the future of the car

The way is clear: E-mobility is to play a major role in the success of the traffic turnaround

As is so often the case, the challenge with studies is to look closely at what has been investigated. Is it the local emissions of the drive? The pollutants produced for the entire life cycle – from production to scrapping or recycling? Is it a question of whether e-drives are more climate-friendly than internal combustion engines – or how much more climate-friendly they are? But experts agree on one thing: without electric vehicles, there will be no sustainable mobility in the future.

“The technology is at its furthest stage, and the market has already decided in favor of it,” explains Professor Henning Kagermann, Chairman of the National Platform for the Future of Mobility. “It’s irreversible that we have to move away from the combustion engine,” also says Michael Ewert, Executive Vice President Global Sales Original Equipment at tire manufacturer Michelin (see interview). That doesn’t mean that electric propulsion is the only alternative, but it is the most popular one at the moment. “We are open to all technologies and support car manufacturers in making mobility more climate-friendly by whatever means,” says Ewert. Michelin is showing what this can look like, for example, in its collaboration with Volvo.

Sustainability meets technology

The automaker has set a goal of turning its back on internal combustion engines by 2030. That puts Volvo ten years ahead of the alliance of some 30 states, municipalities and companies (including Volvo) that agreed at the climate conference in Glasgow to “work together to ensure that all sales of new cars and minibuses generally by 2040 and in leading markets are
‘are emission-free no later than 2035,’ as the statement puts it. “In Germany, about 20 percent of the energy we use goes into car transport. And that energy is about 95 percent fossil fuel. So we have to do something,” says Lutz Stiegler, Solution Manager Electric Propulsion at Volvo.

But the development of e-cars is not just a question of powertrain. Other parts need to be adapted as well – tires, for example. That’s why Volvo is working with its suppliers from the early stages of development. But vehicle development is only one side of the story, says Stiegler. “How quickly electromobility becomes established will depend on how the topic of charging stations is pushed.”Ewert takes a clear position: “It would be an indictment if the charging infrastructure were to fail.”

Mobility as an overall concept

But do the general conditions fit? The German government has successfully subsidized the issue, Kagermann said. One example: “In the private sector alone, policymakers have set around 620.000 wallboxes promoted. That’s already a success.”But if the goal is to have a nationwide charging infrastructure in Germany by 2025, other players are also needed: car manufacturers, producers of charging stations, network providers that lay the lines, and oil companies that develop new filling stations.

“It’s about a new overall concept for mobility. All stakeholders must play their part,” says Stiegler. Digitalization should not be forgotten. “It’s not just the powertrain that will determine the future, but also software development,” says Kagermann. New players are already entering the market, such as Google and Apple, which are developing cars. Michelin is already adapting to the growing need for connectivity. “We are equipping all tires with RFID chips by 2024 to create connectivity,” says Ewert. “We are currently experiencing a surge in innovation. With e-cars, we are already on the right track.”

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From automakers to suppliers: What the switch to e-mobility means for suppliers and manufacturers

The supplier’s view

is Executive Vice President Global Sales Original Equipment at tire manufacturer Michelin

What influence do e-drives have on the development and production of tire?

To what extent does noise play a role?

What role do recycling and the circular economy play?

Right of way for e-cars

“Germany still has some catching up to do. But a lot has happened in the last year or two in terms of electromobility.”
Alexander Klein, Vice President Development of Climate and Environmental Financial Products for Corporates, KfW

The car is still the Germans’ favorite child. Whether Mercedes, VW or BMW – your own car stands for freedom, joie de vivre and mobility. However, transportation is a significant contributor to overall CO2 emissions and thus global warming. Therefore, the transport turnaround, the transformation of the mobility sector, must succeed. This means the end for diesel and gasoline.

But how far along is Germany on the road to achieving this?? “When it comes to the switch to e-mobility, we’re not far behind other countries,” says futurologist Sven Gabor Janszky in the DUP Digital Business Talk. “Germany still has some catching up to do. But a lot has happened in the last year or two with regard to electric mobility,” says Alexander Klein, Vice President Development of Climate and Environmenal Financial Products for Corporates at the development bank KfW in Frankfurt am Main. “We’re not where we want to be yet, but we’re on the way. We expect 150 billion euros to be invested in the mobility revolution over the next 30 years.”

Markus Emmert, a board member at the Bundesverband eMobilitat (German eMobility Association), points out: “We’re talking aboutCO2-free mobility. It means we need to invest just as much in expanding renewables. Because without them, the traffic turnaround cannot succeed.”

More smaller e-models needed

Interest in e-mobility must also be aroused among broader strata of society. The KfW Energy Transition Barometer – an annual survey by the development bank of around 4.The results of a survey of the current and future use of energy-relevant technologies by a total of 1,000 households in 2021 showed “that the greater proportion of those who buy an electric vehicle belong to higher-income households,” says Klein.

“The charging infrastructure must definitely include e-scooters and e-bikes as well.”
Markus Emmert, Board of Directors, German eMobility Association

If all traffic is to be electrified, however, everyone must be brought along, Klein continues. The vehicles are currently so expensive because investments are being made primarily in high-class models such as SUVs& Co. Is invested, Emmert emphasizes. “We must ensure that many more smaller models are also fully electrified.” Given the high subsidies, these would then also become affordable for households with a low income.

