In addition to the types mentioned, the switched reluctance machine and the axial fux motor also show potential for use as traction motors. Te switched reluctance machine is currently the subject of increased research activity as an alternative to the permanently excited synchronous motor. It ofers high efciency without the use of rare earth elements, but the control of the motor is more complex. Axial fow machines are also of research interest because they ofer high power density in combination with a small packaging impact. Although permanent magnets are used, their quantity is reduced. Apart from these new motor types, there are trends toward higher operating voltages (800–1000 V), higher motor speeds, and optimized cooling concepts. Another challenge is the electrifcation of the medium- and heavy-duty segments.

As an alternative to diesel, gasoline, or batteries, hydrogen (H2) has a calorifc value of 33 kWh/kg and can be used as an energy storage medium. Te hydrogen can then be used by fuel cells or even internal combustion engines without producing CO2 emissions. While hydrogen combustion is expected to play a greater role in heavy-duty and of-highway applications, fuel cell electric vehicles (FCEVs) could be a complementary technology for

**Fig. 8.5** Series drivetrains based on different types of electric motors (illustration based on AUDI AG (2019), Dr. Ing. h.c. F. Porsche AG (2021), and BMW AG (2020))

zero-emission long-distance individual mobility. Tese vehicles include conventional electric drives in addition to the fuel cell stacks and storage systems. Range is less of an issue, since hydrogen can be fueled in 3–4 min. Hence, hydrogen vehicles combine "the best of both worlds": Tey ofer all the advantages of electric driving, such as instantaneous acceleration and a smooth, silent, and emission-free ride, combined with the convenience of the fast refueling associated with combustion engine vehicles. Together with its partner Toyota, BMW has many years of experience in the development of FCEVs and has recently launched its second generation of fuel cell systems in the BMW iX5 Hydrogen pilot feet (see Fig. 8.6).

A perceived drawback is the efciency of the hydrogen energy chain because of the conversion steps involved (see Fig. 8.7). First, hydrogen is generated from electricity by electrolysis, made transportable either in compressed form (e.g., for transport in retroftted natural gas pipelines), or cooled down until liquefaction, or in form of a liquid organic hydrogen carrier (LOHC), and fnally converted back to electricity by means of a fuel cell in the vehicle.

However, in addition to pure efciency, overall system aspects must be considered. Te comparison in Fig. 8.7 only takes into account the use phase. When considering the whole life cycle, starting with the mining of raw materials, the production of components and systems, the assembly of vehicles,

**Fig. 8.6** Powertrain of the BMW iX5 Hydrogen with fuel cell stack, electric motor, and two high-pressure hydrogen tanks (BMW AG 2022)

**Fig. 8.7** The effciency of different powertrain options (*BEV* Battery Electric Vehicle, *SoT* State of Technology, *FCEV* Fuel Cell Electric Vehicle) (own illustration based on European Federation for Transport and Environment (2017))

and fnally the recycling after the usage, the diference between BEVs and FCEVs is much smaller. In the case of energy generated entirely from renewable sources, conversion losses have no signifcant efect on the ecological balance.

Also, from an economic and overall energy system point of view, the location and timing of the production of renewable energy must be considered. Self-sufciency regarding emission-free energy will not be possible in many developed countries, so that they will continue to be dependent on energy imports. Here, hydrogen as a regeneratively produced, chemical energy carrier can make a signifcant contribution to decarbonization. For example, ideal regions for the production of solar or wind energy are often far away from main industrial areas, requiring hydrogen as an energy carrier for the transport of energy, as electric powerlines have their limitations, especially for long distances. Since the yield of energy production in these regions can be much higher, the conversion losses are mostly compensated by the lower yield of local production of renewable energy in industrial areas (e.g., in Central Europe). In addition, the production of renewable energy depends on the weather conditions, which leads to times of energy surplus when the energy demand is low. In these surplus situations, instead of turning of the production of solar or wind power, the production of hydrogen results in a higher overall system efciency and also provides additional revenue for the operators of the solar and wind parks.

For the existing feet of combustion vehicles, synthetic fuels based on renewable electricity can be considered another solution. Tese so-called e-fuels are produced by reacting hydrogen from electrolysis with carbon dioxide taken from the atmosphere or emission sources. Combustion of e-fuels in conventional ICEs cannot match the superior technical properties of electric drives, and at the same time, they lose a large amount of energy. Terefore, the cost of providing them is extremely high (see Fig. 8.7). While aviation relies on e-fuels to reduce its carbon footprint, these fuels are not currently expected to be relevant for road vehicles in the long term. Exceptions include niche applications, such as racing or vintage cars. For example, Formula 1 will use e-fuels in its hybrid cars beginning in 2026 (Barretto, 2022).

Te difcult-to-understand technical characteristics and potentials, the complex factors infuencing the performance data, the costs, and, in particular, the environmental compatibility are very difcult to compare objectively among drivetrain choices, even by proven experts (Weigelt, 2022). As a result, despite the clear predominance of electric drivetrains, traditional customers still seem to feel daunted when faced with the necessary change in attitude, and they continue to cling to familiar ICE cars, as refected in the number of registrations and the fact that governments have to set targets for the number of electric vehicle registrations (Association des Constructeurs Européens d'Automobiles, 2022; Bundesministerium für Umwelt, Naturschutz, nukleare Sicherheit und Verbraucherschutz [BMUV] 2021; Bundesministerium für Wirtschaft und Klimaschutz [BMWK] 2023). Terefore, one of the major challenges is to increase customer acceptance by demonstrating technological reliability.

Mobility must always be considered holistically. In addition to the vehicle and its drivetrain, this includes the infrastructure and the established energy ecosystem, which vary greatly from country to country. Tese aspects also have a major impact on the overall efciency and the ecological footprint of the various drive concepts. In the case of electromobility, for example, these are technological disruptions in cell chemistry, the charging infrastructure, and the closing of material cycles for battery raw materials. For hydrogen and synthetic fuels, these include the production and eco-efcient transportation of green hydrogen or synthetic fuels. Unfortunately, this situation challenges incumbent car manufacturers to manage the uncertainties surrounding emerging technologies, while new entrants seize the opportunity to focus on new technologies.

