Electrification, digitalization, and the circular economy go hand in hand

Interview Rudolf Bencker, Senior Vice President Inventions and Innovations Management, powertrain

BMW has steadily grown its sales of battery-electric vehicles but stands by its Policy of powertrain technology openness. We spoke to Rudolf Bencker, Senior Vice President Inventions and Innovations Management, about the company’s powertrain and digitization strategies, starting from early research.

BMW’s so-called „Technology Trend Radar“ monitors trends that extend beyond automotive technology. How does this affect automotive development?

Let me begin with the early innovation phase of development. Our global tech offices are continuously scouting for upcoming tech trends. Those Tech Offices are basically sensors that help us understand new developments in different regions and all the relevant tech hotspots. We have Tech Offices in Shanghai, for example, in Seoul, Silicon Valley, and even Israel in the field of cybersecurity. We want to see what’s trending and how that might be relevant to our business model. So, besides technology, that means social trends as well. On top, we regularly publish the Technology Trend Radar, making our Knowledge accessible to everyone. This helps us engage with other players, such as scientific institutions or startups, or perhaps initiate collaborations.

Could you give an example of this kind of cooperation?

Our cooperation with Toyota on fuel cells is a good example. For us, it adds another option for customers who need to cover long distances with minimum downtime, meaning they can’t stop to recharge. So, it’s a meaningful supplement for battery-electric mobility. BMW still stands for technological openness. That’s why, besides BEVs, we will also offer customers PHEVs, combustion engines, and FCEVs in the future, depending on what makes sense in the specific context. None of us has a crystal ball. And given the volatility we’re currently experiencing and the large number of different regions, we need flexibility – flexibility for our customers and flexibility within our company. For example, we can build a BEV, followed by a petrol-engine vehicle, on the same production line, and we’re doing this with the actual 5 and 7 Series.

You haven’t mentioned EREVs, which are commonplace in China. Could they be a possibility for BMW in Europe, too?

China boasts a strong charging infrastructure, though it remains limited in rural areas, particularly during holiday travel. A similar situation exists in Europe. The BMW Group is committed to technological openness, including the promotion of PHEVs in Europe. The appropriate range for PHEVs is a nuanced discussion centered on cost-effectiveness. There is a balance to strike between transitioning to a BEV with a larger battery and the practicality of PHEVs. Our PHEVs, with a range of approximately 100 kilometers, align well with customer expectations regarding price. It‘s important to note that a more extended range requires a bigger battery, which can complicate financial viability when combined with a combustion engine. Currently, our PHEV offerings, particularly the X5, remain popular, consistently selling around 200,000 units annually. We are pleased with our position in this segment, and the „Neue Klasse” will further improve charging speed and range.

Digitalization and generative AI are also taking off. What opportunities do you see for harnessing these tools in vehicle development and in the vehicles themselves?

Product development and generative AI fundamentally share a similar approach. Both aim to generate data – whether AI produces texts, images, software, 3D models, or CAD data – faster, more creatively, and more efficiently. Potential use cases include early-stage crash simulations, accelerating design and construction processes. Some of these applications are already in place, and AI has the potential to digitalize our entire company workflow. Additionally, AI can enhance drive functions, battery management, and autonomous driving, enabling vehicles to learn innovatively. For instance, we showcased Car Expert at last year’s CES, an advanced companion powered by large language models. Car Expert interacts with drivers and passengers in natural, everyday language, providing a more intelligent and Pleasant experience, ultimately helping us create the perfect companion for our customers.

AI also requires additional computing power, whether in the car or the cloud. So, what impact does in-car AI have on EE architecture and connectivity?

Processing data in the cloud and exchanging it with vehicles via the Internet is certainly feasible and essential for vehicle updates. However, timing is crucial; the data transfer must be swift due to the large data volume. Currently, 5G technology presents some limitations, as it can only support data Transfer to a certain extent. Therefore, we must determine which data should remain in the cloud and which can be processed directly within the vehicle using small language models. I think we’ll probably see edge devices designed for AI right there in the vehicle. These devices will function effectively even in Areas with limited network coverage, significantly reducing data traffic. Additionally, These localized, Specialized edge devices will be more efficient and capable of learning, enhancing overall performance.

Interview: Gernot Goppelt

Ultimately, it comes down to BEV and hydrogen

Interview Dr Manfred Schuckert, Head of Regulatory Strategy & Int. Hydrogen Strategy, Daimler Truck AG

Long-distance transport accounts for a large proportion of CO2 emissions. So, is full electrification the only sensible way forward? We spoke with Dr Manfred Schuckert, Head of Regulatory Strategy & Int. Hydrogen Strategy, Daimler Truck AG, about the challenges and alternatives − and what he would like to see from regulators.

