Rheinmetall Automotive CEO: Electrification to account for more than half of sales in 2020

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Horst Binnig, CEO Rheinmetall Automotive

Horst Binnig envisages more intense cooperation by all concerned

- New propulsion systems pose a huge challenge for industry
- Hybridization and Electromobility will redefine the classical relationship between manufacturers and their suppliers
- There are uncertainties, but far more rewards than risks

Over the next five years, the automobile industry will be undergoing greater changes than over the past 100, and these changes will be worldwide. Megatrends such as growing urbanization with new business models of urban mobility, the spread of interconnectivity and the greater and greater use of electromobility – these are transforming our world. Comments Rheinmetall Automotive CEO Horst Binnig on the occasion of the North American International Auto Show (NAIAS) starting on January 9th in Detroit: "The auto industry is facing the greatest upheaval in its history. It must rise to the challenges if it is to continue to play a key role in the mobility of individuals. And this is only possible through a concerted effort by all concerned."

The subject of drive system electrification alone covers such a variety of factors that it is impossible for a single auto manufacturer, or an auto industry supplier for that matter, to handle it with their own resources and without any external assistance, especially since the mainstream of future drive system technologies is not yet clearly identifiable. Simply looking at the establishment of a close-knit recharging infrastructure, it becomes clear that it takes the joint action of all those involved in electromobility to install an effective and well-functioning network of charging points within the foreseeable future. So it's hardly surprising that BMW, Daimler, Ford and Volkswagen have recently reached initial agreements to this end and, in 2017, will start to set up an ultra-fast, high-power charging network along major highways in Europe. This is comparable to the 48 charging corridors, which the administration is building along 25,000 miles of highways in 35 US states through the U.S. Department of Transportation (DOT) along with a large number of U.S. states, auto manufacturers, and utility companies. The plan is for charging stations to be located every 50 or so miles along these routes.

Although there is still great uncertainty as to what degree electric drive systems will be gaining ground in the PHEVs or BEVs of the future, one thing is clear: hybridization and electromobility will redefine the classical relationship between manufacturers and their suppliers – if only for technical reasons. Added to this are the shorter and shorter development cycles, especially where new technologies are concerned. They call for well-functioning technical interlinkage at all levels between the various parties. What's more, hybrid and battery-powered vehicles entail in themselves a large number of new vehicle components and thus, inevitably, a redefinition of the supply chain.

As a drive system specialist with a history going back over more than 100 years, Rheinmetall Automotive has recognized these "signs of the times", and identifies far more rewards than risks in the potential expansions to its portfolio. Horst Binnig comments: "If I take a look at the products we currently supply for the purpose of optimizing the drive train on an I.C. engine and compare these with what we currently have in our development pipeline for future types of drive systems, I arrive at a substantial growth in value. In terms of figures, this could be almost double our share of sales per unit. As early as 2020, electrification will account for over one-half of our sales."

Cases in point: Rheinmetall Automotive is right now working on castings for the battery holders of electric vehicles and on highly complex, cooled aluminum housings for the electric drive units themselves. Added to these are the electrically powered auxiliary units, extremely lightweight structural parts, heat-pump components and range extenders. With the emergence of products previously non-existent but now required, this makes it necessary for customers and suppliers to reinvent themselves. This applies to the same extent to combined efforts in the direction of sustainable management and environmental protection.

In the context of autonomous driving technologies, developments are again confronting us with new challenges. These include cyber security or 360° virtual reality where our group can draw on the comprehensive expertise inherent in its Defence sector and accelerate the development of appropriate components.

In Binnig's view there is therefore no reason to regard electromobility with suspicion or even hostility. "It will help our industry move forward if we are able to master the challenges ahead. Completely new opportunities will open up of which we have no notion now, for, together, we hold a strong position in the international auto industry with its heavy spending on R&D."

Source: Rheinmetall Automotive

Company Info

Rheinmetall Automotive AG

Karl-Schmidt-Straße 2-8
74172 Neckarsulm

Telephone: +49 7132 33-0