Innovations and reliable framework conditions are key for a competitive industry

The automotive industry is amid the most significant transformation in its history. However, the shift in technologies and towards sustainability extends beyond our sector into various areas of society. How we will organize mobility, heat our homes, or ensure industrial competitiveness in the future are currently subject to controversy. Controversy can divide, but controversy can also be constructive. For ZF 集团 as a company and for us as a society, it is essential that the depth and speed of change do not tear us apart but that we make it an industrial and social success. We need to openly name the challenges and, at the same time, seek the opportunities that change brings. This also applies to our company, which has transformed itself over the past 100 years from a gear specialist from Lake Constance in Germany to a global technology company active in key future fields of sustainability, from electromobility to wind power.

Making climate-neutral mobility a reality is an enormous task that industry, decision-makers, and society must solve together. ZF has integrated clearly defined sustainability goals into its corporate strategy and has taken measures to implement these targets. In short, we are #ActingNow. We are working on more sustainable solutions and getting them onto the market, onto the road - and thus to the customer.

E-mobility and other alternative drive systems are indispensable when it comes to achieving CO2-neutral mobility. The speed of the Chinese market (by the end of the year, the "new energy vehicle" registration rate is expected to be close to 40 percent) and the speed of European regulation (keyword: ban on internal combustion engines in 2035) are setting the pace. Both will not remain without consequences for European value chains. But higher walls or de-coupling will not make us Europeans (more) competitive. As an automotive supplier, we need to serve the innovation hotspot China with new solutions on the one hand and, on the other hand, make e-mobility more attractive and efficient through consistent further development in Europe and other world regions.

New electric motor without magnets

ZF's new magnet-free electric motor celebrated its world premiere at the IAA MOBILITY in Munich this year. For technology enthusiasts: This solution is a novel variant of separately excited synchronous motors whose magnetic field is generated inductively within the rotor. For non-technicians: This solution is ultra-compact and reduces weight while maintaining high power density. By eliminating magnets, this motor no longer requires rare earths. Customers who use this technology will become more independent. This is because the precious raw materials only occur in some parts of the world, are difficult to extract, and are subject to substantial price fluctuations. In addition, up to 50 percent less CO2 is generated during production compared to the production of commercially available electric motors, as the energy-intensive production of magnets is no longer necessary. This magnet-free motor exemplifies how ZF innovations drive resilience and decarbonization. Such developments must be the blueprint for the future of Germany and Europe as a business location.

Strategic reorientation

One further example of a reorientation that strengthens both e-mobility and supply chains is our partnership with the U.S. company Wolfspeed in the production of silicon carbide chips. In the future, these semiconductors will be needed in all applications where electricity is transformed. This includes e-mobility, but the chips also optimize performance in wind turbines. In e-mobility, they are a central component for power electronics, which determine efficiency to a large extent. Silicon carbide-based inverters help electric vehicles achieve greater range and shorter charging times - two decisive factors for the acceptance of e-mobility.

In the future, 200-millimeter wafers will be produced at the factory in Ensdorf, Germany. They will be used to manufacture chips for highly efficient power modules, which will be developed at the ZF and Wolfspeed Innovation Center in the Nuremberg metropolitan region. A major advantage is the close interlinking of the development center and the factory: advances in modules will lead to advances in chip design - and vice versa. As a result, ZF will be able to bring innovations into series production for customers much faster in the future. We are grateful for the political support in realizing this project, which contributes significantly to the challenging transformation of locations.

Jointly for a CO2-free future

Especially in times of change, partnerships and a robust ecosystem are crucial. That's why ZF joined more than 60 leading global companies as a founding member of the First Movers Coalition in 2021. The First Movers Coalition is a partnership between the World Economic Forum and the U.S. Special Presidential Envoy for Climate. The members of this coalition commit to purchasing as many zero-emission goods and services as possible by 2030 to increase demand for low-carbon technologies. Upon joining, ZF announced a change in steel purchasing. With a steel order placed with Stegra last year, ZF delivers on its promise to the First Movers Coalition from 2025 onward. If not 60 but 600 companies were to follow this path, the transformation of value creation would progress much faster.

But ZF is focusing on more than just mobility when it comes to a climate-friendly future. ZF is also a global supplier of wind power. Since 1979, #ZFWindPower has supplied more than 80,000 gearboxes for wind turbines that power installations with a production capacity of 180 gigawatts. This is comparable to providing electricity to more than 150 million households. It also means that almost every fourth transmission-driven wind turbine has a ZF gearbox. We are a leader in the high-performance segments in the onshore and offshore wind segment and a market leader in compact, modular transmission platforms. ZF Wind Power has supplied an offshore powertrain for the prototype of a 15-megawatt wind turbine. In the future, these turbines will produce electricity in Europe, Asia, and the U.S. and will be equipped with a ZF powertrain manufactured in Lommel, Belgium.

Our goals include making ZF climate-neutral by 2040. By the end of this decade, we aim to reduce our Scope 1 and Scope 2 emissions by 80 percent compared to 2019. For Scope 3 emissions, i.e., those arising from the use of our products by customers and from the supply chain, we aim for a 40 percent reduction. However, it is also clear that climate protection is a joint task of business, politics, and society. The keys to achieving this are innovation and a reliable framework for the #EuropeanIndustry.

The European Commission's Green Deal sets the direction. There is no lack of ambition. However, there is a lack of awareness of the industry’s important role in making this transformation a success. It is not a law of nature that Germany and Europe remain strong industrial locations in times of change. Even in the EU recovery plan presented three years ago, the word "green" appears 20 times while "industry" is mentioned only twice. This is a disparity if we want to persist as a competitive industrial location. I very much welcome that the German Economics Minister Robert Habeck has declared 2023 to be the "Year of Industry.” Now, words need to be followed by actions.

We need a new awakening: Concepts such as competition and industry must regain a positive connotation - this is a task for society. Instead of weakening the market, we need to mobilize market forces for sustainability. Instead of limits and bans, industry needs framework conditions that promote the search for innovative solutions and support their acceptance. In the e-mobility field, examples are the expansion of charging infrastructure, tailor-made education at schools and universities, or the availability of raw materials. Expanding and developing the grid, fair auction rules, and the rapid allocation of land would benefit wind power. In addition, there is a need to reduce bureaucracy, create competitive energy prices, and accelerate decision-making by administrations.

If we see change as an opportunity and combine political ambition with a supportive framework and realism for the challenges of transformation, we can make this transformation a success - for industry and society.