The European automotive industry is in the midst of rapid change, with consumer shifts driving innovation at record speed. Along with much of the industry, the Engineer Live team was in Munich this week for Reuters Events’ Automotive Europe 2024 to discuss the industry-wide challenges and opportunities for OEMs, Tier 1s and government leaders in the sector.
In this article, we summarise the key technological trends, innovations and knowledge transfer currently taking place in the automotive space.
Competition with China
One topic that reared its head numerous times across the conference’s sessions was the ongoing competitiveness of Chinese automotive OEMs, who seem to be outpacing their European counterparts not only in terms of speed of production and innovation but also in competitive price points. The first keynote of the day, delivered by Stellantis CEO Carlos Tavares, addressed the topic in length, with Tavares stating the importance for strong cohesiveness between European partners in order to offer competitive pricing for zero mobility solutions. He also pressed home the need to encourage a more stabilised regulatory environment to give European leaders the time and opportunity to innovate the necessary technologies to keep up.
Shell Mobility’s Global Executive Vice President for Mobility, Istvan Kapitany, echoed this sentiment. In his speech, he stated that China was indeed leading the way in EV adoption, with Shell having installed more than 25,000 public charge points in the country alone, and Shenzhen airport hosting the company’s largest EV site.
Also chiming in on this topic was Aiways’ Executive Vice President Overseas Operations, Dr Alexander Rose. His company was the first Chinese start-up to introduce an electric vehicle (EV) to the European market back in 2017 with the launch of the U5 battery-electric SUV, and according to him, “Chinese entrepreneurs are driving the belief in EV. Mobility will be electric in the future, but affordability is still a big issue. Top-down is not the right approach, we need to get to the point where it is affordable so that the masses can drive change.”
Rose went on to say that innovation in electromobility and battery development in China is “beyond what [he] could have imagined two to three years ago,” citing new production methods and increased competition from the likes of Tesla opening a location in the country. “The particular advantage in China is on the battery side. In Germany, planning begins years in advance and by the time we have started building, two generations of batteries have already gone through in China. There is a willingness from Chinese OEMs to take the leap in new battery technology.”
The subject of manufacturing scale also deserves a mention, Rose says: “People want an EV that they can charge quickly and that is cheap – this goes on to next-level manufacturing not just in plants but in other areas. Battery manufacturers in China are innovating at a rate that in Europe we can’t understand.”
Mobility transition
A widely encompassing topic, and one rarely left out of the conversation of recent automotive gatherings, is the ongoing mobility transition. Shell is going through a transition in its competitive business in response, Kapitany said: “Mobility is changing the way people are driving cars and fuelling them. We need to all be significantly better in this new way of mobility - the transition is happening quickly.”
Serving 33 million customers per day around the world at 47,000 shell-branded mobility locations, the company is clearly taking a sizeable step in the mobility direction. The biggest biofuels producer and retailer in the world now has 55,000 public charge points at Shell stations, on-street and destination locations. The company is also experimenting with hydrogen, having implemented 120 hydrogen filling stations in Germany alone, although Kapitany reasoned the move is, “chicken and egg at the moment, but we need to be providing choices for customers and encourage use. We need to listen to customers about what they want, and fuel cells aren’t being bought in big numbers. We need to satisfy customer needs first.”
Looking to the future, Kapitany says the company plans to increase the amount of renewable content in fuels, help truck and HGV customers transition to electric and E-depots by being active in the electric truck charging space, and enlist further partnerships with tech providers to make the EV charging experience seamless.
Software-defined vehicles
Another topic at the forefront of conversation at Automotive Europe was software-defined vehicles, and in particular, where we as an industry are at on this journey. According to Sebastian Clamagirand, Senior Vice President of Automotive Systems and Marketing at NXP Semiconductors, the best user experiences are dynamic, personalised and transformative – and this is made possible by seamless integration of software and hardware.
“The vehicle of the future should be personalised and identify with the driver, able to dynamically adapt to user experiences and demands, such as optimised fuel use on short trips, adaptive driving experiences, advanced traction control, enhanced safety and comfort, or maximising range for long drives,” he said. “The question is: how do we make that happen?”