After this brief introduction and comparison of alternative drivetrains, the following two dialogues between experts from research and practice will address the current challenges and opportunities for the future of the drivetrain and the potential of hydrogen in the automotive context.

# **8.3 Expert Conversation on the Future of Mobility**

# **What is the History of Electric Vehicles at BMW and Where Do You Stand Today?**

*Franke:* It is a real honor and a great pleasure for me to talk with you about the future of mobility. Te future of mobility, especially automotive mobility, for me is summed up in the four letters C, A, S, E, which stand for connected, autonomous, shared—I personally would redefne it as sustainable—and, of course, electric driving. Tis was the mantra when BMW decided, 10 years ago, to design and produce a fully electric car, the BMW i3. I drive an i3 as well.

*Zipse:* Do you? I hope you enjoy driving it.

*Franke:* It is still an excellent car, even though it is about 10 years old. It is fully purpose-designed for electric driving, although it started with a small range extender to overcome the range anxiety. Tis range extender has disappeared, and now BMW has changed its strategy a bit. As far as I can see from the outside, BMW's strategy now is to ofer all drivetrain alternatives in every model series. However, fully purpose-designed electric cars would potentially outperform BMW models in terms of better integration, cable harness, compartment design, maybe even efciency and costs. How will BMW overcome these potential disadvantages?

*Zipse:* Tank you very much for that really strategic question. What you call CASE, we call ACES, but it means the same thing: autonomous, connected, electric, and shared. In terms of electric cars, which is what we are talking about here, we have not changed our strategy. We have evolved it into the future. We built the frst electric car in 2008: an all-electric Mini. It was not for public use, but there was an electric Mini in existence. Tere was also an electric 2-Series, you know. We experimented with that, and then, we fnally made the decision, "Let's build an electric car." At the time, we called it the Megacity Vehicle. It later evolved into the i3. We also said, more or less, this can be an experimental feld for car body design, as we had to reduce the weight to increase the range of the car. Te i3 became a carbon car because of the lightweight constraints. It is still the only highvolume carbon car in the world to this very day. Tere is no other manufacturer that has built a car like this.

*Franke:* What has happened since then?

*Zipse:* Back then, we were working with the third generation of our battery technology. Now we are in our ffth generation. Back then, we knew—and in the automotive industry you have to look years ahead—that electromobility was coming. Up until then, there was no mandatory use of electric mobility. Tere was not enough infrastructure, and there was no customer commitment to buy these cars. But because we saw that this was going to happen because of the carbon regulation that was coming, frst in the United States and then in Europe, and then also in China, we made a bold move, a very early move. We changed our strategy at that time, not afterward; that is the misconception. We took the change that was coming very seriously. Ten, we waited a year and a half, until about 2014, to see how the i3 was doing. We saw competitors coming up and making plans. So, we said, "OK, let's get serious now!" Ten, after the i3 experience, we took a very consequent step of electrifying our main architectures. Tese are not conversion products, but are built on fexible architectures. Tis took 4 to 5 years, while the outside world had the impression that we had stopped doing electrifcation, which is not true at all. We prepared for the point in time when electromobility really would take of. Tat time is now: Te iX3 was our frst fully electric car after the i3; the iX is the second car. Tere was a test in Auto Motor Sport the other day, and they tested six fully electric vehicles—purpose-designed vehicles. Other than the iX3, there were vehicles from our German friends, Japanese manufacturers, and so on. Tey were all there. Te iX3, which is built on a fexible architecture, not on a purpose-built architecture, came out on top by a wide margin. First prize!

# **What Is the Strategy for the Electric Drivetrain?**

*Franke:* Let us take a closer look at the electric drivetrain. As a production engineer, I am impressed by how BMW designs and builds not only combustion engines, but also electric motors. But as a production engineer who focuses on the production of electric motors, I also know that the drivetrain is made up of not only electric motors, but also batteries and power electronics, and of course, it is integrated in a charging network. How will BMW diferentiate itself in the future in the other modules of the drivetrain?

example. What modules will BMW produce in the future to claim this as a core competence and diferentiate itself from its competitors?

Te second thing is the speed of development. You increase your development speed when you have more than one supplier. In 2019, we built our own research and development (R&D) center here, where we developed our own competencies. Tere are more than 2000 parameters in the cell. Te right combination determines the performance of the cell. Now comes the interesting part. What happens with a lithium-ion cell? First, you try to optimize the cathode by increasing its performance.  But what happens if you increase the energy density on the cathode? You have to change the anode as well. You go away from graphite to silicon–graphite or something like that. Once you have that, the third step is the performance of your electrolyte, and then, the fourth step, which we may do in this decade, is to go from a liquid electrolyte to a solid electrolyte.

diferent technology. Tere is a big diference between a fuid electrolyte and a solid electrolyte.

Why are we investing? Because there are many competitors out there, and they are extremely competent. We can build up partnerships, as for our business model. It is much better to use the market than to invest in developing specifc technologies ourselves. We invest wherever we have an integration task, where all the technologies come together in the car. We refer to this as HEAT, which stands for the German acronym "Hochintegrierte Elektrische AntriebsTechnik" (meaning Highly Integrated Electric Drivetrain), a combination of the electric drivetrain and the clutch end zone.

Te assumption that in-house production gives you a higher competence is simply wrong. Our experience is very diferent. You build up your own competence when you operate in a monopoly situation. Take press shops, for example. Building those up is very difcult, a super high investment: One costs 100 million euros. Tere are not many market players out there who build press shops. It is not high-tech, but you have a very clear oligopoly situation—and you are completely dependent on press shops. It is a simple technology, and it makes sense to invest in ourselves.

Tat is the situation we have. Of course, in our purchasing department, we always look at the market situation. If we cannot increase our speed and we do not have a shortage of supplies out there, we rather tend to buy.

# **What Does the Future of Mobility Look Like?**

*Franke:* So you are not afraid of Google or Apple?

