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Driving the Future is a podcast about where the automotive industry is going, and how not only to keep up with the rapidly changing business, but to shape it.
Fueled by such factors as the climate crisis and the digital revolution, the automotive industry is changing. Whether we’re talking about autonomous cars and electric vehicles or the new customer experiences that digital technologies enable, whether it’s transforming from being an auto manufacturer into an organization that provides mobility services, the map of the industry is being re-drawn. Are you going to follow the path that others lay out, or grab the wheel and shape the future of mobility yourself? The promise of technology is big, but how do you get there?
Driving the Future is a podcast by Capgemini.
Driving the Future, S2 Ep.6
Sustainability
Speakers: Narrator, Emmanuelle Bischoffe, & Laurence Montanari
[Music Playing]
Narrator: Welcome to Driving the future, a podcast by Capgemini, where we discuss the automotive industry, where it's heading, and how automakers cannot only keep up with the rapidly changing business but to shape it.
In this episode, we are joined by both Emmanuelle Bischoffe and Laurence Montanari, to discuss sustainability within the automotive industry. Together, they'll discuss the advances made over the past five years and common patterns in sustainability practices today.
They uncover some exciting use cases for end-of-life materials and look at the role talent plays for the future.
Emmanuelle: Automotive is really leaving a big revolution in innovation with these new processes, et cetera. And this is also a revolution for people, for talents.
Narrator: That is Emmanuelle Bischoffe, the Vice President, and Sustainability Lead in the Global Automotive Industry for Capgemini.
Laurence: EVs are not new. Not new at all. There were a lot of EVs in the last century, but year after year, the DIESEL and gasoline took the lead and the importance.
Narrator: That is Laurence Montanari, the Vice President for Transportation and Mobility at Dassault Systemes. When talking about sustainability, both Emmanuelle and Laurence feel it's important to define what sustainability means.
Emmanuelle: So, there's one definition I particularly like. Laurence is this one, meeting the needs of the present without compromising the ability of future generations to meet their own needs. Very important definition that refers to the legacy we live on to our children.
Laurence: Emmanuelle, I really like this definition because sustainability is more than CO2 emissions and at Dassault Systemes we call that the generative economy. So, how to provide to the new generation more resources than we have currently. That's perfect.
Emmanuelle: In Capgemini, we say we help our clients to get the future they want.
Laurence: So, in the automotive industry, what is the future? Sustainability is linked with electrification. That is the biggest transformation of the industry. And what is wonderful is that this transformation is worldwide.
Emmanuelle: If you focus on sustainability in the automotive industry, we speak a lot about decarbonization because automotive represent 10% of global emission that figures from 2023, so 10% of global emission of CO2, that's huge.
As far back as 2010, OEMs were already working on a technical solution to reduce fuel consumption, and fuel consumption is linked to CO2 emission. So, it is not new. What is new is really the strong regulation introduced in 2021 with the ban of ice for 2035.
This is really new. And what is also new is all the focus we have on the value chain of the automotive sector from the design to the distribution and sell. You just want to react Laurence?
Laurence: Yes. I want to react because do you know the first electric car with a speed over 100 kilometres per hour, do you know the name of this car? No. It's called the La Jamais Contente and it was in the last century many years ago.
So, that means that you're right, EVs are not new. Not new at all. There were a lot of EVs in the last century, but year after year, the DIESEL and gasoline took the lead and the importance.
So, that means that the transition to electrification of vehicles is correlated with the charging infrastructure and it's very important.
Emmanuelle: We need battery, and the carbon footprint of the battery is not so good. So, on one side, on the usage, we have significantly improved the CO2 emission, but we have big challenges on the value chain with the battery, in particular to decarbonize all this value chain.
And that's to say that we have to take into account eco-design, manufacturing, distribution, transport, sales, and also circular economy.
Narrator: One interesting consideration for sustainability when trying to design a car is actually its weight. Laurence explains.
Laurence: Sustainability of a vehicle is directly linked with the weight of the vehicle because the weight of materials is how to produce it, you need energy. And I don't understand why the users today like SUVs.
Because we know in the industry that the weight of an SUV is more than 100 kilograms if I compare it with a non-SUV car. So, if one of us is concerned about sustainability, I don't understand why people like SUVs right now.
Emmanuelle: And you raise a really interesting topic, Laurence, is the light rating of electric vehicles and that's also a topic we will work on I think in the future.
It's a negative loop in fact because with the battery, you increase the weight, you increase the price of the vehicle, so you try to put value for the customer. So, you have to enrich the car, so the car is heavier and heavier.