In his view, a major transformation from hardware-orientated vehicles to software-defined vehicles is required, and the way to do that is to completely change the architecture of current vehicles. Much of this architecture revolves around the Electronic Control Unit (ECU), which can contain tens to hundreds of software and hardware components. Currently, multiple ECUs require separate integration efforts, but consolidating scattered ECUs into a single ECU platform defined by software and enhanced by hardware, “would provide a safe, reliable, software-ready foundation for differentiating driver experiences.”
Closely linked to this topic is the idea of the ‘Connected Car’, which according to Florian Raschbichler – Director of Customer Services at HiveMQ – offers “improved user experience, deeper insights, optimised vehicle performance and new revenue opportunities,” for automakers. Achieving connectivity is not without its challenges, however, such as unreliable networks, unpredictable latency, limitations on two-way communication and fluctuating connectivity demands.
HiveMQ’s MQTT communication protocol is well-poised to solve these challenges though, Raschbichler said, thanks to its IoT messaging protocol, minimal overheads for clients, bandwidth, reliable communication, efficient bi-directional messaging and three Quality of Service (QoS) levels.
Innovations in smart charging
Another major topic at this year’s conference was smart charging. In a panel discussion, Jonathan Levy, Managing Director of energy software company Kaluza, noted the scale of transition happening with decarbonisation with “one of the biggest shifts from unidirectional multidirectional flow, where the customer is put at the centre of the conversation. Smart charging involves anything from scheduling and optimising charging so that it’s cheaper, vehicle to grid (V2G) or vehicle to everything (V2X), but these all put the consumer at the centre, which is better economically and for the planet.”
Alexander Petrofski, VP of Energy Solutions at Volvo Cars, joined in the discussion with the car maker’s perspective, which has “big goals” to reduce CO2 by 40% in a year and a half from now. “There’s always more we can do to help the decarbonisation transition, and part of this is smart charging,” he said. “It’s safe to say that anyone who owns an EV today will not go back to ICE, and there are many ‘why buys’, such as lower running costs and having a more sustainable product. Smart charging can do a lot to help drive penetration of EVs.”
Last month, Volvo launched its own smart charging product in Sweden, a major initiative where the company is aiming to change and improve the value of driving electric for its customers by encouraging good energy tariffs and supporting the grid. Kaluza is supporting Volvo in the initiative with its fully cloud native software and integration. “Smart charging is all about doing it together, both automaker and energy retailer working together to provide a decent offering and a great opportunity for both customer and manufacturer to make money, finding the win-wins which are also better for the planet,” Levy added.
Engineering software company Altair also weighed in on the debate later in the conference, with CTO and Senior Vice President of Automotive, Royston Jones, stating, “Computational intelligence will drive innovation for a more connected, safe and sustainable future. This encompasses the maths and algorithms behind our simulation, data analytics and AI. Innovation is key.”
The company’s three portfolios – design and simulation, data analytics and AI, and high performance computing (HPC) are all playing their part in rapid charge product development, aiming to strike the balance between mass, cost and performance. “Speed is king and we need to balance all of these to achieve it,” Jones said. “If speed is king then where does innovation fit in? Well it’s the magic – innovation is a great enabler for speed. The rise of simulation and prototyping is rapidly increasing towards zero physical prototypes, but to get there we need to increase the amount of simulation we do. Simulation-driven design has seen huge amounts of progress in recent decades, such as Altair’s meshless technology which takes geometrical modelling from Cad and carries out assessments straight away – radically changing the design process.”
He continued: “With V2X, connectivity and electronics complexity is increasing all the time in EVs, from keyless entry and tire pressure monitoring to cabling and antennas. V2X simulation saves costs and man hours, and is the only way to develop products of this complexity. Designing in a virtual environment is the way to go.”
Integrating Artificial Intelligence
AI and analytics was another talking point among executives, and with a potential total annual value of $15 trillion, it's clear why. While a very promising prediction, a recent study from the World Economic Forum (WEF) found that only 16% of AI adopters have successfully achieved their AI-related goals so far. According to Hagsoo Kim, Senior Manager of Global Business Development at Korean AI software firm MakinaRocks, this figure is down to, “low data readiness, inadequate AI literacy, lack of an AI operational system, high initial costs with uncertain Return on Investment (ROI), but most importantly a lack of domain specificity.”