*Zipse:* Te companies you mentioned are not building cars. Tey build technology. Inside the automotive sector, they are not making any money. So the question is: When do you, as a car producer, make specifc investments without looking at the contribution margin? It is quite simple: When we bring a car to the market, the cost has to be lower than the price needed to make a positive contribution margin. None of these companies think about contribution margins. What will happen, at least for the next 10 years? We will be at the forefront of assisted driving that goes to a Level 2+ with driver supervision in Germany—which is hands-free, by the way.

People think that only Level 3 is hands-free, but this is not true. You, as the driver, are monitored to see if you are still looking forward, and if you are not, the car will ask you to take over control. Level 3 is completely hands-free, but that is highly restricted around the world. To ofer Level 3, you need radar, lidar, and optical sensors like a camera—we are absolutely sure of that. You cannot do Level 3 with cameras alone. But a lidar sensor in a car is very expensive.

#### **What Is the Role of Connectivity?**

*Franke:* I have to touch on at least one last question. We talked about electromobility and autonomous driving, but I think connectivity toward the customer and toward infrastructure is also very important. Modern cars are already connected to the Internet through mobile communications technology, telephone, web conferencing, updated maps with up-to-the-minute congestion information, music, video, entertainment services, and Netfix—you name it. Everything is available in the car.

Equally important is the constant connection of electric cars to the smart energy grid. Dynamic inductive power transfer technology, which means recharging the car while driving it and promises infnite range. Connectivity supports autonomous and convoy driving, stabilizes the electricity grid, and ofers new services for individual mobility, such as tolls without pay stations, navigation, fast Internet communication, and so on and so forth. Tis technology is never discussed. We all talk about batteries and hydrogen, but no one talks about inductive power transfer while the car is moving. How can BMW take advantage of this promising technology?

we will prepare the infrastructure with IPT, inductive power transfer. Could this be a new business model for BMW?

# **8.4 Expert Conversation on H2 as Fuel of the Future**

#### **What Is the Importance of the Hydrogen Strategy?**

*Wasserscheid:* I am really excited to be here and to discuss with you the topic of hydrogen as a future fuel. It seems to me that hydrogen is a very dynamic feld at the moment. A lot of scientists, companies, and even politicians have recognized that this fully defossilized energy system that we want to have in 2045 can only work if we have storable energy carriers. Te time has come: People are developing hydrogen strategies everywhere. Tere is a Bavarian hydrogen strategy, there is a German hydrogen strategy, there is a European hydrogen strategy, and my frst question is: What about a BMW hydrogen strategy?

point is: If you have hydrogen as a transport vector to Germany, the efciency discussion is completely diferent, because it makes no sense to convert the hydrogen into electricity to charge the battery in your car. It is better to use this hydrogen immediately and directly in mobility, of course frst in sectors where batteries have problems (e.g., trucks).

Would you say that we have enough electricity in Germany? Because this is not about Germany, is it? Climate change is global. Tere are places where it is much easier and more economical to generate renewable energy than here in Germany.

*Zipse:* Right. We have a global perspective on hydrogen. Tis is important because only about 8% of our worldwide revenue is generated in Germany. So, we have to look beyond the German hydrogen discourse. And if you take a global perspective, you see many use cases where access to electromobility is lacking. From our point of view, the only emission-free possibility for private passenger cars, apart from battery electric vehicles (BEVs), is fuel cell electric vehicles (FCEVs) that run on hydrogen. Tere will be plenty of cases where people will not have access to charging infrastructure/ electricity. So, hydrogen is a perfect complement to our overall strategy. It obviously does not mean that we are undecided. On the contrary, we are determined because we are not in a shrinking scenario. We do not see hydrogen as a shrinking scenario. Because we produce almost 3 million cars per year, we can aford to have three or four diferent drivetrains, especially because our whole mindset is about architectures and not around platforms. Tat is the perfect strategy for us. Tat is the way forward.

#### **What Will a Hydrogen Car Look Like and What Is Its Advantage?**

*Wasserscheid:* It is a disruptive technological change to move from fossil to renewable technologies.  *Guldner:* We just have completed the development of our second generation of fuel cell technology and integrated it into the X5, one of our bestselling models. A small pilot feet of BMW iX5 hydrogen vehicles is currently used worldwide for testing and demonstration purposes—very successfully. Ten, we will move on to the next development steps, and customer cars will be ready when the markets are ready for them. Diferent countries move at a diferent speeds, and we will see when the right point of time comes, probably before the end of this decade.

*Wasserscheid:* I drive a hydrogen car myself, as a private car, a Hyundai NEXO, and I am really waiting for the BMW. Do not forget me! I am your frst customer!

*Guldner:* We will call you, and you can come for a test-drive soon (laughs).

*Wasserscheid:* Perfect! And the experience is that this is a nice way of driving, especially for long distances, because even though the network of fueling stations is still quite thin, it is basically enough if you drive long distances. You pass a flling station every 50 km. Tat is more than enough.

Let us go into the future, into the year 2045, when Germany is supposed to have zero emissions, according to the new climate laws.

What will be the ratio between battery electric and hydrogen electric then? Because my feeling is that batteries are moving fast today because you already have the scale and the mass production efect. In the hydrogen business, the situation is still diferent. To give an example, if you want to get a cheap fuel cell today, then the best thing is to buy a NEXO or a Mirai, take the fuel cell out, and throw the rest away. Te reason is that fuel cell production has yet to be scaled up. What is your outlook for 2045? Let us just assume that, by then, technology development is in the mass market for all technologies, and it is really an established market for both technologies.

*Zipse:* Te question is, which parameter, which vector do you believe in? Do you think that the people are afraid of too long charging times in electromobility—even in the very best case, it will be longer than at a gas station. People might not want to stand in the dark and wait 10 min. Tey want to refuel quickly and then go. We do not know that. I think the main driver for hydrogen will come from settings in which you have to drive emissionfree and you do not have a charging station. Tat is the main driver. It is not range or anything like that. It is not even the cost. For example, if we say that we want €5 per kilogram of hydrogen, and that would be the point at which it becomes competitive. It is also when countries, through legislation, no longer allow greenhouse gas emissions from cars—and there will be many in 2040. Not all, but a lot. What happens if you cannot charge all these electric cars?—Te issue is not the availability of battery electric cars, but the availability of charging stations.

