Post Interview October 14, 2021

Xaver Pfab – BMW Group

Xaver is responsible project lead for grid integration projects for the BMW Group, which includes connecting electric vehicles into the electricity grid. BMW Group has been an e-mobility pioneer for years, putting 500,000 EVs on the road to date.

What is the ambition for BMW, and your industry, in relation to energy transition?

The biggest challenge for the automotive industry is its transformation, driven by electrification and digitalisation. For its part, the BMW Group is accelerating its electric mobility ramp-up. Based on current market forecasts, we expect all-electric vehicles to account for at least 50 percent of our global sales in 2030. This means we will put some 10 million all-electric vehicles on the road over the next 10 years. But it’s not just on the product side. Many of the production facilities we use today for combustion engines are being transformed for the new era. For instance, at our plant in China, where we currently produce diesel models, we’ve established production lines for our fully electric drive unit.
From scratch to the finished product, we’re pushing the transformation towards e-mobility. The future of individual mobility will be powered by electricity, and to help the planet this has to be electricity drawn from renewable energies. The ‘Bidirectional Charging Management – BCM’ consortium research project I’m leading – where we work with TenneT and Equigy – is the perfect example of BMW’s holistic approach. This aims to interlink vehicles, charging infrastructure and power grids for the first time in a way that facilitates the use of renewable energy – and at the same time increases power supply reliability. But it’s not just this project; we can look back on at least 10 years of initiatives that have brought us closer to the grid integration of electric cars.

What role do consumer-owned devices play in the future electricity landscape?

As a car manufacturer, we’re used to putting the customer at the heart of our activities, product design and services. And in the area of the energy transition and decarbonisation especially, it’s important to understand that the customer is key to all our efforts. Every customer who owns a vehicle is also a utility customer. And as customer information is needed to integrate the device into the grid, we must align with the utility provider. For decentralised assets to deliver a significant amount of flexibility and energy, it’s also necessary to convince customers of their role as prosumers and active players in the energy market and make it attractive for them.

How do you engage consumers in this change?

Looking back at learnings from our BCM project, previous studies and research results, we’ve learnt that, in principle, there’s a lot of interest in these new opportunities from customers. They’re not only interested in using EVs, but also in the wider electricity system. EV owners, meanwhile, are already engaging with new technologies and feel a strong sense of responsibility to take part in the decarbonisation journey.

How do you prepare your organisation for the required change?

With our latest EVs, the i4 and iX, BMW is at the point of bringing the fifth generation of electric drive trains to the market. We’ve come a long way. In 2008, we kicked off our e-mobility programme with the MINI E, a demonstration electric car we developed as a conversion of our Mini Cooper. With this trial, we become the world’s first major car manufacturer to deploy a fleet of more than 500 all-electric vehicles for private use. Then in 2013, we launched the BMW i3, our first mass-produced zero emissions vehicle, launched as part of our electric vehicle BMW i sub-brand. Now, in 2021, we’ve announced that by 2023, we will have 13 fully electric models in the market. So, we can say e-mobility has been part of the BMW strategy for the past 15 years.
A core belief at BMW is that sustainability and premium are connected and enable one another. This has long been part of our strategy, and we’ve made the investments to reflect that. In 2019, for example, we opened our Battery Cell Competence Centre in Dingolfing, aimed at advancing battery cell technology. We’ve really put our money where our mouth is, investing heavily in new technologies and every other aspect of the value chain, design, development, manufacturing, and communication.
Another example of how we’re gearing for the future is a EUR 400 million investment in a new vehicle plant at our main production site in Munich. A new vehicle assembly is to be built between now and 2026, effectively transforming our plant as we prepare to electrify our lineup and launch more battery-electric cars in coming years. From the end of 2025, no further combustion engines will be produced in Munich, and the site will only be used to produce electric power trains and electric vehicles. This is a tremendous statement for a car manufacturer like BMW, where the combustion engine has traditionally been core to the brand.

What are the biggest challenges in relation to sector coupling?

We’ve got cars on the one hand, and the electricity system of the future – with its focus on decarbonisation and decentralization – on the other. It’s exciting to be able to bring these two different worlds together. But we need bilateral understanding, and technologies and rules to make interactions between the two groups possible. It’s a huge technical challenge to bring the various standards, including automotive standards and utility standards, together. Add to that a new regulatory framework, because our current framework was made in a world where no one had even thought about decentralisation. The customer is important here too: if they are not interested in using these new features and opportunities, then the best systems and regulations won’t be effective.

“The customer is important: if they are not interested in using new features and opportunities, then the best systems and regulations won’t be effective.”

– Xaver Pfab, BMW Group

What is the biggest change we will have accomplished by 2035?

For BMW, it’s the ways we will have transformed our company for the future. But you can multiply this to every car manufacturer which is also striving to transform, as well as the suppliers in the automotive industry.
As for the world in 2035, I think most of the transformation will have already been done, and must be done, given the tremendous impact of climate change. It’s already a race against time, and things will accelerate fast. Tackling this will take a big effort from all parties. It may mean more and faster investments at company level, and accelerated efforts around legal and regulatory frameworks.
Customers will still be top of mind, given there’s still a lot of uncertainty around whether e-mobility is really the way to go, or if hydrogen is a better alternative. For a typical household, buying an electric car is a huge investment. Add the energy transition to a new car discussion and it confuses many people.
Sustainability and security of supply are important factors in the expansion of e-mobility. So, the circular economy and mobility are going to become more and more important. This underpins our ambitious goals and product portfolio for 2030, and beyond. Ultimately, our goal is to reach the point where the greenest vehicle out there is a BMW.

What does the energy transition mean to you?

I’ve tried to adapt what I do in my work to my personal behaviour. I have a PV system (solar power) at home and my wife and I drive EVs. The next step is to refurbish our home heating, and install a combined heat and power (CHP) system. But I realise none of this is easy for the average person. There’s a lot of uncertainty and a lack of good information about how to do the right things at an affordable price.

To increase a broader awareness of the changing energy and industry landscape in relation to the energy transition and use of distributed energy resources to provide services to the grid, we are engaging interviews with a series of frontrunners, visionaries, innovators, and thinkers from the various stakeholders’ roles who can help us visualise and reveal all the: Changing Perspectives

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