The European Green Deal: Pressure to Innovate
The EU Green Deal and electric cars are forcing the automotive industry to innovate. The industry can no longer rely on decades-old technology. Check out how nTopology's Business Development Manager, Fabian Grupp, thinks AM can push the industry forward in a first of three blogs discussing this topic.
COVID-19 has turned our plans upside down, both in our personal and professional lives. And every single industry is facing major challenges: hospitality, air travel, retail and so on. That being said, most industries have been subject to fundamental change and challenge long before the virus took hold of the entire world. Changes and challenges such as prefabrication with BIM in construction, disruptive competitive landscapes because of advanced manufacturing, or the need for digitalization-ready infrastructure in general to name a few. With or without the virus, these challenges won’t go away and will continue to disrupt every industry.
One particularly massive challenge is manmade climate change. Last year, the European Commission announced the European Green Deal and, in short, the strategy intends to make the EU carbon neutral by 2050; its official outline indicates that, “transport accounts for a quarter of the EU’s greenhouse gas emissions, and is still growing,” hence the need to curb the problem.
So what does that mean to us and why are you reading this on the nTopology blog? The Green Deal is forcing automotive companies and their suppliers to rethink how they design and manufacture. In a three-part series, I will first look at why automotive companies and their suppliers are under more pressure to innovate than ever before. The second and third installments will describe current market developments in Additive Manufacturing and how computational modeling combined with new materials enable engineers to rethink traditional concepts.
Technological shift: combustion to electric
In public debate, electric cars and associated infrastructure are being viewed as the most feasible route to steer personal transport towards these CO2 goals with other concepts like hydrogen fuel cells moving out of the picture. Essentially, the debate is leading us towards a one for one replacement: classic defining technology replaced entirely with new technology (aka the end of the combustion engine for personal transport). However, this example of a full technological pivot is rife with consequences in engineering and manufacturing.
Simply put, automotive companies don’t build most of the parts themselves. At their core, they are masters in maintaining hugely complex, ever-evolving networks of suppliers. We are seeing and will continue to see a large industrial ecosystem being impacted, not only a few household-name companies.
Actively driving the change? (pun intended)
Given that Germany is an automotive country, it is fundamentally shaped by the supply chain and R&D industry that is automotive and therefore the impact of electric mobility is huge.
Did you know that, as early as 2016 Tony Seba (serial entrepreneur and author) said, contemporary combustion engines have around 2,000 moving parts whereas an electric engine has only about 20 parts? How does this 100x factor of fewer parts affect the supply chain and the manufacturing methods? One thing for certain is that this will not affect just car builders and their direct suppliers. Roughly 25% of Germany’s custom machinery sector is dependent on the automotive industry and experts have been discussing the domino effect for ages – the end of the spark plug is nigh. In short, we are already seeing economic effects on the Tier 1 suppliers like Continental or Bosch, both reducing their workforce and restructuring segments of their businesses.
Combustion Engine vs. Electric Engine
A lot of this should come as no surprise, though it may feel that way if you’re judging the somewhat snail-like adoption speed of the industry. For some observers it may look like German car builders are putting more focus on developing shady software and settling Diesel lawsuits than on redirecting their (historically crazy-high) R&D budgets (VW for example put down 12.1B EUR 2018) to comply with the new measures. To help accelerate the change, Elon Musk has come to the rescue with Tesla announcing their second overseas Gigafactory to be built near Berlin, Germany.
Pressure to innovate
A recent article in a Japanese publication, Nikkei Magazine, reminded industry experts of how deep the move towards electric mobility impacts the whole automotive ecosystem. The magazine had a Tesla Model 3 disassembled. The key takeaway: Tesla is five to six years ahead of the competition. This is because of its unique system architecture. By using one central computing unit they are able to coordinate the data streams from all sensors and other sources.
This is much different from the “old” concept of having whole subsystems of a car (e.g. drive train) co-engineered with and supplied by Siemens, Bosch, Conti or any other Tier 1 supplier. And it is massively different from a development perspective, too. Instead of having thousands of proprietary electronic control boards, firmware and communication protocols owned by suppliers, Tesla engineers can centrally coordinate all data and make the system more than the sums of its parts. They have created themselves a development environment they have under control which naturally accelerates innovation with both speed and agility.
Ultimately, the gigantic, traditional automotive industry, with its widespread network, is under pressure to make the EU strategy a reality and to invent new technology and processes. On top of that, competition in the form of Tesla’s novel architecture shows how deeply their supply chains might have to be transformed.
Clearly, the automotive industry is under pressure to innovate. More than just from its new, competitive landscape thanks to Tesla and others but also from the EU Green Deal. Innovation is key to staying ahead of the competition and relevant. Additive Manufacturing could help. Next week I’ll talk about a few applications where I think an immediate impact could be felt. Stay tuned!