*Wasserscheid:* What kind of example do you have in mind?

*Zipse:* What will you do in rural areas? In densely populated areas, like most of Germany, you can provide enough charging interfaces. When you build new houses, you build in charging facilities. You can do that in cities or in the countryside. But in a very scenic, unspoiled environment, where nature is dominant, you cannot tear up all the roads and build a massive amount of charging infrastructure. You will get a massive political problem. What do you do there? But remember, by 2040, we want to drive emission-free. So, either you stop driving cars to those places, which is one option. Or you have a hydrogen car.

#### **What Is the Technology Strategy Behind Hydrogen?**

*Wasserscheid:* Let me dive a little deeper into the technology strategy. Hydrogen is a brand-new technology; it is disruptive. What is the value chain? And who will be involved with what kind of service and with what kind of product? I guess that this is also a strategic decision for BMW. When and where do we form alliances with other OEMs for fuel cells—I know about your collaboration with Toyota—or do we source in from classical suppliers like Bosch, Schaefer, and so on, who fortunately are also quite active in the hydrogen business? I think it is very encouraging that German companies are recognizing that this kind of business fts very well with what they know, maybe diferent from making batteries. What is the strategic decision for BMW to have a Unique selling proposition in the hydrogen race, but also to have its own product portfolio within this powertrain of the future?

*Zipse:* We already touched on this point before with the batteries. I think that in-house competence in all areas is overrated. System integration competence is the most important thing you need to have. Ten, you have to have a very strong ability to cooperate. If you have strong partners out there and we do have partners who have been cooperating with us for many years—then you do not need to have all competencies in-house unless you have an extremely unique technology, which is not the case here. I am sure that with all these hydrogen drivers, there will be a thriving supplier market. Tere will not be just one fuel cell supplier. Te important thing to remember is that the integration possibilities—because we already have an electric drivetrain—are quite simple. At the end of the day, a hydrogen car is more or less an electric car. Our car architectures are designed so that BEVs and FCEVs have a high degree of synergy. Tis is crucial for our electric strategy.

We have a long-standing relationship with Toyota that we are very happy with. Once we decide on a series model, we have to look at who is the best supplier or the best partner. Regarding a make-or-buy decision, it is not always true that the in-house made decision is the optimal choice. It can be right, but most of the time it is not, because you lose a lot of fexibility.

*Wasserscheid:* Tis discussion goes even deeper if you think about the whole hydrogen value chain, with green hydrogen production, hydrogen logistics, fuel cells as one way of hydrogen utilization, and the aspect of industrialization and scaling. People sometimes ask me, "Oh, hydrogen has been around for 100 years! Why is it not there yet?" Te main problem is this relatively complex value chain: You have to fnd suppliers and partners—and that is not easy at the beginning. For example, there are diferent technologies for on-board storage: compressed, cryo-compressed, liquid, and all of that. It is important that the frst movers—Toyota and Hyundai are excellent examples—are able and willing to cover parts of that value chain themselves. Otherwise, the technology will not begin to move.

*Zipse:* Do you see that change happening yet?

*Wasserscheid:* I am convinced that we will now build this value chain. We see this in the Bavarian Hydrogen Centre. Tere are companies that do electrolysis, like Siemens Energy; companies that do diferent kinds of hydrogen logistics, like Hydrogenious LOHC Technologies; and companies that do fuel cells or fuel cell components, like Bosch and Schaefer. When all these elements come together, the chain will work. What about your willingness as BMW to contribute your part to building these value chains? Is it just to say, "I have to buy this, this, and that, and then I will prepare a car"? Or is it, "I believe in this technology, so I want to be this kind of enabler like Hyundai or Toyota"? We've seen the Toyota cars at the Olympics—they really have a mission on hydrogen. Is the same true for BMW?

#### **What Is the Impact of Hydrogen Technology on Climate Goals?**

*Wasserscheid:* When we talk about defossilization, green products, and a low carbon footprint, we also have to consider the production process for cars. In Spartanburg, I think you were the frst company to show that hydrogen mobility can be very helpful in reducing the carbon footprint of your production by using hydrogen-powered forklifts. To what level can you extend that experience? And to what level do you think that competitors and other companies that move goods from Point A to Point B would adopt this kind of technology?

But, to give some examples, we see that diesel is not dead—far from it. In Europe alone, one in fve customers still buys a diesel car. It is a thriving market. Te petrol engine is still there, also the hybrid: We are the world's largest producer of hybrids among all OEMs. Tis is a fourishing segment for us, despite all the public discussion. Pure electric cars have also grown steadily in recent years. So all four drivetrains are very proftable. Te question is: Will hydrogen be the ffth drivetrain, or will it be another technology? It does not matter—as long as you have thought about the possibility and put it into architectures. Tat is what we have done and what we are doing. So far, that strategy has been absolutely right, because in terms of the overarching strategy, we know that if a company of this size does not grow, it will run into problems. So we have to grow, and the lever is technology openness.

#### **What Are the Limiting Resources of the Hydrogen Business?**

when does scarcity become an economic argument for survival? Tat is why we have defned the principle of "secondary material frst" as one of the main pillars, at least for the next 10 years. Because humanity is extracting about 100 trillion tons of ores and resources from the planet. Ten you ask people, "How long will that continue?" One thing is for sure. Most resources are fnite. You can still use them, but they will become more expensive. Palladium, rhodium,… even steel are getting more expensive. So, it makes economic sense to put secondary materials frst, at least as a cornerstone of your strategy. I think that is a wise decision.

*Wasserscheid:* Yes, it helps that platinum is so valuable and people have already developed processes to refne and recycle it. Plus, the quantities that are used in fuel cells and hydrogen release units are small.

Tat brings me to my last question: Tere is one resource that may also be limited. And that is brains. Right? (All laugh and nod.) For all that we have discussed, you need people. People with a diferent mindset. If you are trained as a person with gasoline in your blood, you are quite likely to fail in this electric world. Or maybe not? So the question is: How do you manage the talent pipeline or attract experts in technologies like batteries, hydrogen, and all these electrifed mobility technologies? And how does that change the way a company like BMW is going to operate in the future?

