IAA Voices Conference Special: Dr. Albert Waas

Dr. Albert Waas is Managing Director & Partner at the Boston Consulting Group, where he is in charge of the automotive and mobility sector in Central Europe.

Dr. Waas, what does the ideal transport of goods look like in 2030?

For one, we’re seeing a spike in transport volume. This entails a discussion of the modal split, and begs the question of how we will be able to shift more from the road to railways? At the same time, we’re seeing limits that necessitate the expansion of the railway infrastructure. Trucking will thus also play a core role in the future, which in turn leads to solutions for making the transport of good on roadways more sustainable.

And, ideally, what does personal transport look like in 2030?

This can depend heavily on the region or metropolis. The future of personal transport will definitely be automated and electric, and largely shared. In reality this will mean a greater shift from public transport to roadways. We’ve simulated this in great detail for the city of Boston. Overall, mobility is increasing but traffic is moving more toward autonomous fleets. This may be the norm in the world’s mega-cities in 2030, but it will not be the case for mid-sized German cities by that time.

Could autonomous driving also be a way to further integrate rural areas?

It will make rural areas more appealing if the traffic connections – at least a certain proportion of them – can be travelled autonomously. But we are still far from the door-to-door concept. Automated driving will initially only be available in certain areas, such as on highways, but this alone will reduce traffic and make the connections to rural areas more appealing.

You once said there are two core factors that describe the challenges of this: supply chains and charging. Looking at a swifter trend toward e-mobility, which of these would you want to solve overnight?

That’s a tough question (laughs). Both go largely hand-in-hand. As it stands now, supply chains place more limitations because, for example, there aren’t enough chips to produce all the vehicles that are in demand. Regardless of the charging infrastructure, the demand is far greater than the supply. This means that we have to resolve the supply chain issue in the short term.

I’m convinced that the supply chain issue will be resolved in the medium to long term. The run-up to electric cars is much faster than the industry would have expected in past years. We expect them to make up 60% of newly sold cars in Europe in 2030. The charging infrastructure isn’t catching up, partially due to sluggish approval processes. Of course, this is hampering demand. If we want to induce greater changes, we have to speed up the creation of the charging infrastructure.

It’s the classic question of the chicken and the egg: What has to come first, the electric car or the charging infrastructure? What would you say?

Ideally the run-up will occur parallel. In reality, the providers of the charging infrastructure first have to invest, because there initially aren’t enough electric cars to generate the required profits. This will occur during the run-up of electric cars, which is why production of the cars came before the creation of the infrastructure. Now we need acceleration.

Then there’s a third factor: lithium. Recycling comes in the long term, but that will only really come about in ten years. The delivery of lithium produces carbon dioxide. How will we be able to acquire these quantities in a way that is both socially and ecologically sound?

The important thing is that there’s enough lithium for our needs. However, there isn’t enough capacity for transport. The question is: How will we transport enough lithium in this short amount of time? Additional investments are definitely needed to provide this capacity. The next question is: Will we also be able to do this sustainably? The mining industry also has to support decarbonization and sustainability, as the automotive industry can’t do that alone.

But it also has to shed more light on the supply chains, define and monitor requirements, and change providers if necessary. Individual OEMs are already acquiring lithium stores. Until now it was uncommon to skip multiple steps in the supply chain and directly approach raw material providers. This allows for much more direct influence.

Will we even be able to mine lithium in Germany or Europe in the future?

Compared to other regions in the world, we have very little lithium. But there are efforts to acquire it, such as from the Upper Rhine Rift. And as prices increase, lithium mining in Europe will become even more appealing. At the same time, Europe will definitely not become one of the largest suppliers of lithium. I’d focus more on recycling as a result.

There has long been a lot of skepticism surrounding electrification in heavy-duty transport, especially since the battery is so heavy that the vehicles have difficulties with their range. But heavy-duty transport is becoming increasingly electrified. How do you explain this, and where do you believe hydrogen or e-fuels may be the better technology?

We’re seeing relatively great advances in battery technology and electrified engines, as well as a degression of costs. As a result, electrification – including in heavy-duty transport – is becoming more interesting. For example, we believe that, in the year 2030, a good 30 percent of all newly sold trucks in Europe will be battery-powered. Fuel cells will also become more prevalent. But this poses a greater challenge when it comes to infrastructure.

OEMs focus on various types of technology, and ultimately there are three: electrified trucks, fuel cell trucks, and the traditional combustion engine – all of which cover a fairly wide range.

E-fuels are also really interesting, and they are especially important in industries that are harder to decarbonize, in particular the air travel and shipping industries. This is where the highest demand for e-fuels – or, for example, ammonia – can be found. E-fuels will also be part of the solution for road transport in the form of an admixture, such as E10.

At the same time, infrastructures have to be improved and supplied with green power. Are we on the right track?

Things are going in a different direction right now, of course – if we connect more gas power plants or coal power plants to power. If we leave out the current energy situation induced by the war in Ukraine, we see that decarbonization in power generation is advancing. Year after year we have less CO2 in our power mix. But, of course, it’s still not CO2-neutral, nor will it be in 2030.

The conversation about supply chains applies here, too: It’s all an interaction between various actors. The energy industry will also contribute and advance decarbonization in parallel with the automotive industry. But this also begs a lot of questions: Are consumers ultimately prepared to pay extra for green power? Are there solutions for storing it? One industry alone will not be able to answer all this. An electric vehicle’s CO2 footprint is much smaller, but not at zero – not now, nor will that be the norm in 2030.

What are you hoping for from IAA TRANSPORTATION?

I’m looking forward to an in-person meeting of the industry after a long break during the pandemic. We are certainly facing the greatest transformation the industry has yet seen. The IAA is the most exciting platform for the industry, and I’m excited to discuss cooperation in various areas – infrastructure, the vehicle industry, fleet and mobility providers, digitization, IT, and so on.

Thank you very much for the interview, Dr. Waas!