CES 2022: Valeo continues to digitize and electrify

The CES 2022 aims to return to pre-pandemic levels. For Valeo, this means their bouquet of innovations from the IAA will be complemented by new "flowers". 

In addition to the latest generation of LiDAR and the newest electric drives for cars in cooperation with Siemens, filtration and air conditioning systems, complete drive systems for bicycles and cargo bikes, charging technology, and COVID-19 testing stations that can detect the virus within two minutes, are also included. A huge portfolio with various aspects, aimed not only at making mobility more pleasant for OEMs and users. At the same time, the industry is being driven by many new topics, which we discussed with Dr. Andreas Heinrich, head of Valeo Germany.

Valeo has a very comprehensive portfolio in the field of mobility. How are the individual areas distributed proportionally? 

Heinrich: Our intention is always to make mobility safer, cleaner, and smarter. To achieve this, we have four business areas supported by a service department that make this possible. First, there is the Comfort Driving Assistance (CDA) business area, which accounts for about 20 percent of the revenues. This is followed by the Powertrain Systems area with around 27 percent, the Thermal Systems area responsible for around 23 percent, and last but not least, the Visibility Systems area, which ranges from wipers to lights and accounts for around 30 percent. From the revenue shares, you can already see that all areas are roughly equally large and important.

At the IAA, you've ventured into completely new areas: I can't place the topic of bicycles and cargo bikes, nor healthcare.

Heinrich: When I use interior sensors to determine the well-being of the occupants and develop new systems from this, it comes from the Comfort Driving Assistance area – and to then set the correct air conditioning, we need climate and thermal management. This topic can be extended over infrared systems for heating or new filtration systems to interior lighting – exciting new synergies arise from the individual areas, which in turn bring forth new products.

It seems that such overall systems are becoming increasingly important for the automotive industry, yet recently there have been efforts to bring these competencies back in-house. But in areas such as driving assistance/sensors or electrification, Valeo is leading. What trends are emerging here?

Heinrich: We have been accompanying the automotive industry on its path to electrification for over ten years. The transition from combustion engines through mild hybrids and plug-in hybrids to purely electric vehicles binds many resources. Therefore, we see very good market opportunities for us in electrification, where we are a global leader, and provide increasing content. We started over ten years ago to adapt our portfolio accordingly. There are various approaches to this: for example, we invested in 48-volt technology very early on, as it allows significant savings with very manageable costs. From these new developments, we then develop new components, parts, and platforms. Our strategy is to roll these out into other markets and product groups, such as scooters, shuttles, or autonomous delivery vehicles.

The connection from car drives to bicycle drives is clear, but isn't charging technology for electric vehicles a completely different topic?

Heinrich (smiling): For e-bike drives, we were the first to combine an electric motor with a fully automatic transmission. A good example of our integral approach. We also apply this in charging technology: for the electrification of drives, we deal with inverters and other components. So, the know-how is there, and we are adapting it to other areas beyond automobiles. In 2022, we will start production with our first charging stations.

An important field is autonomous driving and ADAS. At the IAA, there were a few exciting topics, including automatic parking and driving demonstrations with Level 3 and 4. This area also includes LiDAR sensor technology. Does the complex mechanical rotating mirror technology in use meet future requirements?

Heinrich: Exactly, autonomous driving is a central topic for Valeo, and we are the world's number 1 in driving assistance and sensor technology. LiDAR plays a significant role here, and we announced the third generation in November. We are very well positioned in the market: currently, I would say that 99 percent of LiDAR scanners installed in vehicles worldwide are equipped with a Valeo LiDAR. Since 2017, we have produced about 150,000 units in Wemding, and the rotating mirror technology works perfectly and without problems. Recently, Daimler received approval for the S-Class Drive Pilot to autonomously drive at Level 3. This market will continue to grow, and we estimate that by 2030, around thirty percent of premium vehicles will be Level-3 capable. Production-wise, the rotating mirror technology works very well, but regarding future perspectives: there are approaches with micro-mirrors or solid-state, but we see that solid-state alternatives will gradually enter the market from 2023 and will not be available in mass production before 2026.

Thermal management is also a major part of Valeo's portfolio. Air conditioning systems still take up a lot of space. What innovations is Valeo working on in the field of cooling/heating?

Heinrich: Thermal management has reached a new dimension because the heat generated by the engine is missing for heating, and cooling requires an air conditioning compressor. Heating and cooling are extremely energy-intensive in electric vehicles, especially since the battery also needs to be temperature-controlled. We are the world market leader in battery temperature control, but we can push this topic further with our divisions: for instance, instead of heating the air, one can heat surfaces more intensively, and through the systems in “Comfort Driving,” we can detect how many people are in the vehicle and their well-being. With our FlexHeater, for example, we can save 50 percent heating power for a driver, and even with a fully occupied car, we need 25 percent less power.

These are exciting numbers...

Heinrich: Which we can use for more efficiency. Hardware-wise, we can leverage additional efficiency potential with infrared heaters and heat pumps.

Why aren't heat pumps standard in every electric car?

Heinrich: This has several reasons. Firstly, it is clearly a cost issue; secondly, it depends on the fluids used. For example, the coolant R744 based on carbon dioxide works well with the heat pump for heating but is poor for cooling and also not very cost-effective. Here, it depends on many small details.

