Development service provider: "Smartphones on wheels" - Edag CEO talks about car development and the role of China

According to Edag, it is an "expert in global mobility technology".

Development service provider: "Smartphones on wheels" - Edag CEO talks about car development and the role of China

According to Edag, it is an "expert in global mobility technology". The company states that it cooperates with all well-known vehicle manufacturers and suppliers. CEO Cosimo De Carlo is responsible for the business. In an interview with stern, the 49-year-old, who previously worked at Daimler and most recently managed the global automotive business at Altran, explains why classic mechanical engineering is no longer of great importance in the automotive industry. Instead, he assigns a key role to the use of software. China, which now has the largest electric car market in the world, plays a decisive role here. De Carlo says what he thinks are the reasons for the great success in the Far East. In this context, the CEO explains what is important so that the Chinese do not overtake us.

The development of autonomous driving is progressing more slowly than was announced. De Carlo explains why this is - and what advantages autonomous vehicles should have in our everyday life in the future. Edag wants to promote autonomous driving and use autonomous vehicles at the 2024 European Football Championship in Frankfurt.

De Carlo is responsible for the Edag business and thus also for around 8000 employees. For the CEO, these represent the greatest challenge to the success of his company, as he says. That's why he tries to motivate them in a targeted manner and, as it becomes clear in the conversation, relies on a rather unusual management style.

Mr. De Carlo, next year you want to test your "Edag CityBots" robotic vehicles in action on the Deutsche Bank Park site in Frankfurt. How can they help? We want to test how "autonomous driving" will work in the future. These are not only technical, but also human aspects. How do you react when you see the vehicle in front of you and it says 'Please get in'. What should this interface, the so-called human-machine interface, look like so that trust in the machine is built up? This is really a real laboratory where we have the opportunity to test a lot. We want to take on certain functions and tasks there. Together with the digital subsidiary of Eintracht - EintrachtTech GmbH - and other partners, we are researching the connection of highly automated driving with increasingly dynamic urban and economic areas as part of the "Campus FreeCity".

Why is the development of fully autonomous cars progressing more slowly than announced? This is progressing more slowly because the challenges and framework conditions that have to be met are very complex. You have to be sure that the products really meet the requirements - especially when we look at fully autonomous cars in a real environment. We have various security factors that affect development. The technology will continue to develop in this area, but first in a controlled environment - for example in intralogistics. In a normal environment, for example in our cities in Germany but also worldwide, people wanted a little more speed, but this trend will not stop. Because "autonomous driving" offers enormous potential for the future.

Namely? Today, between 90 and 99 percent of accidents are caused by humans. Autonomous driving offers safety and leads to fewer road fatalities. The second thing to consider are new business models. If the car drives autonomously, you are able to carry out other work in the vehicle or use services. In addition, we will make better use of the space in our cities in the future because we will need fewer cars and therefore fewer parking spaces. One reason for this is, among other things, car sharing services, which will gain in importance.

Tesla is now apparently taking a significant step back with its autopilot; its software no longer allows the driver to take their hands off the steering wheel while driving. When will cars be fully autonomous on the roads? That's a $100 million question. If we had the answer, everything would be easier. One can perhaps talk about a certain delay, but the development will move forward.

You say the automotive industry is going through a major transformation phase. What do you mean by that? The topic of electrification plays a major role. The internal combustion engine is becoming less important, while electric mobility is being promoted worldwide. In addition, the subject of software in vehicles is rapidly gaining in importance. Cars are increasingly becoming so-called smartphones on wheels. In the future, customers will expect new services from the development. Connectivity and user experience are becoming more and more important than the classic mechanical engineering topics that have had a strong impact on cars in the past.

Will we have electric cars and also hydrogen vehicles on the roads in the future? I believe in purely electric vehicles in the passenger car sector. Battery technology has developed rapidly in recent years, battery costs have come down. I don't necessarily think that we will need vehicle ranges of 800 or 1000 kilometers. The infrastructure in Germany is certainly not where it should be, but we all have electricity at home. Hydrogen is already an interesting alternative today - but more so in the commercial vehicle sector. Building an infrastructure for hydrogen cars will be difficult. But in the commercial vehicle sector, you can have a gas station in the main center and then drive through the cities during the day.

The trend in the automotive industry is towards premium vehicles. Can the abandonment of cheaper vehicles be successful in the future? I believe that people will also need cheap electric cars. This is indeed a challenge today – especially in Europe. I notice that many Chinese OEMs [abbreviation of "original equipment manufacturer", meaning: manufacturer] have a chance to enter the European market with cheap cars. In Norway, for example, the topic of electromobility is very strong - more than in Germany and other countries in Europe. And there are many new Chinese OEMs coming into the market. In Germany they are just starting. MG, BYD, Nio, Xpeng - these new Chinese OEMs have an opportunity to enter our market. And indeed, their products are cheaper than the classic German products. German OEMs are moving more towards premium. That means there could be a gap in the basic segment, and that gap could be filled by Chinese OEMs tomorrow.