Laurence: The weight of the vehicle, it's particularly important. The density of batteries, I think it was divided by two if I compare the first generation of battery and where we are today and we know that it'll continue to increase. So, more than density of energy for the same weight.
That means that we can compare the battery of yesterday. So, the first generation of batteries, more than 400 kilos in a car with what we will have in the next generation of batteries, which are less 200 kilograms.
That is very important to lightweight the car. But not only that, all the parts of the car have to be worked in that way.
Narrator: As adoption of electric vehicles is limited by the amount of infrastructure in place, it's important to track the improvements already made and lay out a timeline for future infrastructure improvements.
Laurence: We can see an evolution in the infrastructure. So, the number of charging stations is increasing. Every country is different, but we can see the improvement. Because we are in the transition phase, there are hybrid vehicles and hybrid helps the transition.
Hybrid vehicles help the transition for customers because the consumers need to change their habits. Every one of us, when we start with an EV, the first drive on the road, there is a stress on the range because it's completely different.
So, consumers need to transition also and hybrids help this transition also for the charging stations. It helps also for the technology, for the battery supply because we know that today there is not enough gigafactory to provide 100% of EV vehicles.
If we see the number of gigafactory with the production, the demand on EVs, there is not enough battery for all the cars. Hybrid is the right way to transition. And that is the challenge and the change we are living today in Europe, but not only in Europe, it's in other countries also.
The timeline, it's more than 25 years, it takes a long time to transition in infrastructure. In vehicles that are less than 10 years old. When we see EVs, they are made here now it took 10 years to measure this technology. So, it's short-term.
So, the difficulty and that is a big challenge, is to align the timelines between infrastructure, territories, consumer behaviours, technology of vehicles to be sure that we can transition fast because we need that for the planet.
Emmanuelle: What do you think Laurence, how can we improve this timeline from infrastructure? Because that's a key point so you're right.
Laurence: That is a good question because improving this timeline is the way to transition faster. We are convinced that we need to use the technology we use in the automotive sector in the territories.
So, how to model and simulate the flow of people, the flow of mobility, the mobility needs to be sure that we're able to transition faster. And we know that the future is not only one car per person, it doesn't fit anymore, the multimodality is a solution.
But today multimodality is not efficient enough. So, it's a mix of public transport, car sharing, riding by foot, pedestrian, small mobility such as scooters, but it has to be organised in the territory in a night way.
So, modelling and simulation, a complex solution of mobility is a way to transition faster.
Emmanuelle: That's true that over the past five years, the automotive landscape has been completely unstable with lots of uncertainty. Automotive industry is used to navigating storms and adapting to change, but in the last five years it has really accelerated. Let’s speak about why.
First, that was the cheap shortages, then the supply chain disruption due to COVID, then we had the war in Ukraine. So, lots of supply chain disruption and what we can say now is that in the automotive industry we take uncertainty as a parameter now.
We work on how to have a supply chain that is resilient, how to react faster, et cetera. The regulation plays a very important role. I would say that the regulation is now the driving strategy of the car maker.
Laurence: The system has a purpose, and the purpose is to provide businesses with 3D experience universes to imagine sustainable innovations. Our objective at the system is to be carbon neutral by 2040. It's not only carbon neutral, it's also a question of diversity.
And there is a willingness to promote, for example, women as managers. Today, there are 22.6% of women, people managers and the objective is to be 30% by 2027. We are engaged in two ways in sustainability.
In one way as a company that is what we call our footprint. And another way is how we can provide solutions to our customers to decrease, for example, their sale to emissions to increase the recyclability of their product. So, we are engaged in both.
Narrator: A gigafactory is where technology for electrification and decarbonization in electric vehicles is produced. It's estimated that by 2030 there should be 400 gigafactories around the world, the vast majority being within Europe.
Emmanuelle shares a particular use case in relation to gigafactories between both Capgemini and Dassault Systemes.
Emmanuelle: First point on the gigafactory as you mentioned Laurence, we need a lot of batteries for electric vehicles. So, we see new gigafactories everywhere. What is very challenging in this industry is that it is a new process, new manufacturing, chemical processes that we are not used to implementing.
So, these gigafactory, this battery world is now a collaborative world and that's true for everything in sustainability. The car maker now needs to collaborate with many partners for other industries.
Just have a look at ACC for example. It's a joint venture between Stellantis and Mercedes and some energy makers like Saft. What is new is also this specific chemical process, a lot of manufacturing challenges.
Capgemini is really very focused on how to help its customers in this journey on design of the batteries, on manufacturing, also looking at the new regulation with the digital battery passport. We try to help our clients as much as possible in this journey.
