Continental AG, one of the world’s largest suppliers of automotive components, will no longer invest in parts necessary for the operation of internal combustion engines. Instead, the company will focus on electric vehicles.
An important sign of the electrification of the auto industry is the refusal of Europe’s largest manufacturer of tires and accessories for cars, the German concern Continental, to invest in parts for internal combustion engines, TechCrunch writes.
“Our customers are increasingly turning to hybrid engines, as well as to cars using clean electricity,” said Andreas Wolf, head of the company’s Powertrain division, which will operate under the new name Vitesco Technologies in the future.
This transition to electricity is caused by stringent rules that are introduced around the world. City authorities are increasingly demanding of diesel and gasoline vehicles, and less tolerant of trucks and SUVs in central areas. In some parts of California, stringent emission laws are enacted to meet climate change goals.
Looking at this, many car companies – in particular, Volvo and VW – also announced plans to increase sales of electric vehicles and expand their lineup, whether it be hybrids or electric cars with batteries.
There are many opinions on exactly when the tectonic shift towards electric transport will occur. Continental’s position is important because component manufacturers are still cautious – if you invest too much in the development of new parts and do it too early, you can fill up warehouses with unclaimed goods and incur losses.
Continental’s actions show that the electrification process has reached large auto component manufacturers. If these companies want to survive and meet the needs of automakers, they will have to change after the manufacturers.
Continental does this carefully: the company, for example, is not going to produce solid-state batteries, because, according to Wolf, the market is not yet ripe for this technology. But the company is ready to reduce investments in hydraulic components – injectors and pumps for gasoline and diesel engines. All this will lead to serious changes within the concern.
Due to too fierce competition with young companies like Tesla, he recently announced his resignation as head of the company, Harald Kruger, head of BMW. He could not quickly respond to changing conditions and lost the initiative, as well as many leading engineers.