Moehlenkamp: Transform to survive in era of new mobility

Traverse City, Michigan – Suppliers who are not prepared to embrace new mobility options may not survive in the long run, Freudenberg Sealing Technologies CEO Claus Moehlenkamp has warned.

Indeed, Freudenberg Sealing Technologies could lose around 70% of its automotive sales if it does not embrace opportunities around e-mobility and fuel cells, he said in a presentation at the 2018 Center for Automotive Research Management Briefing Seminars (CAR MBS) conference.

At the event in Traverse City, Moehlenkamp outlined how his company is redefining itself through a series of strategic initiatives that include internal realignment, new partnerships, technology transfer across industries, renewed investment in core competencies and entry into new markets and technology applications.

“It is no longer a matter of if but a question of when disruption will impact automotive suppliers,” emphasised Moehlenkamp. “Any supplier who is heavily focused on the powertrain systems derived from the internal combustion engine is at risk and will be challenged in the long run. It is imperative to seize the new opportunities being offered.”

ICE to the future

Freudenberg Sealing Technologies expects (internal combustion engines) ICE powertrains to remain crucial in the near term, especially as sales of plug-in hybrids with electric powertrain and internal combustion engines grow.

By 2025, however, the company expects pure electric vehicles to gain significant volume as manufacturers overcome technology and market challenges. Growth in fuel cell applications will follow. E-mobility technology will gain significant volume by 2025, fuel cell applications will follow.

According to Moehlenkamp, Freudenberg Sealing Technologies has analysed how this transition will impact every aspect of its operations, from R&D, product engineering and manufacturing processes to supply-chain operations, marketing and sales and workforce employment.

The company has spent years developing components that address some of the automotive industry’s toughest ICE challenges, with developments such as friction-free seals and gaskets. These solutions must now be re-oriented to address unique battery-powered and fuel cell systems challenges as well, Moehlenkamp said.

Sealing technologies that lower friction, increase power and efficiency and address light-weighting and compact design requirements, for example, will be equally important in an era of new mobility.

But in addition, “we want to provide made-to-order products for nearly all the components of an electric vehicle,” Moehlenkamp said. To achieve this, the company has reorganised itself internally and begun pursuing system and module capabilities in lithium-ion battery and fuel cell technologies through new external partnerships.

New organisation

In 2017, Freudenberg Sealing Technologies showed its commitment to alternate powertrain technologies by establishing a dedicated e-mobility sales and marketing organisation. This unit is responsible for building product and service opportunities and trust with existing and new customers working in the electric powertrain arena.

By analysing evolving technology requirements of e-mobility vehicle manufacturers, the company has expanded its product portfolio to include unique sealing solutions that address thermal management, higher safety standards, electrical transfer, electromagnetic shielding and a longer service life, among other trends.

Company analysis, added Moehlenkamp, also revealed that growing e-mobility and fuel cell opportunities existed outside of the traditional automotive applications. Freudenberg Sealing Technologies has taken steps to capitalise on these opportunities, including the formation of a new division that is anchored by two recent acquisitions.

The company’s new Battery and Fuel Cell division will pursue e-mobility and fuel cell opportunities in the commercial truck and bus, marine and energy industries, among others, Moehlenkamp revealed.

In support of this work, Freudenberg Sealing Technologies has acquired the Munich, Germany-based fuel cell system manufacturer Elcore, and a significant interest in Midland, Michigan-based XALT Energy, a developer and manufacturer of lithium-ion battery cells, power electronics and battery management systems.

“Elcore and XALT are crucial to our strategy of strengthening our current portfolio, investing in electrified technologies and building our business with strategic merger and acquisition opportunities,” Moehlenkamp said. “With the additions, we have grown our expertise and module capabilities in lithium-ion battery and fuel cell systems.

“We will continue to consider merger and acquisition opportunities that support this strategy and help our company grow and capture market share,” the CEO added.

The addition of Elcore and XALT brings new R&D and manufacturing facilities, as well as skills, to Freudenberg Sealing Technologies. The companies also bring additional important industry partners like ABB in the marine and New Flyer in the electric bus and Bosch in the stationary energy industries to the relationship.

Technology transfer

All of these strategic initiatives – reinvesting in core competencies, internal reorganisation, new partnerships and new markets – are designed help Freudenberg Sealing Technologies weather current disruption in the automotive industry and grow even stronger in the future.

A final element, continued Moehlenkamp, is to tap into the technology resources available across the entire Freudenberg organisation – towards bringing new innovations in e-mobility and fuel cells to market faster, more efficiently and more effectively.

Freudenberg Sealing Technologies is already leveraging research and material developments pioneered by other Freudenberg sister companies including Freudenberg Filtration, Freudenberg Performance Materials, Freudenberg Medical and Vibracoustic.

With the automotive industry’s evolution to alternate powertrain systems, more opportunities to apply existing technologies to novel challenges will likely emerge, concluded Moehlenkamp.