CTIO of automotive supplier Marelli: "Things once unthinkable are possible - based on developments in electrical and information technology"

VDE: How do you estimate the drive portfolio for 2030? What will we see on the market? Do you expect battery electric vehicles to dominate? Where will fuel cell vehicles stand and how will this be distributed among the sectors, first and foremost commercial vehicles and passenger cars?

Fetzer: That depends on the region that is being considered. At the moment, Europe is the region with the greatest speed towards electromobility or batteries as a drive technology. This is followed by China and the USA. Looking at the expectations of German OEMs (original equipment manufacturers) such as Volkswagen, Mercedes-Benz or BMW, I think we will be at 60 to 70 percent pure battery electric vehicles in Europe in 2030. Around 30 percent will probably be plug-in hybrids. So there will be very few pure combustion vehicles left. Fuel cells are unlikely to be an issue for passenger cars. This can be seen from the development activities, publications and announcements alone.

For distribution vehicles, it will probably also come down to battery-electric drives. For distances of up to a maximum of 200 kilometers and specified routes, this seems to be the only alternative for reasons of cost and infrastructure alone. In the case of heavy-duty trucks, there will be a dichotomy: On the one hand, VW with its Scania and MAN brands, which are focusing on electric drives, and on the other, Daimler Truck and Volvo, which want to offer fuel cell vehicles. It will be exciting to see whether and how a reasonable hydrogen charging infrastructure can be established. After all, it all has to pay off financially. And the production costs for the hydrogen have to be added. If you add it all up, the business case is not there. In this respect, I share VW's assessment.

Let's take a look at the U.S.: There, the Big Three from Detroit (GM, Ford and Chrysler), together with the U.S. government, have announced their intention to operate 50 percent of their vehicles electrically by 2030. This seems realistic to me and also achievable. The number of battery factories currently being built in the U.S. points to the 50 percent mark. It will certainly be interesting to see how quickly companies like Tesla, Rivian and Lucid Motors can actually gain market share and pull others along. There is much to suggest that there is also interest in electric trucks in the truck market. Due to various product announcements and currently fully booked orders for electric trucks, this market is subject to a corresponding dynamic. However, there will certainly be regions in the USA that will continue to cling to the combustion engine for a long time.

China is following a similar path to Europe. The Chinese government will continue to push electromobility because it simply sees the strategic advantage of reduced dependence on oil. As the world's largest oil importer, it has been pursuing this goal for some time now. In the meantime, the share of Chinese vehicles in the national market is also considerable and amounts to almost 50 percent. The success of electric vehicles is particularly striking. Further strong growth in the field of electromobility in China can be expected. German automakers, for example, have increased their share in China by 200 percent within one year. 

Japan is also making progress. Nissan has launched an electric car program, closely followed by Toyota. Mazda, Suzuki, Isuzu and Subaru are all riding in Toyota's wake because they want to share the technology. The pace of electrification will also increase here, but at a slower rate than in Europe. This is also related to the adherence of major market players to the fuel cell. All in all, a big effort with a still very small return. The buses they used at the Tokyo Olympics did run, but at a price that is not competitive. Also, the Japanese government has put out a strong grant in the area of solid-state battery research. I expect Japanese automakers to get solid-state batteries competitive as well as marketable by 2028/29. How big the competitive advantage will be then remains to be seen.

VDE: For the critics or skeptics of electromobility, it can then be stated that electromobility in its current form is almost without alternative in view of the technical developments, right?

Fetzer: Electromobility is simply attractive. Anyone who has ever driven an electric car for a longer period of time realizes that the fear of breaking down somewhere is unfounded. Driving comfort is also significantly better. Many years ago, Mr. Diess, currently CEO of the Volkswagen Group, already said: "Once you've driven an electric car, you're lost to combustion models." I think this quote is coming true right now. A key issue is still the charging infrastructure. And this is also the reason for Tesla's success. That's exactly what they offer.

VDE: Let's talk about Marelli's research and development activities. What is currently in the pipeline or where are you currently looking very closely in terms of development?

Fetzer: Marelli develops, manufactures and sells electric motors. In addition, we are working on the integration of electric car transmissions, so-called e-axles, and are also active in the field of battery management systems, which are already being used in various vehicles. We are also involved in the development of other components, such as onboard chargers or DC/DC converters. We are also working on novel drive concepts that will fundamentally change battery management as well as DC/AC and AC/DC conversion. We expect this to result in significant advantages in terms of efficiency and packaging - for example, in cooperation with Transphorm, a company that focuses on the development and production of gallium nitride power components.

VDE: There are very many companies that are active in the fields of electric motors and inverters. You mentioned Bosch as one of the competitors. Tell us, what makes the Marelli approach so special?

