Phoenix Contact E-Mobility: Development of electromobility and the all-electric society

VDE: Mr. Heinemann, thank you very much for the invitation to Blomberg, the visit to the All-Electric Society Park—which is very impressive—and the joint interview. The first question concerns your mobility behavior: Do you also drive an electric vehicle privately?

Michael Heinemann: Thank you for the exciting day! Yes, of course I drive an electric vehicle, a purely electric one. And I believe that I am also obliged to do so for professional reasons, and have been for more than seven years. And it's not just me who is convinced of this; my entire family now drives purely electric vehicles. However, the decisive factors here are less work-related and more economic and ecological.

VDE: The VDE is active in many different industries, but for our interview today, the areas of electromobility, energy generation, and energy distribution are particularly relevant. In 2021, we published the study “Drive Portfolio of the Future,” in which we analyzed battery-electric, fuel cell, and e-fuel drive types for passenger cars, commercial vehicles (trucks and buses), and other vehicles (classic cars, sports cars) in terms of relevant use cases. One question remains highly relevant politically and socially: What is your assessment of the type of drive system used in private passenger cars – an often very emotional debate?

A fully electrified passenger car fleet is possible

Michael Heinemann: When it comes to passenger cars, I believe in 100% electrification of the vehicle fleet. Why? Battery-electric drive makes the most sense here – especially from an environmental perspective! We did not develop electric driving because we needed a new or alternative drive technology, but to reduce emissions and achieve climate protection goals. And in this respect, purely electric drive is far superior to other types of drive. If you compare the overall efficiency with a hydrogen drive, for example, we are about three to four times better.

VDE: The debate in this country is very emotional, but it is mostly limited to passenger cars. What do you think about the transport sector, i.e., commercial vehicles (CVs) and trucks? There are also very ambitious CO2 fleet targets in this area. Looking back to 2021, the race between battery-electric and fuel cell trucks was still wide open. The opinion leaders who participated in the debate favored fuel cells for longer distances or cross-border transport and battery-electric drives for shorter, i.e., regional, distances. What is your assessment of this based on current trends and developments?

Michael Heinemann: This decision is made solely by the customer. In this case, it is logistics companies with large fleets. Here, economic efficiency in the form of total cost of ownership (TCO) is the relevant key figure. In terms of TCO, the operating costs of a truck exceed the acquisition costs many times over. The operating costs for an electric truck are significantly lower than for a diesel truck – especially if companies use their own solar power or can use their corporate electricity tariff for charging on the road, which is currently under discussion.  Based on numerous projects in the commercial vehicle sector, we are receiving feedback from our customers that there is currently very high demand for fully electric trucks – even for longer distances. Why is this? Mainly due to the rapid development of battery technology, which has advanced significantly over the last three to four years. In addition to cost savings and performance improvements, this also includes the charging performance required to recharge these large batteries. Here, too, there has been dynamic development, which is why the trend is clearly moving toward battery-electric long-haul trucks.

VDE: Trucks require large batteries because the vehicles are heavy and have to cover (very) long distances. These are not “ideal” conditions for battery technology. What products does Phoenix Contact E-Mobility offer to make this possible nonetheless?

Michael Heinemann: Our product portfolio includes charging infrastructure solutions, such as charging cables, connectors, and controllers, as well as vehicle-side charging inlets, battery packs, power distribution boxes, and in-vehicle charging controllers. Our products enable batteries to be charged as quickly as possible, for example. Our new HPC charging plug can transfer up to 1 MW of charging power in the CCS (Combined Charging System) charging standard! We are also working on the MCS plug, a plug face specially designed for commercial vehicles and trucks that can transfer 1.5 to 3 megawatts. However, we are also noticing that the trend for trucks is also moving towards CCS or CCS 2.

Duality of CCS & MCS charging standards for trucks depending on the customer and application

Ultimately, both charging standards will be needed depending on the application, and the customer will decide. One argument in favor of CCS is the fact that there are already almost 200,000 public charging points with CCS in Europe. Transport companies are therefore relying on existing infrastructure. In contrast, the Megawatt Charging System (MCS) or megawatt charging offers even more charging power. This will be needed, for example, in maritime applications, where more power is required.

VDE: 1,000 kW of power, or “megawatt charging,” i.e., a lot of power in a short time, sounds fantastic at first, as it suggests only a short downtime despite large batteries on board. For the VDE as a technology organization, high charging capacities also raise questions regarding networking and exchange with grid operators and energy suppliers. Such large amounts of energy also have a major impact on distribution grids and distribution grid operators, especially since the media regularly reports on short-term, temporary overloads. In the future, even greater charging capacities will be added. How are you addressing this issue, and are you engaged in cross-industry exchange with energy suppliers, for example?

Michael Heinemann: You are absolutely right: it can only be done together, and at Phoenix Contact we also see the transport and energy transition as a collective endeavor, especially when it comes to rolling out a high-performance charging infrastructure for electric trucks in Germany and Europe. Energy suppliers play a crucial role here. Close cooperation is a basic prerequisite.

The next logical step would then be bidirectional charging. As a large charging park operator, it would then theoretically be possible to use the power from other connected vehicles to absorb the peak loads when charging an electric truck. Large parking lots where vehicles are parked for longer periods of time, e.g., at airports, train stations, and ferries, are particularly suitable for this purpose.

At the beginning, you also mentioned our “All Electric Society Park” (AES) here at our company headquarters in Blomberg, where the topic of electromobility also plays a central role. The AES Park has an e-mobility charging park and two large energy storage facilities with a total of 1.5 megawatt hours of stored electrical energy, which enables us, as charging park operators, to operate a 720 kW charging point independently of the grid.