In his presentation, he outlined the challenges for automotive firms in successfully adopting and implementing AI into their manufacturing processes, and how these can be overcome. “Implementing domain specific knowledge is crucial to manufacturing AI solutions,” he said. “Successful transformation will first involve data analysis and model development where domain experts and field engineers can easily and quickly analyse data to develop AI models. Then, all-purpose built AI models can be developed across entire organisations with a cost-efficient AI operational system. The business impact of this is that the interconnected data system will allow managers to make decisions and order tasks more efficiently.”
Looking towards the future of AI, Kim predicts that, “The automation paradigm will be redefined largely by integrating conventional AI with generative AI. All data from operations will be managed and governed by Industrial multi-LLM agents to provide a conversational gateway between humans and machines. This is not just a concept – we are building this as an architecture with a current client. Essentially, a chatbox will create code to control machines, with multiple LLMs overseeing operations.
Sustainability on the agenda
Of course, a conference focused on the mobility transition, EVs and smart charging would be incomplete without also touching on sustainability. Dirk Voeste, Chief Sustainability Officer of Volkswagen Group, and Thomas Rudner, Member of the European Parliament, discussed how to achieve a true net-zero automotive industry through sustainability practices.
Having recently set out its new sustainability agenda, Volkswagen is leading the way in this area, vowing all of its production will be net zero by 2040 and 40% of all materials the company uses will be circular. From a wider European perspective, Rudner outlined the European Union’s (EU) objective to make Europe the first emission neutral continent by 2050, saying: “Companies like Volkswagen and others are key players in this game as they are to ones that invest heavily in technology and research to become more sustainable, for instance in EVs, alternative fuel technologies, and reducing the dependence on fossil fuels. Other corporations invest in charging infrastructure which is crucial. Partnerships between industry, government and NGOs are very important in this pursuit.”
When asked whether European bureaucracy was stifling progress in this endeavour, Rudner answered: “First of all we have some regulation to define precisely what we want to achieve – the alternative fuel regulation structure being the most important. It is now a task for all governments to implement regulation as soon as possible. However, in the upcoming election campaign we have seen some parties promise to take back ICE restrictions past 2035 – promising this would mean we ignore the billions of investment from industry and those who have stuck to the targets.”
From Voeste’s point of view, Volkswagen “strongly believes the future is electric, and we have committed to that, but we do need to balance ICE and EV models in the meantime. Not switching the agenda from one day to the other is really important. Implementing sustainability boils down to four things – people, processes, partners and products. On products, there are strong new product lines of EVs coming – stay tuned. But partners are key as you can’t make it alone. We need driving infrastructure, connectivity, circular economy – sustainability is asking for partnership and the automobile industry is calling out for this, but there is room for improvement. We need reliability, targets, goals, quotas and frameworks.”
Rudner added: “Last year we set new standards for battery recycling and implemented a comprehensive set of rules for product lifecycle to ensure batteries imported and manufactured in the EU are safe for their entire life cycle. But we still need to collaborate on all the questions that arise when we switch from ICE to electric, and we need to collaborate with industry and NGOs to find the right path.”
The conversation turned to hydrogen, and whether the technology is something to look at for achieving sustainability. “Hydrogen is very important but more for industries like steel which have a high need of energy and need to supplement gas in order to decarbonise. There are still high prices to produce hydrogen which is a big problem, and means it is not the number one energy to move cars or such an attractive alternative to EVs. You have to be open to all technology, but hydrogen should be reserved for heavy industry, potentially planes, ships and big trucks, but electromobility should remain number one for mid-mobility solutions.”
Looking ahead
Automotive Europe 2024 addressed some of the biggest disruptions across automotive technology and electrification at present. Innovations in smart charging, AI and software-defined vehicles show great promise, and while there is still a long way to go before the automotive sector can call itself sustainable, there is decent progress towards this aim. Now, attendees can take their learnings from the conference back to their own companies and networks to continue innovating new technologies, products and services to continue to accelerate progress in the automotive industry.
