from China on the company’s sales in that country.
Mertl added that although 90% of BMW automobiles sold in China are made locally, some of the materials used in their production come from Europe and are then imported to China.
China has expressed its disapproval of the EU inquiry, which started its official proceedings on Thursday, stating that it violates the norms of the World Trade Organization and will hinder the expansion of the market for electric vehicles worldwide.
ON TRACK TO REACH FINANCIAL GOALS
Mertl stated that BMW would be able to produce “good numbers” by its revised prediction for a margin on profits before interest and taxes of 9-10.5% in advance of the company’s third-quarter results, which are scheduled to be released at the beginning of the following month.
Mertl said that EV sales were increasing and the firm was on pace to meet its goal of 15% fully-electric sales for the year when asked whether the luxury automaker was experiencing a decrease in demand for EVs, as was reported by Volkswagen (VOWG_p.DE) in recent weeks. Volkswagen had stated that demand for EVs had slowed down.
He said there were still issues with the supply chain regarding logistics and transportation and that these issues may remain for the next half a year.