 But much more important than the limited brain is the mindset. We fnd a strong source of power in trying to get the right mindset. We did not fnd such a big diference between the diferent drivetrains. An electric car is not that diferent from an internal combustion car. All of the electrics—apart from the battery—are very "mechanical." We move people who work in the internal combustion engine plant to the Dingolfng plant. It is almost the same skill set. And it is not that diferent. What stays the same is the continuous progress in every technology. Take digitalization, which in principle is not new to us, but every year something new comes along. Putting the right digital solutions into a car and making a proftable business model out of it, that is the most important question. At the end of the day, your product has to be unique, proftable, and attractive. Tat is not just a question of qualifcation or whether we have enough digitalization. It is a question of mindset. Tis is what we are trying to get the whole company to do, that everyone is part of a larger system that pays into a business model. If you have that mindset, you will get enough brains that want to contribute.

*Wasserscheid:* I think one important way to achieve this is close cooperation and interaction between universities and BMW, as in our very exciting discussion today. Many thanks for that!

# **8.5 Beyond Technical Functionality: The Energy Ecosystem around Eco-Effcient Drivetrain Solutions**

As shown in the previous sections, diferent technologies compete in the area of individual mobility for diferent target groups and markets. While some technologies compete directly with each other, others complement each other for diferent applications and sectors. In this context, technology openness is a key to achieving climate neutrality. In Europe, e-mobility is expected to dominate the mass consumer market in the future. In other areas, such as heavy-duty transportation, it is not yet clear which drive solution will prevail in the long term. All solutions require massive research eforts in various felds to advance the respective technological maturity level.

Te associated technological change requires close cooperation between industry (OEMs and suppliers), research, and politics (international and national). At the same time, consumer acceptance must be promoted. Te application potential and user acceptance of alternative drivetrains depend to a large extent on the infrastructure and the energy ecosystem. Future practice and research avenues must therefore focus on these two aspects.

In the feld of energy ecosystems, three potential future paths for eco-efcient mobile and stationary energy storage are discussed below. Due to the close interaction of new drive technologies with the associated infrastructure, disruptive energy distribution systems in the automotive context are also presented.

#### **8.5.1 Eco-Effcient Storage of Electric Energy on Board an Automobile**

Te present status and success of battery electric vehicles is closely linked to a specifc battery technology—the Li-ion technology. Te reason is the outstanding energy and power density of the Li-ion technology compared with other material combinations (see Fig. 8.8).

Several inventions have been necessary to make Li-ion cells work. In 2019, the pioneering work of John B. Goodenough, M. Stanley Whittingham, and Akira Yoshino conducted in the second half of the last century has been

**Fig. 8.8** Ragone diagram showing specifc energy and power densities of different battery technologies (Note: Status as of 2013 on cell level—today Li-ion expand further to the right; "Ragone plot of various battery technologies with specifcation at cell level for automotive applications without lithium–sulphur and metal–air batteries." originally published in Budde-Meiwes et al. (2013). Proceedings of the Institution of Mechanical Engineers, Part D: Journal of Automobile Engineering, 227(5), 761–776. https://doi. org/10.1177/0954407013485567; all rights reserved.) (Budde-Meiwes et al., 2013)

honored by the Nobel prize. And it was the need for higher battery capacity for the new consumer electronic devices, like the camcorder, which motivated Sony in the late 1980s to industrialize the Li-ion technology.

Te working principle and the subsequent steps to build a Li-ion cell from the incoming materials (powders, solvents, conducting foils, separator, electrolyte, and cell housing) to the fnal cell is shown in Fig. 8.9. Te key materials are the active anode and cathode materials being able to store Li-ions in its inner structure. While graphite is the predominant material for the anode for all applications, the choice of the cathode material (typically a lithium metal oxide) strongly depends on the application and the requirements.

For example, the key performance indicators (KPIs) for automotive applications difer substantially from those of the consumer electronics leading to diferent solutions. While the lithium–cobalt oxide (LCO) cathode material is used in consumer electronics, LCO is not suitable for automotive

**Fig. 8.9** Overview of the working principle of a Li-ion battery cell, the typical set of materials and the typical realization from materials to electrodes and fnally to cells (pouch, cylindrical, or prismatic hard case)

applications due to cost and safety reasons. Te predominant cathode material in battery cells for electric vehicles today is the lithium–nickel–manganese–cobalt oxide (NMC) chemistry (a layered oxide structure).

Ten years ago, the material composition was the so-called NMC111 (i.e., equal amounts of nickel, cobalt, and manganese [33% of each]). In the future development, the nickel content was continuously increased to 80% in today's so-called NMC811 material (80% Ni, 10% manganese, and 10% cobalt). Te beneft is a substantial increase of the specifc capacity of the material from about 150 mAh/g (NMC111) to about 210 mAh/g (NMC811). Te drawback is that those high-performance materials are thermally less stable, leading to challenges for lifetime and/or safety.

As shown in Fig. 8.9, the active layers of a cell (multiple electrode and separator layers arranged in a stack or jelly roll) can be integrated in diferent mechanical cell housings. Tose are pouch cells, cylindrical cells, and prismatic hard case cells. Each of those has individual weaknesses and strengths, and those are all used in automotive applications.

**Pouch cells:** Te housing consists of a thin composite foil (polymer with an alumina layer in between). Te sealing is done by a lamination process. Te advantage is its lightweight and high degree of freedom in realizing different form factors (only cell thickness is limited). Te disadvantage is the possible difusion through the laminate seal and the low mechanical robustness.

**Cylindrical cell:** Te housing is mainly steel but could also be alumina. Te integration of a cylindrically wound jelly roll gives the best volumetric energy density. Sealing is done by crimping (risk of difusion but lower than for a pouch) or laser seal. Te advantages are the mechanical robustness and constant shape even when pressure builds up inside the cell. Te disadvantage is the limitation of the cell size (production process, thermal management, etc.).

**Prismatic hard case cell:** Te housing is a prismatic alumina can. Sealing is done by laser welding. Te advantages are the mechanical robustness and long lifetime, and it can be easily used in highly automated production process to manufacture modules and packs.

