<div id="readability-page-1">Munich: Oliver Zipse, Chairman of BMW, presents the BMW iX3 on stage at the world premiere before the start of the International Motor Show (IAA Mobility) as the first model in BMW's &#34;New Class&#34;. Photo: Sven Hoppe/dpa (Photo by Sven Hoppe/picture alliance via Getty Images) dpa/picture alliance via Getty Images  Europe’s auto industry has weathered President Trump’s tariff turbulence but when it gathers in Munich on Tuesday leaders will be grappling with more existential problems.  These include the threat to Europe’s auto industry from China, made worse by the European Union’s precipitate race to force an EV new car monopoly by 2035.  The IAA Mobility 2025 (short for Internationale Automobil-Ausstellung) show will open September 9 through September 14 as sales are treading water in Europe and economies stagnate.  GlobalData said new car sales in Western Europe slid 1% in the first half and will contract 1.1% for the whole year to 11.42 million. That doesn’t seem too bad until you remember pre-Covid, sedan and SUV sales were about 4 million a year higher.  Consultants Accenture said Europe’s economic weakness matters but this is a cyclical problem. It’s the structural problems that need to be addressed like the switch to electric vehicles and the threat from China.  “The competitive landscape is changing dramatically, and these changes are here to stay. The shift toward electromobility is irreversible and while we can debate the details, the transition itself will happen,” said Jürgen Reers, Accenture’s Global Lead Automotive &amp; Mobility.  MORE FOR YOU  “At the same time, Chinese competitors are not going to disappear. There will be further changes and market consolidation, but the fundamental shifts are structural — not cyclical, not temporary, but permanent,” Reers said.  “The crucial question is: Will Europe succeed in securing and restoring structural competitiveness in the long term, making the mobility industry sustainable and economically viable,” he said in an email exchange.  The physical makeup of the show underlines the problem.  “Of the 29 carmakers present in 2025, 10 are European and 14 Chinese,” said French automotive consultancy Inovev in a report.  “Of the 31 expected new products or renewals presented in our analysis, 23 are electric vehicles, 3 plug-in hybrids and 2 F-HEVs (fuel-cell hybrids),” the report said.  And it’s not just electric vehicles from the east that threaten to undermine balance sheets. China is also aiming to challenge what many Europeans thought was its industry’s unassailable lead in internal combustion engine technology. This might turn out to be as useful as the Maginot Line.  Europe’s ICE technology, culminating in the premium sector of Mercedes, BMW, Audi and Porsche is threatened, according to Professor Ferdinand Dudenhoeffer’s Center for Automotive Research.  The European auto industry is also lobbying politicians to persuade the European Union to drastically modify its rules which mandate that all new cars sold by 2035 must emit no carbon dioxide, effectively forcing them to sell only electric cars. While legislating to force Europeans to only buy new EVs by 2035, its parliamentarians failed to notice only China had the technology to supply them at affordable prices.  Last month, Mercedes CEO Ola Kaellenius joined other auto industry leaders using strong language to demand the EU’s CO2 plan be killed or diluted.  Ola Kaellenius, chief executive officer of Mercedes. Photographer: Ben Kilb/Bloomberg © 2023 Bloomberg Finance LP  “We need a reality check. Otherwise, we are heading at full-speed against a wall,” he said, adding the European car market could collapse if the CO2 plan goes ahead. Kaellenius is also head of the European Automobile Manufacturers Association (ACEA). President of the European Commission Ursula Von der Leyen will host European automotive sector executives September 12 to discuss this demand.  The bottom line for the industry is a change to “technology choice” which would extend the lives of hybrids, plug-in hybrids, extended range electric vehicles, and allow so-called e-fuels to power ICE cars.  Meanwhile the show will star BMW’s new EV technology known as Neue Klasse. The BMW iX3 will be the first iteration of the new technology said to deliver about 30% more range and 30% faster charging. This technology and design will be used for over 40 new or updated models across EV and ICE models.  Other notable models at the show include the Mercedes GLC and Volkswagen ID.2, now known as the ID.Polo. The latter will be the cheapest EV yet for VW and its own mass market brand, and Skoda and SEAT. Its expected price is around €25,000 ($29,400) and it will launch next year. Meanwhile BYD’s equivalent, the Dolphin Surf, is already on the market starting at €7,000 ($8,200) less.  The Volkswagen concept car, the ID.2, will be sold as the VW ID Polo. Photo: Marcus Brandt/dpa (Photo by Marcus Brandt/picture alliance via Getty Images) dpa/picture alliance via Getty Images  CAR’s Dudenhoeffer says it’s not just EVs from the likes of BYD that are a threat in Europe, it’s ICE too and again because of China’s price leadership. And it’s aimed at the mass market as well as the premium sector.  “Our analysis shows that we can’t simply assume that our combustion engine monopoly protects us. China is showing that it largely no longer exists. The story of the European combustion engine monopoly is increasingly becoming a thing of the past. They are aiming for the center of the market, not the periphery,” CAR said.  If European automakers feel they face an irresistible Chinese force which will inevitably consume them, they might take some comfort from a recent Reuters’ BreakingViews opinion column.  The column headed “China’s carmakers are heading for a crash” talked about a vicious price war in China that has lasted more than two years. China’s auto industry suffers from acute overproduction. Sales last year totalled 27.6 million, but production capacity hit 55.6 million. This explains the vigorous Chinese attempt to build up sales in foreign markets, and Europe is potentially the richest, given that U.S. tariffs effectively block sales there.  The Chinese industry badly requires consolidation.  “Bankruptcies and redundancies look hard to avoid. Absent a sudden huge surge in demand, swathes of China’s car industry are on a collision course with financial ruin,” columnist Katrina Hamlin said.</div>

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<p>The Munich Auto Show highlights the challenges facing Europe's auto industry, particularly the threat from Chinese competitors and the EU's push for an all-electric vehicle market by 2035. Sales in Western Europe are projected to decline, with a shift towards electromobility seen as irreversible. Industry leaders, including Mercedes CEO Ola Kaellenius, are calling for a reevaluation of the EU's CO2 regulations, warning that they could jeopardize the market. The show will feature new electric models, including BMW's iX3, which promises improved range and charging speed.</p>

Chinese Electric Existential Threat Will Dominate Munich Auto Show