VDE: That sounds exciting! You have been with the company for over 30 years and started your career in the energy sector in the field of power supply. Why did you personally switch sides, moving away from energy supply to electric mobility?

Michael Heinemann: That's a very good question (ponders). At the beginning of my career, I was active in the field of industrial power supply and co-founded a company specifically for this purpose at Phoenix Contact, Power Supply GmbH, based in Paderborn. The company was founded a little earlier than Phoenix Contact E-Mobility GmbH, which was founded in 2013. I still remember very well the moment when this news was announced and I was sitting in the audience, listening, and even then I said to myself that I could imagine working in this field in the future, as it sounded exciting and was poised for dynamic development. In addition, e-mobility solves one of the key issues of our time: How can the transport sector be decarbonized and thus reduce environmental pollution? 

And then, almost seven years later, I was asked if I could imagine leading Phoenix Contact E-Mobility GmbH. At first, I reacted cautiously, as it was a new field with a different strategic orientation. But it was also clear to me that this was a unique opportunity!

To this day, I have never regretted this decision, even though there have been and will continue to be positive and less positive years in the field of electromobility in terms of market development. I also believe that not everything has always gone smoothly in the early stages of the development of electromobility. At the same time, however, electromobility also offers enormous potential, particularly with regard to the electrification of our world with the goal of an all-electric society.

VDE: Indeed, last year in particular saw a great deal of restraint in the market, which can be attributed on the one hand to the overall economic development, but also to the changing and unpredictable conditions in Germany. Since you sell your products worldwide and are represented internationally, how do you assess the market for electromobility in general, and how do you view the various markets in Europe, the US, and China, which are very heterogeneous in themselves?

The increasing relevance of local production in times of geopolitical change

Michael Heinemann: With Phoenix Contact, we are active in all the markets you mentioned. Due to the fact that we were one of the first companies on the market in Germany, China, and the USA and also manufacture locally, we have developed a very good feel and understanding for the different regions and are able to assess current market trends very well and incorporate them into our development. As a German company, it is always important for us to be able to adapt to both the German domestic market and its companies, as well as to international customers with their respective (inter)national characteristics, and to be able to react immediately on site. For us at Phoenix Contact E-Mobility, it is a special privilege that we are not only active worldwide, but also at various levels of the value chain (looks determined).

This special position in the market is particularly important to us, especially in times of changing geopolitical conditions with a potentially new geopolitical order. In view of these changes, it is no longer enough to simply export from our location in Germany to the rest of the world. Local presence will become much more important in the future. In other words: national or even local presence in relevant markets. That is why we decided early on to establish local locations close to our customers in Europe, the US, and China. In China in particular, which was an early driver of this development, we have been active with our own company since 2015 and serve the local market.

VDE: Thank you very much for these fascinating insights! This raises the question for me of whether it is better to have a broad base or whether specialization is necessary after all. Take us into the engine room for a moment: What will be your strategic focus in the coming years?

Michael Heinemann: In addition to the great advantage of already being represented in all relevant regions with local locations, we will focus even more strategically on gaining a foothold in the core e-mobility market of China in the future. We have just recently built a new plant in Lishui with 26,000 square meters of production space. The capacity is very large, and we will work with our customers to do everything we can to steadily increase this capacity in order to serve passenger car and commercial vehicle manufacturers as well as customers of the charging infrastructure. We will also strengthen the commercial vehicle sector internationally.

Cooperation with the VDE Testing and Certification Institute in the field of measurement technology

VDE: The VDE and Phoenix Contact have also been working closely together for many years. For example, you are active in the German Commission for Electrical, Electronic & Information Technologies (DKE) in the areas of standardization, and your colleagues are involved in numerous working groups and standardization committees.  You are also involved in the VDE Energy Technology Society (VDE ETG) as part of the “Electromobility in the Energy System” task force and have links to the VDE Testing and Certification Institute (VDE TIC). What are the advantages of involvement in the VDE and why should other companies also become actively involved in the VDE?

Michael Heinemann: Our collaboration with the VDE is based on a long-standing foundation of trust, which we will continue to rely on in the future. Take the topic of electromobility, for example, which is heavily regulated in Germany by various European and national laws, regulations, norms, and standards. To keep track of all this, a partner like the VDE is particularly important so that we can always keep our finger on the pulse. And if I may mention one topic in particular, it would be measurement and calibration law (MessEG). This very specific requirement in Germany is new to many international providers and often poses a major challenge. We worked with the VDE Testing and Certification Institute very early on to meet the requirements and specifications.

The VDE mark stands for the highest safety and quality standards

This means we can now offer our customers a complete system of products that they can use to set up a charging station or wallbox that complies with measurement and calibration regulations.  We are very happy about the successful cooperation and our tested and certified products, which meet all relevant requirements and also bear the VDE mark, which stands for the highest safety and quality standards.

I think that sums up the win-win situation of the partnership between VDE and Phoenix Contact E-Mobility GmbH very well.

VDE: The requirements in the area of measurement and calibration law are classic consumer protection issues. As VDE, we receive numerous inquiries on this topic, and the tests and certifications for this are very comprehensive. After all, the customer ultimately only wants to pay for what they actually charge.

Allow us to conclude with one last question: What advice would you give to young professionals, or in other words, how can young people rise to become a CEO?

Michael Heinemann: (laughs) That's a good question, and there are certainly different ways to achieve this goal. One tip I would like to give young engineers and technicians is this: Stay curious, always question the things that interest you, and delve as deeply as possible into topics. A strong interest in a topic is the most important motivation; everything else will follow naturally.