Te battery cell (i.e., the chemistry used) and the mechanical cell concept is responsible for the electric vehicle's core properties of range, driving performance, and charging time. BMW has focused on the prismatic hard case cell as the building block for its battery architecture. Te reasons are the mechanical rigidness, the longevity, and the suitability for high-volume and high-quality production of modules and battery packs. BMW has optimized this type of battery over fve generations, and it now successfully powers our present feet of battery electric vehicles (see Fig. 8.10).

In the sixth generation of BMW eDrive technology utilized in the NEUE KLASSE, signifcant advancements have been made in the cell format and chemistry. Te introduction of the new BMW round cell, purpose-built for the electric architecture of NEUE KLASSE models, allows for a remarkable increase in the range of the highest range model, up to 30% (according to WLTP) (BMW Group, 2022; see Fig. 8.11).

Deviating from the ffth-generation prismatic cells, the sixth-generation BMW round cells difer in an increased nickel content on the cathode side. Tis allows the cobalt content to be reduced. In addition, a notable increase in the silicon content on the anode side contributes to a signifcant increase in the volumetric energy density of the cell of more than 20% (BMW Group, 2022).

**Fig. 8.10** BMW's Gen5 battery cell, module, and pack architecture

**Fig. 8.11** BMW's Gen6 battery cell and pack architecture and the resulting improvements of some relevant KPIs (the reference is the present Gen5 battery pack architecture)

In the NEUE KLASSE, the battery system is critical because, depending on the model, it ofers fexible integration into the installation space to save space through a "pack to open body" approach that eliminates the cell module level (BMW Group, 2022; see Fig. 8.11).

Moreover, the NEUE KLASSE's battery, drivetrain, and charging technology will operate at a higher voltage of 800 V. Tis enhancement optimizes energy supply from direct current high-power charging stations, enabling a much higher charging capacity of up to 500 A. As a result, it will take up to 30% less time to charge the battery from 10% to 80% (BMW Group, 2022; see Fig. 8.11).

Te BMW Group places strong emphasis on reducing the carbon footprint and resource consumption throughout the production process, starting from the supply chain. To achieve this, cell manufacturers will use lithium, nickel, and cobalt, incorporating proportions of secondary material, that is, raw materials that already exist in the material loop and are not newly mined. In addition, the BMW Group is committed to using only green electricity from renewable sources for battery cell production. Both of these advances are expected to reduce the carbon footprint associated with producing battery cells by up to 60% compared with the current generation (BMW Group, 2022).

Emphasizing the importance of a circular economy in e-mobility, the BMW Group aims to reuse raw materials. Circular loops signifcantly diminish the demand for new raw materials, reduce the risk of environmental and social standard violations in the supply chain, and lead to substantially lower CO2 emissions. Te BMW Group's active involvement in all stages of a circular battery economy (see Fig. 8.12) underscores their commitment to this approach. Ultimately, the long-term objective is to adopt fully recyclable battery cells (BMW Group, 2022).

For the new generation of BMW battery cells, the raw materials cobalt and lithium will be sourced from certifed mines, ensuring transparency over extraction methods and promoting responsible mining practices. Te

**Fig. 8.12** BMW's circular battery value chain

sourcing is carried out either directly through the BMW Group or via the battery cell manufacturer (BMW Group, 2022).

For numerous years, the BMW Group has actively participated in initiatives aimed at establishing standards for responsible raw material extraction and advocating compliance with environmental and social norms through mine certifcation. Tis approach not only exemplifes the company's commitment to sustainable business practices but also reduces its dependence on certain resources and suppliers from a technological, geographical, and geopolitical perspective.

For an OEM, the continuous further development of battery systems is mandatory. In the past, the main driver for battery cell development was to increase energy density and hence range of the battery electric vehicle. With the NEUE KLASSE, driving ranges of up to 900 km, depending on the specifc vehicle, will be reached. In principle, ranges above 1000 km are technically possible but are, in most cases, neither economical nor ecologically reasonable. It is more important to develop and deliver a product optimized along all relevant KPIs and the needs of the customer. Hence, future battery cell development will diversify and be directed to diferent areas of the car portfolio (see Fig. 8.13). Tis will be: a) still the optimization of energy density ("range-optimized"), but equally important, b) the best ft between energy density and cost ("cost-optimized"), and c) the low cost sector for entry models ("low-cost").

**Fig. 8.13** Future diversifed development directions for battery cell technology

Since 2008, the BMW Group has been progressively cultivating its expertise in battery cell technology. Tis expertise has been consolidated at the BMW Group's Battery Cell Competence Centre (BCCC) in Munich since 2019. Encompassing the entire value chain, from R&D to battery cell design and manufacturability, the BCCC serves as a hub for translating cutting-edge battery cell innovations into practical applications swiftly and efectively. To this end, the BMW Group collaborates with a diverse network of approximately 300 partners, including established companies, start-ups, and research institutions. Te insights acquired through these collaborations undergo validation at the Cell Manufacturing Competence Centre (CMCC) located near Munich in Parsdorf (BMW Group, 2022).

Tis competence and continuous efort are needed to ensure that the best possible and most eco-efcient battery technology is ofered to the customer.

### **8.5.2 Eco-Effcient Hydrogen Storage and On-Demand Electrifcation**

Energy from renewable sources enables a climate-friendly supply of electricity, heat, and alternative fuels. However, due to the volatile nature of renewable energy sources, technologies are urgently needed to make renewable energy storable, transportable, and globally tradable to link privileged production sites with centers of consumption. One solution is energy storage in the form of hydrogen, which can be produced by electrolysis of water with renewable energy. If the energy stored this way is needed again, the hydrogen can be used to generate electric energy in a fuel cell, with water vapor as the only additional product. In this way, a CO2-free energy system can be established.

