BERLIN — German car makers are likely to stop developing new combustion engines in as little as six years as they focus investments in electric cars and self-driving technology, Continental A.G. executives said recently.
Companies such as Volkswagen A.G., Daimler A.G. and BMW A.G. face pressure to clean up their diesel engines two years after VW's emissions test-cheating scandal broke.
German politicians and car bosses agreed Aug. 2 to overhaul engine software on 5.3 million diesel cars to cut pollution. However, environmentalists vowed to press ahead with legal action aimed at banning polluting vehicles.
Continental, which makes regulators for exhaust gas cleaning systems in diesel cars and nitrogen oxide-measuring sensors, expects German car makers to abandon efforts to develop combustion engines from about 2023.
"A new generation of combustion engines will again be developed, but after that (around 2023), a further development will no longer be economically justifiable because more and more work will switch into electric mobility," Conti CFO Wolfgang Schaefer said Aug. 3.
The United Kingdom and France announced plans to eventually ban sales of new diesel and gasoline vehicles and Tesla Motors Inc. has launched its first mass-market electric car.
Separately, Mr. Schaefer said he does not expect German car makers to push for price cuts to help contain the costs of upgrading diesel engine software and offering scrapping incentives.
VW, Daimler and BMW are preparing for software updates to cost at least $592 million and for scrapping incentives to be even more expensive, Germany's VDA auto industry lobby said.
"We always have price pressures in our industry," Mr. Schaefer said.
"We expect no particular changes this year from what we are used to," he said when asked whether he expected car makers to seek price reductions in the wake of the diesel agreement.
This somewhat contrasts with Continental stakeholder Schaeffler Group, which in June cut its annual profit guidance, citing increased price pressures in the automotive sector and higher development costs related to electric cars.