CO2 Reduction by LCA, Digitalization Must Be Pursued in the 2020s

Editorial

The automobile industry in the 2010s, which witnessed a slump following the Lehman shock, recovered and grew with the expansion of the Chinese market, and new fields such as CASE (Connected, Autonomous, Shared, Electric) and MaaS (Mobility as a Service). However, in the second half of the decade, the global automobile industry was hit by the stalling Chinese market generated by the US-China trade friction. The 2020s will start again with a slump.

Despite the market downturn, regulations and competition are expected to intensify, and it seems unlikely that companies will be able to relax their technological innovations. Under such circumstances, there are two issues that engineers must address. Reduction of CO2 emissions through LCA (life cycle assessment), that is ensuring sustainability, and comprehensive digitization.

For LCA, the electrification of powertrains is not enough. CO2 reduction in all vehicle areas including production, disposal and reuse are also required. Digitalization must involve not only consumer-visible parts such as infotainment and user experience (UX), but also all areas from chassis and vehicle control to design, development, production, sales and after-sales. Autonomous driving is one of the ideal areas of digitization, but it has yet to be known when it will be realized. However, it is certain that digitization will bring more innovation to each field.

Software supports digitalization. It is predicted that the value of software assets in vehicles will increase from less than 10% today to more than 60% by 2025. The number of software engineers in the automotive industry is now growing three times faster than mechanical engineers. At Ford, more than 9,000 software engineers have registered on GitHub, an open software development platform, and have already shared more than 150 million lines of code internally. “Every company will be a software company in the future,” said Microsoft’s automobile sector boss. The company is now growing by embracing the digitization of the automotive industry.

Major automakers announced restructurings in late 2019 in an effort to focus on sustainability and digitalization. These measures are intended to enhance technological innovation through relocation while the market is sluggish.

Daimler held an investor briefing in November 2019, but the company’s CEO Ola Källenius, who spoke at the event, barely mentioned CASE and focused on reducing costs instead. By the end of 2022, Daimler plans to lower staff costs by more than 1 billion euros and reduce management positions by 10%. Capital expenditures and R&D costs will be 16 billion euros in 2020, same as in 2019, and the amount will be reduced to 14 billion euros in 2021 and 2022 which is the same amount allocated in 2018. Daimler says it will implement this investment control measure by clarifying and simplifying its priorities and expanding external alliances. Daimler’s top priority for development is electrification. In Europe, CO2 emission standard set at 95 g/km will be introduced in 2021 and manufacturers exceeding that level will be fined. In addition, CO2 regulations will be tightened in 2025 and 2030. The electrification of powertrains and reduction of CO2 emissions by LCA are essential requirements to meet these regulations.