In the future of defossilized and fully emission-free energy systems, hydrogen technologies will play a very important role. Tey will provide solutions for applications where battery technologies cannot be used for reasons of cost and practicality. Tis applies, in particular, to the following areas:

One challenge, however, is that elemental hydrogen (H2) has only a very low energy density at ambient conditions. For storage and transport, hydrogen is therefore stored as a gas under high pressures of up to 700 bar or liquefed at temperatures below minus 250 °C (Preuster et al., 2017). Concerning the transportation of hydrogen, leveraging established fossil fuel infrastructure—specifcally, natural gas pipelines—ofers noticeable advantages. Utilizing existing infrastructure proves to be more cost-efective and resourceefcient (U.S. Department of Energy, 2023). However, while blending hydrogen into natural gas to transport a gas mixture is comparatively feasible for modest of proportions of hydrogen, converting the gas grid to distribute only hydrogen presents more complex technical, legal, and policy-based challenges (Jayanti, 2022). Furthermore, on an international scale, hydrogen transportation approaches that rely on molecular hydrogen demand the construction of new, considerably expensive infrastructure. Given this context, researchers are exploring alternative methods for hydrogen transportation that extend beyond merely repurposing existing pipelines. Current research and development work at FAU is therefore aimed at establishing innovative hydrogen storage and logistics approaches that are highly compatible with the existing infrastructure for the currently utilized fuels. Tis infrastructure compatibility ofers the chance for a much faster introduction of hydrogen-based clean energy technologies on a system-relevant and global scale.

To realize this compatibility with existing energy infrastructures, the elemental gaseous hydrogen is bound to a carrier molecule in a heat-producing hydrogenation reaction. Tis creates a hydrogen-rich form of the storage system, the loaded storage compound, which can be easily stored and transported in a liquid or liquefed form. On demand, elemental hydrogen can be released from the charged storage compound in a reverse, heat-consuming dehydrogenation reaction. In this process, the discharged storage material is formed again and can be used for another hydrogen storage cycle. Reaction accelerators, the so-called catalysts, play a decisive role in the described storage and release reactions. Tey accelerate the rates of reaction and ensure that the desired hydrogenation and dehydrogenation reactions take place with the highest possible selectivity.

A technically very promising example of this approach is the so-called liquid organic hydrogen carrier (LOHC) technology, in which molecular hydrogen is reversibly bound to an aromatic liquid compound (Preuster et al., 2017). Research contributions of the FAU in the last decade have shown that the aromatic compound benzyltoluene is particularly suitable as hydrogenlean storage compound (Jorschick et al., 2017; Rüde et al., 2022). Benzyltoluene is a readily available industrial product and has been applied since the 1960s as heat transfer oil. Many properties of the compound are known and very well suitable for its application in hydrogen storage, such as its high thermal stability and the high intrinsic safety of the compound. Based on this LOHC system, FAU researchers have developed a hydrogen storage and transport technology that has been commercialized in the meantime by the FAU spin-of Hydrogenious LOHC Technologies GmbH (www.hydrogenious.net). Since its foundation in 2013, Hydrogenious has developed into a global technology leader for hydrogen storage using LOHC technologies and today has 200 employees.

Interesting alternatives in the feld of chemical hydrogen storage include the reversible chemical binding of hydrogen to the gases CO2 or N2, which also leads to liquid (methanol and diesel) (Artz et al., 2018) or liquefable (ammonia and dimethyl ether) (Schüth et al., 2012) hydrogen-rich storage compounds. Tese compounds can be split on demand to produce hydrogen or used directly as chemicals or as climate-neutral combustion fuels (see Fig. 8.14).

An important diference between these CO2/N2 concepts and the LOHC technology is that LOHC-released hydrogen is of sufcient quality for reelectrifcation in a fuel cell after condensation of the liquid carrier. By contrast, splitting ammonia, methanol, or dimethyl ether for hydrogen production

**Fig. 8.14** Illustration of the working principle of chemical hydrogen storage

leads to gas mixtures of hydrogen and nitrogen or carbon dioxide, respectively. Tese mixtures have to be separated to obtain pure hydrogen for fuel cell operation. While the LOHC carrier compounds are transported in the hydrogen-rich state from the energy-rich location to the energy consumer and in the hydrogen-lean state back for recharging, the equivalent storage cycle is typically closed for CO2- or N2-based hydrogen storage technologies via the atmosphere. At the energy-rich location, CO2 or N2 is extracted from the atmosphere, and the same compounds are released to the atmosphere after hydrogen splitting and separation at the energy consumption site.

Overall, the technologies for chemical energy storage, and for the LOHC technology in particular, ofer clear advantages over batteries and physical storage of elemental hydrogen if the stationary energy storage of large amounts of energy, global energy transport, and emission-free heavy-duty mobility are the focus. Chemical hydrogen storage can be realized at ambient temperature and ambient or low pressure to provide very high energy densities. Since the loaded storage material can be easily handled like today's fuel, the existing infrastructure for liquid energy carriers (tankers, tank wagons, and tank farms), which is accepted by the population and has proven itself over many decades, can be further used. Tere is no need to build expensive new supply infrastructure, nor does the hydrogen require complex cooling or compression. Most interestingly, these chemical hydrogen storage technologies are exportable and can also be used in countries whose gas and electricity distribution infrastructure has so far been poorly developed (Hank et al., 2020).

#### **8.5.3 Eco-Effcient Electricity Distribution via an Electrifed Road Infrastructure**

Te glaring disadvantage of the limited storage capacity and charging capacity of batteries cannot be overcome in the short term. Another major challenge at present is the expansion of the charging infrastructure. According to statistics from the German Federal Network Agency, there were 63,806 normal charging points and 12,755 fast charging points in Germany as of December 01, 2022 (Bundesnetzagentur, 2023). Te German government plans to increase this number to 1 million publicly accessible charging points by 2030 (Bundesministerium für Digitales und Verkehr [BMDV], 2022). Te European Union plans to install one charging station every 60 km along major trafc routes (European Parliament, 2022). Te deployment of bidirectional charging and smart grids will create further synergies.

Other technologies can complement this strategy. For example, instead of storing energy in massive batteries and carrying them in the car, electric energy can be transferred directly from electrifed roads to parked and even moving electric cars. Inductive power transfer (IPT) automatically starts the charging process when the vehicle is parked over a charging coil. By installing this technology on long-distance roads, the energy needed to drive can be provided continuously, the concentrated grid load caused by ultra-fast charging is reduced, and the size of the batteries can be signifcantly reduced. As a result, electric cars can become lighter and less expensive, and even heavy trucks can be driven electrically, efciently, and with zero emissions for an unlimited driving range without additional recharging. Conversely, by eliminating the need to recharge at rest stops, the investment requirement for the immensely expensive fast-charging columns is decreased, the space required for charging cars is reduced, and travelers no longer waste time recharging their batteries on long-distance trips.