Laurence, I give you the floor with this use case between Capgemini and Dassault Systemes.
Laurence: Yes, and I also want to add that the investment is huge currently on batteries. We try to do the total of old investment in the planet worldwide in this area. In electrification of vehicles and battery gigafactories, it represents more than 2.5 billion per week invested by the industry.
It's huge and it's worldwide in all the continents all over the world and that is quite unique to see such level of investment coming from the automotive and high-tech sector to provide batteries to EVs.
If I can conclude on this investment, it's an important investment. That means that electrification is ongoing, and a lot of people invest a lot to succeed in EVs. That is important for us to share with the audience.
Coming back on gigafactories project, this is a race because they need batteries for their vehicles, so that's why they partner a lot that you said Emmanuelle, we have a common offer with Capgemini and Dassault Systemes to engage fast in manufacturing for the pilot line and also for the mass production of cells to support our customers to go fast and to decrease the scrap as soon as possible.
Emmanuelle: The scraps are a big challenge today in this manufacturing process.
Narrator: Resources are not infinite, and we need to stop flooding the earth with waste. So, today the automotive industry needs to be focusing its sustainability efforts towards a circular economy.
This raises the question of what we do with a car when it comes to the end of its life and in particular, batteries.
Emmanuelle: Circular economy is also a big challenge for the batteries of course, because the batteries are composed of lithium, cobalt, such minerals that are coming from Asia. So, there are a lot of topics around sustainability.
First, ethics because we have to be sure there are not children working on that kind of a process. There are also topics of CO2 emission because mining, defining really CO2 contributors, is not done today with renewable energy.
So, it is not green and that's the challenge of the future to see how to extract them without emitting any CO2. There is a key question also about transport because all these minerals are coming from Asia and contribute also to CO2 emission.
This topic of how to reuse this component, this material, and this is not easy because dismantling a battery and sorting all these materials requires a lot of processes and this is challenging. We need innovation and the OEM, and the battery players are working on these topics.
I have some examples to give. To recycle steel, there is a gain of 58% of CO2 emission. When you compare one ton of copper from ore to one ton of copper that has been reduced, it's 65% of gain of CO2 emission.
And for aluminium, when you compare recycled aluminium to aluminium directly produced from bauxite, then you have less than 92%.
So, it's really a big challenge and the European commission will legislate about this because for the battery in 2026 or 2027, there will be an obligation of a recycled material in the content of the battery.
Laurence: There are regulations and the European community is very proactive in that domain. The digital product passport is an example, not only of cars and textiles, but the battery of vehicles will be the first part of the real product passport.
The timeline is not so long, so far because at the end of 2027 it's very close and a lot of things are to be designed to put in place this product passport. But it's a good way to trace materials, recyclability and to force this recyclability.
But there are also other materials in the car and today if we consider the rest of the car, 95% of the vehicle has to be recyclable. That is a regulation that the people don't know.
Car makers are very proactive on recyclability and circular economy today because there are a lot of parts of vehicles going in other industries to be recycled.
Emmanuelle: A great example of a vehicle we use from Renault is the new company called The Future Is NEUTRAL with a refractory influx. There are also some initiatives with Stellantis which is aiming to reach Carbon Net Zero by 2038 through circular economic principles.
And these four are the mindset for us, that's women, repair, reuse and recycle. This is very important in a circular economy and OEMs are working on it. I also want to mention BMW.
BMW has ambitious targets. By 2030, they will have the material used in its vehicle reduced by 50%. So, a very aggressive target, this is not new. 20 years ago, car makers worked already on recycling aluminium in the plants.
That was not for sustainability reasons because we didn't speak about sustainability at this stage. That was for profitability reasons for the economy. That's the key point. Also, if we want to scale a circular economy, we have to make it profitable.
Laurence: Today, it's difficult to design a vehicle. Frankly, it's a challenge because it has to be safe, it has to work and it has to be affordable. Today, we can see a few projects going beyond that.
So, how to design in the context of generative economy, that means to have a smaller ecological impact and longer life because sustainability is also to extend the life of the products.
So, how to do that is completely different in the design because we know that the product of today may become the raw material of tomorrow and that changes the way ACE and OP design manage to help the industrial companies to produce cars in mass production.
Emmanuelle: And in that domain, there are still a lot of things to do. We already design with sustainability but not early enough.
Laurence: Yes, how to design knowing the dismantling is completely different. It's a design completely different from what is done today.
Emmanuelle: And how to decide to repair also. Do I have to put a screw here?