The European Emissions Regulation favours BEV quite consistently. From a regulatory viewpoint, which drives look promising for commercial vehicles from 2030 onwards?

To make a substantial impact on fleet emissions, commercial sector vehicles need to be either zero emission, or virtually zero emission. So ultimately that means battery electric drives, but also hydrogen for fuel cells and combustion engines. Plug-in and full hybrids will contribute too, of course, but only in a minor role. Two-thirds of emissions come from long-distance traffic, so strict decarbonization is a must.

What opportunities do you see in long-distance transport for biofuels or even e-fuels?

When you really look at the big picture and see how the European commercial sector is currently Burning 60 million tons of diesel, we don’t see a significant role for biogas, meaning CH4 or biologically produced methane. Of course, you also have HVO − Hydrotreated Vegetable Oils − and FAME, the classic biodiesel. We’re cautious about FAME because there are quality issues and because it gets into the engine oil, which means shorter oil change intervals, etc. That’s why we recommend only use it as B7 or B10 in small quantities. And when you look at global capacities, availability of HVO is very limited. Global production capacity currently stands at roughly 6 million tonnes, a drop in the ocean compared to the amount of diesel, we are burning every day.

What differences do you see in major markets like North America and India?

You can certainly see differences. The American market is very mileage-oriented. Basically, you have vocational vehicles and long-haul vehicles that must be extremely efficient to succeed. Not many Operators today are using natural gas for long haul transportation, for example. Alongside battery-electric vehicles, hydrogen will certainly play a role.

Some people claim BEVs will work for long hauls in North America, too, because it’s cheap to buy land and build the infrastructure inland.

I think the follow-up costs at the charging stations would be more important than land prices. The grid is not that powerful and stable, so large-scale electrification is scarcely possible at the moment. There are about 3000 subnetwork operators in the US, and their biggest task right now − integrating data from computer centers aided by AI − is already making them borderline unstable. If you want widespread electrification for passenger cars or trucks, that would work in individual areas, but definitely not across the board in the next ten years.

Which drive concepts do you favor for different vehicle segments, from distribution to long haul?

Where electricity is cheap locally, in depots or towns, that’s the home turf for battery electric trucks. As distances grow, hydrogen can definitely come into play, too. You can’t install charging stations at construction sites, for instance. For long-haul work, there is no clear-cut either-or, so we expect to see fuel cells as well as battery-electric drives. By long haul, I don’t mean just 500 km; I also mean − to use a classic example − trips with two drivers who bring strawberries from southern Spain to Hamburg for example. The product needs to reach the customer fast, so you can’t spend many hours recharging en route. It also needs to be cooled − and the electricity for that comes off your vehicle range.

Which type of hydrogen storage for fuel cells will prevail – LH2 or CGH2?

That’s not really a question for us. Given the quantities we need for long hauls, we’ll only transport liquid hydrogen. Otherwise, the transport costs would be prohibitive. A typical tanker truck will carry either about three tonnes of liquid hydrogen or 500 kg to a tonne of gaseous hydrogen. Distribution costs are so high, it just doesn’t add up. Secondly, you can convert liquid hydrogen to gaseous hydrogen at the filling station so that the filling station can offer both options. It’s a relatively efficient process.

How much power does liquefaction use?

The latest plants use about 8 kW for liquefaction, and the per-kilo energy content of hydrogen is 33 kWh. So, that’s roughly 20 percent of the energy content for liquefaction. But that will improve. We’re already seeing 6 kW on the horizon. But this doesn’t mean you lose range in the vehicle − quite the opposite. You lose a little during electrolysis, and then the hydrogen is liquefied and transported. Then, you can refuel the vehicle with minimal energy expenditure. This filling station type is far cheaper than filling stations for gaseous hydrogen, so we see substantial cost benefits there.

How hard is it to transport liquid hydrogen over longer distances?

You can carry about 70 kg of liquid hydrogen per cubic meter, which is much better than if you had to transport it in gaseous form, where you might manage 40 to 50 kg at 700 bar. The transport tanks for liquid hydrogen are basically vacuum flasks − double-walled and vacuum-insulated. We use them for transport from the production site, and also in the vehicles. On a truck, you have two tanks that you can fill with 80 kg of hydrogen in 10 to 12 minutes. It works the same on a larger scale − you can bring hydrogen in from the Middle East the same way as you do LNG. The tanks are so well insulated that it works over long distances. The only noticeable losses are the hydrogen you use to power the ship.

What would you like to see from European regulators to help you develop technical solutions effectively?