Fetzer: Marelli was the first company in the world to start working with hairpins in 2008. High-performance electric motors were needed for the KERS systems, and Marelli supplied them. Marelli brought this hairpin technology into series production for the first time in 2019 - in a sports car. In this respect, we have the ability to bring high-end technologies from Formula 1 and thus new innovative approaches from motorsport to the mass market - see Hairpin - this is what sets Marelli apart and is our particular strength.

VDE: If you are currently a user of electromobility, you always have a bit of a problem with the charging infrastructure. Can I find a charging station that is compatible with my vehicle? Are there any plans from Marelli to address this issue or are they concentrating purely on the vehicle side?

Fetzer: We concentrate purely on the vehicle side. Of course, we support our customers and also committees with ideas, but we are not active operationally at component level or product development. This is a conscious decision because we want to focus on the OE market (original equipment).

VDE: Electromobility is certainly a megatrend, which is also partly due to decarbonization. Another important aspect is the topic of networking: autonomous driving, driver assistance systems, shared mobility, etc.; Is Marelli pursuing approaches here to enter the market or serve this field?

Fetzer: We are working on supporting fully automated driving (level 4) and, in the future, autonomous driving (level 5) with sensor technology and are cooperating here with Chinese manufacturers of radar sensors. Following on from this, we have further collaborations with startups in the field of lidar technology, and are also investing in and developing solutions ready for series production. In the process, we are also looking at the software for sensor evaluation or object classification that we want to produce.

With Automotive Lighting, Marelli is one of the world's leading manufacturers of lighting technology. We integrate the sensor technology in the front area of the vehicles. In the electric car, there is no longer any need for cooling at this point because it is no longer required. For car manufacturers such as Mercedes-Benz, the front area is currently becoming a styling element and is being expanded to include lighting functions such as Light Base, etc., into which we then integrate our sensors again.

VDE: When it comes to autonomous driving, experts argue about whether video sensors or lidar technology will prevail. Which side is Marelli on?

Fetzer: There are indeed many opinions. And Elon Musk (Tesla) probably has the most extreme view of all: According to him, eight video cameras are enough for fully automated driving. Companies like Waymo and Cruise, on the other hand, say that autonomous driving needs various sensors, including lidar (light detection and ranging), radar and ultrasonic sensors, as well as video cameras. Tesla models in the U.S. are reportedly being prepared for fully automated driving. However, radar sensors are not to be used for this. Mr. Musk must therefore already have evidence that what he is claiming can actually work. Otherwise, he would not act in this way.

When considering this, the use cases should always be kept in mind. Let's take Level 5, for example: driving without a steering wheel and without pedals. In other words, the vehicle drives autonomously. At the moment, I cannot conclusively judge which sensors are needed for this. To me, camera technology seems to be a major challenge: What do I do in fog, for example? Do I have to park the car? Several radar or lidar systems would certainly be helpful here.

Much also depends on the capabilities of the detection or processing software. What can be implemented in terms of AI (artificial intelligence) & machine learning in this context? And how much support is needed via edge computing - i.e. 5G/6G from the cloud. Waymo and Cruise have a clear strategy here: they don't need edge connectivity. But they do have an enormous amount of sensors and corresponding processing technology to be able to drive autonomously. The first demonstration projects in San Francisco prove that this can work. However, this is certainly not a vehicle for series production because it is not (yet) suitable for everyday use. And finally, in the next few years, the question will certainly arise as to how much user experience will be needed for the individual in automated driving?

Equipping a sports car with a fully automated driving system makes no sense. However, providing support for everyday driving by warning of dangerous situations, automatically braking the electric car, or intervening in the steering is much more likely to make sense. All of this increases safety on the road. It will be exciting to see in which applications fully automated, and autonomous driving will become established.

VDE: What are Marelli's visions and plans for the coming years?

Fetzer: Marelli focuses on two key areas: Performance and Personality. Performance revolves in particular around powertrains - both electric and combustion engine. This includes injection and exhaust systems, as well as vehicle suspension and damping systems.

We see Personality as a major growth area. This includes interiors such as dashboard consoles, electronic systems, display elements and instruments - generally speaking, new operating concepts for the vehicle. And of course smart surfaces. In other words, beautifully designed surfaces that transform into electronic controls when touched. And finally, of course, the exterior, i.e. lighting technology and lighting elements.

We want to be involved in and support all these components, which have a strong influence on the personality of a vehicle. We see a major growth market here. In the future, the difference between good and bad engines will lie solely in their range. This means that differentiation via the powertrain will be largely eliminated. Ergo, the OEM must differentiate and position itself elsewhere. Current vehicles with new cockpit areas and infotainment system installed in them set new impulses. In the past, the cockpit was also important because it was the first point of contact between the driver and the car. In the future, however, it will become much more important because the whole subject of interiors will have to be rethought. Automation functions, design options, the use of new technologies such as augmentend or virtual reality appear conceivable. Already, automakers are differentiating themselves through lighting and electronics such as OLED at the rear of the vehicle. This plays a major role, especially in vehicle as well as brand perception.