E-cars for identity management

Janszky, a futurologist, explains the fact that more expensive cars, such as Tesla, are enjoying such success by the fact that the high-end car segment falls into an area “we call identity management. Attributes such as “best quality” or “highest price” move into the background. The customer desire to express a positive identity with a vehicle is becoming stronger. Products, corporate and personal brands would gain weight as identity carriers. “We want to show that we are something special,” says Janszky.

“The upper motor vehicle segment falls into an area we call identity management.”
Sven Gabor Janszky, futurologist

Traditional manufacturers would have served only two identities to be able to show “I’m rich” and “I like to race”. Tesla buyers today, however, would want to demonstrate that they are quiet and “eco” – and they want to showcase their Silicon Valley mindset. Emmert says: “Tesla has managed to turn a car into a lifestyle product.” And Klein adds: “This sounds like the Apple story.”

Broad-based charging infrastructure

Despite all the enthusiasm for e-cars, however, experts also warn against focusing exclusively on electrification. “We will not achieve the transport turnaround and the climate targets by switching from gasoline and diesel to electrification alone. The charging infrastructure must also include e-scooters and e-bikes, for example,” says Emmert. In the future, he says, mega-cities in particular will be forced to push cars out of city centers. “Otherwise we’ll just be stuck in traffic.”

Janszky predicts: “There will still be cars in the centers in 2030, but there will be far fewer private cars.” It would increasingly be robo-taxi fleets, i.e. vehicles that drive autonomously. There are already three licensed fleets of robo-taxis in regular operation worldwide; in Munich, one will begin test operations next year. Such offerings would shape cityscapes in 2030.

Mobility Roundtable: Experts offer insights into the future of mobility

And this would also save money: If a distance is covered by private car, the costs are about five times higher than using a robo-taxi, according to Tesla’s calculations. Futurologist Janszky: “We need this cost-effective alternative and must do everything to ensure that it is available as quickly as possible.”Then the social and political discussions to limit the use of private cars in cities would be easier. For Emmert, the way to get there is to electrify private vehicles. But this must also be flanked by new traffic concepts and a significant improvement in local public transport.

Remove bureaucratic hurdles

However, there are many obstacles to this in Germany. Example: the planning approval process, for example for laying new rail lines. In Germany, this would take “tens of years, whereas in China it only takes half a year,” says Emmert.

KfW expert Klein goes one step further in terms of electrification: “I would also sit in an air cab if I could work in it on the way to the office.”

Promotional loans for green investments

is Vice President Development of Climate and Environmental Financial Products for Corporates at KfW

SMEs that make green investments receive loans from KfW at almost zero cost and a climate subsidy of three percent. Alexander Klein from KfW explains the program – and points out a new subsidy for charging points.

Some countries, such as Norway, are far ahead of Germany in the electrification of transport. To catch up and meet climate targets, politicians are digging deep into government coffers. With interest rates close to zero percent on development loans and grants, small and medium-sized businesses should also be able to convert more quickly. Alexander Klein, who develops funding programs for companies at KfW, explains the details.

KfW supports companies on their way to greater sustainability as part of the “Climate Protection Offensive for SMEs”. Who is entitled to this funding?

For which measures are these loans available?

And what do the loans cost??

So entrepreneurs are getting a gift of money?

In concrete terms, what does it look like when an entrepreneur buys three electric service vehicles for his fleet for a total of 100 euros?.000 euros buys?

Goes even further Support?

How do entrepreneurs apply for a KfW loan?

Mobility goes in a completely different way

Germany’s industrial heartland is undergoing a transformation of historic dimensions. The automotive industry is breaking new ground – with its own momentum, but also driven by external impetus. While manufacturers have come out of the pandemic-related crisis better than expected, challenges remain.

Starting with supply chains: The pandemic has highlighted their volatility – and even the economic upswing cannot hide the resulting problems, i.e. the lack of availability of important raw materials. According to the consulting firm Alix Partners, the chip shortage alone will lead to a production shortfall of up to four million vehicles in Europe. In addition, the two megatrends of sustainability and digitalization continue to dominate, and carmakers and suppliers alike must address them.

Car manufacturers or software forges?

All factors together act as an accelerator of the transformation. In practice, questions arise as to whether it still makes sense to produce cars with internal combustion engines, whether the sole focus on e-mobility is the right one, what role synthetic fuels play and where green hydrogen can be used.

“What do you think about climate protection??”This has long since become a crucial question for the industry. The question of whether, on the other hand, is no longer open for discussion. Legal regulation and the public interest ensure that this is the case.

The second decisive factor is whether carmakers will be needed at all in the future, or whether software companies will be more in demand? Or is at the end the fusion of both most purposeful? Because networking, intelligent assistance systems, autonomous driving, digital business models: all these aspects will determine success in the future. Especially against the backdrop of new players who – often technology-driven – have set out to disrupt the market that was once thought to be distributed.

The sharing economy and trends such as urbanization and a different consumer need are doing their bit to force the change on the customer side as well. The large automobile companies are here just as demanded as their counterparts on technology side – the Start-ups -, the science and naturally the politics setting a framework.

Trend 1: Autonomous driving and flying

Autonomous driving is no longer a vision of the future, but part of our reality. Many car owners are already familiar with the first stage of autonomy, assisted driving, from their daily work. From lane departure warning, brake assist and proximity control to automatic parking and cruise control: All of this falls into the category of autonomous driving. A basic distinction is made between five levels: assisted, partially automated, highly automated, fully automated and finally autonomous. And the latter is already being tested in many places around the world.

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