Narrator: We're seeing the automotive industry being forced to rapidly change its methods and practices to keep up with sustainability for a greener future. As a result, talent within the industry is having to adapt and upskill.
Both Laurence and Emmanuelle share their own experiences within the industry over their 30-year careers.
Emmanuelle: Automotive is really leaving a big revolution in innovation with these new processes, et cetera. And this is also a revolution for people, for talents because the specialist of diesel, the specialist of gasoline, have to now design electric powertrain batteries and this is completely different.
Laurence: We are coming from there Emmanuelle, isn't it? Yes, we started 30 years ago in engine development, we know this transition.
Emmanuelle: Yeah, we know and it's not so easy. We've done it. It's an industry that adapts very, very quickly. But anyway, this is a key challenge on a French, European worldwide side because it's new skills. Speaking about digital, also battery, passport, traceability, data driven solution.
20 years ago, the world of data, et cetera, that's completely new and, in my opinion that is really booming. It's growing very fast, and we need new skills. So, it's also an opportunity for women to enter into this world of digital.
We need new skills in design. We need new skills in manufacturing, we need new skills in this digital transformation. That's key.
Laurence: That's true. We need new talents. It's easy for me to compare because I'm coming from the automotive sector. Started at mechanical engineering engines and now I'm in a tech company.
The system is a tech company, modelling simulation is a scientific company, and I can see how the software of vehicles will help and support sustainability. When the car is on the road, you are able to increase the emissions or the range of the vehicle, how the vehicle is used thanks to the software.
That's why there is a lot of demand for software skills in the automotive sector. Today, it is not enough, in the automotive sector, there is a lack of software developers, software engineers, system engineers also.
And there is a huge program. We can see that everywhere in the world, there is a huge program of car makers to hire system engineers and softwares engineers.
We think a lot of car makers because that is the logo on the front of the car but there is a complete economy in the automotive sector with suppliers. A lot of them need to switch to rescale to find software engineers and developers.
Emmanuelle: It’s also important to upscale people in sustainability, terminology, goals, stakes, and that's also difficult to find on the market. I would say to young people, learn digital, new manufacturing processes.
I've gone to my engineering school and now they teach sustainability in the engineering school, so that's good. And currently we are missing these people. That's three areas I think will be booming.
Laurence: I would like to learn about systems because what is important is to understand the complete lifecycle and the system approach helps to qualify the cycle and gain not only for one part of the process, but to consider the complete life cycle assessment.
Narrator: As we look towards the future, Emmanuelle and Laurence discuss their hopes and ambitions for sustainability in the automotive sector.
Emmanuelle: All car makers have very strong ambition. They are used to fulfilling their ambitions. So, I'm very optimistic and I think that in five years we will have significantly reduced our CO2 emission in the automotive sector.
And I listened to the radio this morning, they explained that in France, we have really achieved our target this year. So, it's not the automotive industry only, but it's very encouraging.
I'm really convinced that with this upskilling of people explaining that there is a future, a future in which we are really proactive, there is a future where we will achieve our targets.
And so, this young generation is very scary and my message to this young generation would be we act together, and we will succeed to reach our targets.
Laurence: From what we can see from Dassault Systemes, Europe is on the track and that's true that OEMs invest a lot. EVs are one of the solutions to decrease CO2 emissions. Circular economy, there are projects, the trial is an example, but there are others.
So, Europe is moving. There are a lot of EVs in China. There are regulations for the U.S. market to move from ICs to EVs. So, the dynamic is there, investment is there. And there are other countries who are choosing other solutions.
For example, India, they decided to address the vehicles on the road because they have a lot of vehicles and if they want to transition faster, they need to address vehicles on the road.
So, today, they study other solutions not only replacing existing vehicles with new EVs but addressing decarbonized vehicles on the road. So, the world is moving.
[Music Playing]
Narrator: Indeed, the world is moving and so is the industry as it shapes itself for a cleaner and brighter future. When Emmanuelle was defining sustainability, she said that “If we act together, we shall succeed to reach our targets.”
Later in the conversation she said how car manufacturers are used to fulfilling their targets. This is really encouraging that the automotive industry is in good hands as we accelerate towards the future.
It was interesting to hear Laurence share the history of electric vehicles and how it was the infrastructure which held back its development as there is now significant focus upon the infrastructure alongside strong regulations with the goal to being carbon neutral by 2040, things look positive for the long-term adoption.
Thank you to both Emmanuelle Bischoffe and Laurence Montanari and thank you for listening to this episode of Driving the future by Capgemini. See you next time.