This goes hand in hand with the topic of filtration and virus protection – also in public transport and infrastructure. What innovations can we expect here soon – and can these perhaps even help in combating or containing the pandemic?

Heinrich: Combatting the pandemic is extremely important for Valeo and has been stringently aligned within our organization worldwide. The pandemic also impacted our customers: it raised health awareness worldwide, a topic that was previously mainly in Asia, such as fine dust and antivirus air systems. Accordingly, our filtration and purification systems are continuously developed, and their effectiveness is constantly validated. We have filter products for both the public transport sector and passenger cars.

Does this also help against the spread of COVID-19?

Heinrich: Yes. Currently, our in-house produced filters for cars retain 96 percent of all allergens and 99.4 percent of viruses, including COVID.

Did this lead to the stationary COVID-19 testing station?  

Heinrich (smiling): Indirectly, yes. This was created in collaboration with institutes and clinics and allows a COVID-19 test in less than two minutes. A very exciting topic that we will continue to explore and expand.

But the filters have to be disposed of eventually, as well as the coolants and raw materials of your products? Are there already approaches for a cradle-to-cradle principle or material cycles?

Heinrich: I would approach the topic from a completely different angle first, namely climate protection and climate neutrality in general. Many internal projects have been running for a long time, as Valeo aims to be climate-neutral by 2050. By 2030, we want to achieve 45 percent climate neutrality.

That sounds rather cautious compared to many other announcements...

Heinrich: Because it is a very complex topic that cannot be comprehensively tackled in a few years. A significant leverage is clearly in production and energy supply, where we can reduce CO2 by 75 percent by 2030. We are investing 400 million euros for this. These funds are flowing into LED lighting in all buildings, heat recovery and self-cooling buildings, and large-scale equipping of our properties with solar and photovoltaic systems. Our location in Bad Rodach, where we coincidentally develop thermal systems, is almost completely energy-autonomous.

Research and development also take place at your company. Can you provide a figure for R&D?

Heinrich: Gladly – the topic of CO2 reduction concerns not only our manufacturing but also our products: Valeo has long been focused on reducing the CO2 footprint on the product side as well. Over the last ten years, Valeo has invested more than 10 billion euros in technologies that reduce CO2 emissions. Our revenue from technologies to reduce CO2 emissions has increased 20-fold since 2009 and will reach around 10 billion euros in 2021. Therefore, research and development is also the foundation of our success.

Do you have any figures for R&D?

Heinrich: Of course. In 2020, we reinvested roughly 12 percent of our revenue worldwide in R&D – the industry average is around six percent. And the number of our engineers worldwide has also increased: from 6,000 in 2009 to over 20,000 in 2020.

Is Valeo also considering developing its own chips and writing its own software in the future? Could there one day be a V-OS?

Heinrich: The chip shortage is a problem that affects the entire industry, and no single company can solve it alone. But in terms of software, I believe we are very well positioned, because over a third of our 20,000 engineers, roughly 7,000, work in the software sector. This is the future.

How do you assess the future for Germany as a location?

Heinrich: I look positively to the future! Germany is extremely important for Valeo, as German car manufacturers contribute around thirty percent to our group revenue. All business areas and Valeo Service are represented in Germany. We have 28 sites here, 14 of which are production facilities, eight with R&D, and front offices with our customers. Overall, we have 7,200 employees in Germany, allowing us to maintain close proximity to our customers.

And how has the electric drive joint venture with Siemens developed? The drive is used in the Mercedes-Benz EQS.

Heinrich: The joint venture has far exceeded my expectations! Our goal was to accompany the OEMs in their transition to electrified and fully electric drives, and it has worked very well so far. The transformation will continue to accelerate. The market will continue to grow strongly, expanding fivefold by 2030

And how do you assess the collaboration with Siemens?

Heinrich: That is also going excellently! We are responsible for electronics and software and bring our expertise in the automotive industry, while Siemens brings its expertise in high-voltage technology. This complements each other wonderfully, allowing us to offer our customers a very efficient solution.

How do you see the efficiency of electric drives developing in the future?

Heinrich: Efficiency is a good keyword: According to our experience, there are still differences in the specific drives, even though electric motors are inherently very economical. The development of electric drives will be driven by several factors: On the one hand, by the raw materials and their availability. Less rare earths, more recycled material, there is still a lot of potential here. And secondly, of course, by the efficiency of the drives themselves, and we are already working on some new solutions that will hopefully find their way to the market quickly, because the fact is: the electrification of mobility needs an increase in efficiency!

The interview was conducted by Gregor Soller

Biography of Dr. Andreas Heinrich:

Born in Dresden, Dr. Andreas Heinrich started his career as a project manager at Siemens VDO before moving to Visteon Corporation, where he worked as Director German OEM Customer Group and Managing Director, before becoming Vice President at the European subsidiary of Lear Corporation. He has been with Valeo since 2014, starting as General Manager Thermal Systems. Since 2019, he has been responsible for the German business as Group President Germany.

What does that mean?

Valeo began early on to shift its portfolio to new products – a process the company continues today. Accordingly, many new developments will be presented in 2022 as well. Meanwhile, the company is advancing its efforts toward CO2 neutrality – setting realistic and achievable goals.