VDE: We have noticed that a lot of things are becoming homogenized, and powertrains no longer make the difference. Against this background, how do you see the German OEMs positioned vis-à-vis the international competition?

Fetzer: Objectively speaking, the European automotive industry was very cautious about electromobility for a long time. A radical rethink has now taken place here. I would like to mention Volkswagen, Mercedes-Benz, BMW and Stellantis here, which have made major investments. One example is ACC (Automotive Cells Company), a joint venture between Total, Mercedes and Stellantis.

Electromobility is certainly not becoming a dead end for the European auto industry. At the same time, however, Tesla has established itself as a serious competitor. They are well positioned technically and in terms of manufacturing technology. And others will follow. There will be a shift, but not so much starting from Europe. There are some strong startups in the U.S. and China. Xpeng and Nio come to mind first as innovation drivers. They're also going to give some of their Chinese competitors a run for their money. There are voices in China that say 50 percent of Chinese OEMs will no longer exist in ten years. All in all, it's a good competition and the European automotive industry is very well positioned.

VDE: Marelli has Italian and Japanese roots, and there's a bit of U.S. in there, too. As CTO, how do you deal with this mix of cultures?

Fetzer: That's an exciting question, because we operate in many different national cultures and have an international presence with currently 54,000 employees. The company is headquartered in Japan, but of course we are also very Italian. We also have strong roots in Germany, France and North America.  We see this diversity as an advantage and are developing our corporate culture accordingly. We invest in appropriate programs -- which our employees work towards together across countries. This process has been accelerated by the pandemic in some areas, but unfortunately also slowed down somewhat in others. Video telephony enables cross-functional exchange, moving away from silo thinking and toward a shared environment. That's a process, and of course it takes time. We have a common language and that is English. Of course, our British and American colleagues have an advantage here, but these are the challenges that come with being an international company. All in all, Marelli is moving toward a corporate culture - a Marelli culture - without exaggerating or even eliminating country-specific cultures.

VDE: Marelli has the goal of being climate neutral by 2030. What activities are you undertaking to achieve this?

Fetzer: As a first step, we have launched a project at our plants to quickly reduce energy consumption using existing options. We are making sure that we purchase electricity from renewable sources and are reducing our energy consumption globally. These are some of our initiatives to become CO2 neutral in terms of Scope 1 and 2 emissions by 2030. We are also working with our OEM customers to optimize supply chains, strengthen sustainability and thus reduce our carbon footprint. To ensure that the topic is driven organizationally, we have a company officer who deals exclusively with the topic of sustainability - at product level and for our entire company. We work closely with this person when developing innovations so that the issue of sustainability is already taken into account when selecting materials from our suppliers.

VDE: Is there another significant project that we should know about?

Fetzer: Yes, we started a project with BMW at the end of 2020 and jointly developed a concept for controlling the supplier chain via the blockchain. We are also making the solution available to BMW so that it is clear which materials are used by suppliers and how large the resulting CO2 footprint is. In this way, it is possible to prove what contribution we can make to the BWM program of building CO2-neutral vehicles by 2030. We have developed this blockchain technology in-house and are currently discussing with our OEM customers where a further rollout would make sense.

VDE: Let's get back to you personally. You've had an exciting career path: starting at Bosch, then moving to Vector and back to Bosch again. And you've always held positions in top management. What is your recipe for success?

Fetzer: I was always lucky enough to be in the right place at the right time to be able to move things forward. It also helped me that I always had to find my way in completely new worlds: at Bosch it was the electric powertrain, at Vector it was software. These ever new challenges in an ever new cultural environment have certainly helped me.

VDE: You studied electrical engineering and electronics, which of course makes us as VDE very happy. What advice would you give to current electrical engineering students?

Fetzer: Electrical engineering is on the verge of a major boom. This is not a purely German view either. Electrification will have its breakthrough as part of the energy transition. In the beginning, the energy turnaround was ecologically driven. In the meantime, we know that electrical energy is more than competitive as a primary energy. And we will most certainly see an enormous increase in electrical energy - be it photovoltaics or wind energy. But we will also see geothermal energy. All these technologies will be rolled out worldwide, but we will also need a huge amount of knowledge to be able to transform the energy into high voltages. We need to be able to store electrical energy - either directly as electrical energy in the form of a battery or in chemical form, for example as hydrogen in a battery. We need to digitize our grids to provide enough power anytime, anywhere. I think that in 50 years, electrical energy will be the only essential form of energy.