What makes China's automotive industry so successful? China has been engaged in the development of the automotive industry for years. What fascinates me there is the speed. They develop products very quickly and have a certain openness to technologies. I remember when I was in China every quarter until before Corona times, I discovered something new every time. You learn very quickly. I don't agree with the prejudices that one often hears in Europe that Chinese products are of poor quality. I think the Chinese are catching up a lot. And what I really like is that they have a very strong focus on software and connectivity right from the start. This is very important for the younger generation. The topic of "perfectionism" in the classic body shape, on the other hand, is losing importance. And the Chinese recognized this very early on. In many technologies, I already see the Chinese much better than the Europeans.

Will the Chinese cars be able to assert themselves permanently on the European market? In China, they put more emphasis on entertainment for the car occupants - as you say - with us it's maybe more about safety. I still believe in success. Any OEM selling cars in Europe must comply with applicable safety requirements. No products are put on the street that are not safe. When I look into the past and think of the Korean cars Kia and Hyundai, for example: 25 years ago, people also thought that they would never be successful in Europe. Today it is quite normal for all of us to see so many Kias and Hyundais on the road. And I can very well imagine the same for Chinese cars - especially because the car is developing into a "smartphone on wheels". Anyone who has a car today would like to have an update every six months. With this mentality, which comes more from IT, you have the opportunity to continuously improve the product. Today a car is obsolete after three to four years. The Chinese have done a good job here. And here, too, we see that many European OEMs are increasingly developing cars for the Chinese market in China, because there they get a better overview of the expectations of local customers.

Is China outstripping us? It's difficult to say. I will definitely take them [the Chinese] seriously as OEMs. For me, they [the Chinese] present themselves as a new challenge for the European market.

How can you counter that in Europe and Germany? The way in which we developed cars in Europe in the past is now being very seriously questioned. In Europe, we need to increase the focus on user experience again. The development of a vehicle today is similar to the development of a smartphone. And the speed of developments will also play a major role. We need a long time to develop a perfect product. But software is never finished. So why wait so long?

How do you assess China's approach to economic activities on an international level? China has a clear intention: technological leadership, worldwide. In my opinion, we will see more and more Chinese products outside of China.

Their motto is "Tech or Dead". What do you mean by that? We need to invest heavily in innovation. The customer is only willing to pay money if we can offer added value. And this added value lies only in innovations and new or better services for the end customer.

So, is the biggest challenge for your business technology? The challenge is people. We do not sell products, we are a service provider. The added value of the company lies in our talents, the know-how of our employees. And only with the continuous further development of the know-how of our team will we be successful in the future. I've been with the Edag Group since 2018. The first thing we really wanted to implement was the topic "Why Edag and not another company? What values ​​drive us forward? Why do we work every day?" In my opinion, this is very important, because it is the only way to get talented people with an innovative mindset and a clear purpose. There are many engineers who can do the same. But you can only achieve innovations if you have lateral thinkers, if you establish a mindset in the company in which mistakes are not taboo and in which a lot of know-how from different industries can come together.

How do you motivate your approximately 8,000 employees? The quality of our management is an essential component of our entrepreneurial and personal development. That is why we have developed clear guidelines for our managers. Only through appreciative and value-creating cooperation, the joy of and about the success and the future skills of our company can we create a unique corporate culture. In addition, we invest in the further development of our employees and are open to new things. The fact that we are working on the further development of future mobility is certainly a great motivation for our employees. With us you have the opportunity to get to know different customers and to accompany very demanding projects. I constantly visit our locations worldwide and am very close to the employees. The added value of the company lies in the expertise and motivation of every employee.

"Leadership means being a role model" - that's what the EDAG management guidelines say. As CEO, how are you a role model? I'm the first person trying to live the company's values ​​every day and continuously reach out to the grassroots of the company. I try to create an environment in which interaction and cooperation between employees plays a central role.

I believe that today's manager is no longer a hero who knows everything. The CEO must create a network of leaders with the right mindset. I would describe my leadership style in three words: trust, freedom and challenge.

I've been told that sometimes you'd rather hire philosophers than mechanical engineers and that you would also get inspiration for new topics from your children, other cultures and colleagues from outside the industry. Is that the key to success? That might be a bit of an exaggeration. But not only engineers with the same background knowledge are needed. Innovations only come about through different ways of thinking. You only have this willingness to generate if you bring colleagues with different ways of thinking, experiences and cultures into the same room.

What significant developments or innovations will you make in the near future? We have a separate area for innovations. Here we work across companies with customers and partners from science and industry on a wide variety of topics. Only recently, as part of a funded project, we developed a zone-based, service-oriented electrics/electronics architecture that makes it possible to implement updates over the air in future vehicles. This is the basic framework for the software-defined car. This vehicle architecture makes it possible to bring new functionalities onto the market. With the advent of software in our vehicles, however, the importance of cybersecurity is also increasing. In addition to our innovative projects, we will set up an electromagnetic compatibility laboratory in Germany. The latest test methods are used in this new test laboratory. Among other things, we will examine vehicles or individual components and their resilience with regard to other electrical or electromagnetic interference factors.

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