We need to streamline the regulations. And we need to question whether the speed of the Regulation is actually manageable. We only have 5 to 6 years to go, to reach the 2030 targets − a reduction of of 45 % CO2 emissions compared to 2019. We’ll have to see whether the customers can manage that. At the moment, multiple member states are not meeting their obligations, neither for infrastructures, nor for the implementation of CO2-based road toll systems. Without greater unity and faster infrastructure rollouts, customers have no incentive to buy electric vehicles.

Interview: Gernot Goppelt

The two-wheeler and passenger car segment in India is growing significantly

Interview Amid Gupta, CEO and Managing Director, Hero Motors

The Indian car market recently became the third largest worldwide and still offers excellent growth prospects. We asked Amid Gupta, CEO and Managing Director at Hero Motors, about the unique features of the Indian market and the company’s plans for Europe.

Many people know Hero Motors primarily for its two-wheelers. What are your activities in the automotive field?

Our brand is widely recognized as a leading player in India for two-wheelers and bicycles. Over the past few decades, our group has diversified into automotive components. Hero Motors‘ core focus is on automotive components, particularly powertrain solutions, with business activities in Asia, Europe, and the US. With facilities in India, Thailand, and the UK, we manufacture complete transmissions for motorcycles and performance cars. With recent investments, we can deliver comprehensive value chain solutions, including design, validation, prototyping, and serial manufacturing of transmission components and systems.

What are Hero’s plans for more automotive business in Europe?

We have maintained a strong presence in Europe for many years, with some of our relationships with OEMs spanning 10 to 15 years. Our customers trust our technology, quality, and collaborative approach, which we continue to build upon. In addition to our UK office, we plan to open a new office in Frankfurt to enhance synergies with our European customers. Moreover, we are actively exploring opportunities to establish a new facility or acquire an existing one in Europe to support final assembly operations for EV components, such as transmissions, motors, and inverters, closer to European customer locations.

You gave interesting insights into the Indian market at the CTI Symposium Berlin. To what extent will passenger vehicles replace two-wheelers on a larger scale?

India’s market is unique, with 60 % of the population living in rural areas and 40 % in metropolitan regions. While people in cities aspire to own cars, many in rural areas face financial challenges that make car ownership difficult. However, with a population of 1.43 billion, even the 40 % urban segment represents a significant opportunity for the automotive market. Currently, less than 3 % of the population owns a car, and last year, two-wheeler sales were roughly four times higher than car sales. For many Indian customers, two-wheelers serve as affordable, practical commuting vehicles, so the two-wheeler market remains significant. There’s substantial growth potential for both the two-wheeler and passenger vehicle segments as both continue to expand.

We remember the Tata Nano, which failed to meet expectations at the time. How do today’s potential car buyers in India differ from people in Europe or North America in terms of expectations?

The Indian car market is not focused on the super-premium segment. Combined sales of premium brands like BMW, Volvo, Volkswagen, and Mercedes total only about 40,000 cars annually, making up roughly 1 % of the market. It’s important to note that premium cars in India are taxed differently; for example, a BMW car that costs 100,000 Euros in Germany is much more expensive in India. Most Indian buyers aspire to buy mid-premium cars, typically priced between 12,000 and 20,000 Euros, and they seek cars with a full range of features. Within this price range, there is a growing preference for SUVs, driven partly by road conditions. As in other regions, SUVs are becoming increasingly popular among Indian consumers, forming 43 % of the market in 2023.

What role does electrification play in India, and what are the specific requirements compared to Europe?

The Indian government is actively promoting electrification, with a strong focus on encouraging the development of charging infrastructure and battery-swapping systems, which are gaining significant momentum. Major OEMs also align their strategies with this shift, making substantial investments in the electric vehicle space. Electrification is particularly well-suited for three- and two-wheelers in India, thanks to their lower range requirements and smaller battery sizes. However, plug-in hybrids are becoming increasingly popular for cars, as they alleviate range anxiety and offer a practical solution for drivers. Personally, I would choose a hybrid, as it reduces emissions while providing peace of mind, even in areas where charging infrastructure is limited. While mild hybrids remain familiar, the growing popularity of plug-in hybrids reflects increasing consumer recognition of their advantages.

How is the energy and charging infrastructure developing? Where will BEVs penetrate the market on a large scale?

India’s energy and charging infrastructure is developing, but it’s progressing more slowly than Europe or China. Currently, only 2 % of cars are electric, though this is expected to rise to 30% by 2030. The adoption of electric cars has been slower than for three-wheelers, which require less complex charging infrastructure. Electric three-wheelers currently make up 54% of the market, with projections showing they could reach 70% by 2030. For two-wheelers, 5 % are electric today, with expectations of 50 % by 2030.

Interview: Gernot Goppelt