Again, after BMW introduced the i3 as the frst purpose-designed electric car in Germany, with the plug-in-hybrid 530e, BMW was the frst car company to bring wireless power transfer to the market in series production.

Te primary coils (see Fig. 8.15), consisting of concentrically wound copper strands, are installed under the road surface in parking lots or on roads at intervals of about 1 m. A magnetic feld pulsed at 85 kHz excites an electric voltage in the secondary coils, which are mounted on the underbody of the vehicles. More than 20 kW of power can be transmitted per coil, which is sufcient even at high speeds and under normal conditions for propulsion and simultaneous battery charging. Higher power requirements, such as for

**Fig. 8.15** Inductive charging is based on resonant magnetic fux coupling (own illustration based on Loisel et al. (2014)) trucks and buses, can be met by installing multiple secondary coils. With a precisely tuned oscillating circuit and excellent primary and secondary coil qualities, energy transfer efciencies of over 90% can be achieved, even surpassing the efciency of previous high-performance conductive energy transfers, since the additional electrochemical energy conversions in and out of the battery can be eliminated.

Since the magnetic felds of the primary coils are basically harmless to living beings and are only activated when a secondary coil system is coupled, the road trafc infrastructure can be electrifed without hesitation. However, it will be necessary to educate the public in order to dispel any reservations they may have. Te automatic identifcation of vehicles in the energy system, comparable to the registration of a cell phone in the mobile network, makes the payment process more convenient. Te permanent connection of electric vehicles to the smart grid while parking and driving enables the use of vehicle batteries for an efective stabilization of the energy grid (vehicle-to-grid). Even if only half of all German cars were to be converted to electric drives, about one terawatt-hour (TWh) of storage capacity would be available (Loisel et al., 2014). (Tis is equivalent to about 25 times the capacity of all of Germany's hydroelectric storage power plants.) Te introduction of this technology will, of course, require signifcant investment to retroft existing infrastructure and expand the electrifed road network. Te additional infrastructure costs for electrifed roads are estimated to be about €1 million per road kilometer (KTH and QiE, 2019).

Compared with other technologies, large-scale inductive charging is still a relatively nascent feld. It brings to the fore fascinating research questions pertaining to its potential applications and development. Given the need for technology openness to accommodate various use scenarios, exploring these research avenues can help assess both the technological viability and economic feasibility of this charging method and whether it could complement other charging technologies in the future.

# **8.6 Conclusion**

Te mobility sector is currently in a state of uncertainty. Many market players are facing challenges due to technological change, increasing regulation, changing customer behavior, and the emergence of new competitors. Established technologies that have dominated for many years are losing importance and are being replaced by alternative technologies. Te most obvious change in the powertrain is the ongoing replacement of the internal combustion engine and the substitution of fossil fuels. Tis major technological change is necessary to enable a completely emission-free future in the context of climate change, but is also motivated by environmental and health protection. Accordingly, there are strong interactions with the megatrends of decarbonization and sustainability.

Te evolution is sequential. Bridging technologies such as hybridization facilitate the transition, while other technologies compete directly with each other as long-term solutions. At the same time, complements are possible for diferent applications and sectors, such as battery electric mobility and hydrogen as the fuel of the future. It can be assumed that battery electric vehicles will form the backbone of emission-free individual transportation in the future. Regeneratively produced hydrogen, which can be used in fuel cells and internal combustion engines, can provide a complementary solution. Potential applications include long-distance, heavy-duty, or of-highway transportation. In any case, there is a close interaction between the drive technology and the associated energy ecosystem. Renewably generated electricity and hydrogen must be available in sufcient quantities and at attractive economic conditions. In addition, distribution and convenience for the end user must be ensured. Tis requires a charging and refueling infrastructure that is as capable as the current one for fossil fuels. Te European Union's targets of charging points every 60 km and hydrogen refueling stations at least every 200 km along major transport routes and in every city are a step in the right direction. Te technology of inductive charging while driving might be another attractive option. In any case, massive investment in infrastructure is essential.

Other automotive megatrends include connectivity, autonomous driving, and mobility as a service (Gall & Sieper, 2021). Tese developments, which can be summarized under the term ACES, are mostly not directly related to the drive technology used, but beneft from the increasing electrifcation and digitization of vehicles. As a result, there is the potential to increase safety and comfort while reducing the environmental footprint. At the same time, the technological advances are having a major impact on the OEMs' and suppliers' businesses. Companies that are unable to respond to these developments and uncertainties will face major problems. However, this challenge can also be seen as an opportunity. New markets, products, and business areas are emerging. At the same time, the general public benefts signifcantly from sustainability, zero emissions, and increased safety.

So how can technologies for future contribute to sustainability?—We would like to highlight fve takeaways from this chapter that invite further discussion:

Technologies for the future are needed to disrupt the fossil-fuel-based status quo and to develop the products and value chains for zero-emission mobility. Tis chapter has thus concluded our discussion of the diferent individual steps on the Road to Net Zero. At the same time, it has shown that technology is related to strategy, products, value chains, and much more. Emphasizing this interplay between the diferent contributions of this book, the following and fnal chapter (Chap. 9) *Te Road To Net Zero and Beyond* weaves together important threads of our previous discussions and concludes this book with a look into the future of collaborations that can drive the sustainability transformation.

# **References**

bmdv.bund.de/SharedDocs/DE/Anlage/G/masterplan-ladeinfrastruktur-2. pdf?\_\_blob=publicationFile

engine. *International Journal of Engine Research, 21*(1), 3–10. https://doi. org/10.1177/1468087419877990

**Open Access** Tis chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Te images or other third party material in this chapter are included in the chapter's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

# **9**

# **The Road to Net Zero and Beyond Looking Back, Taking Stock, and Moving Forward**

**Markus Beckmann and Irene Feige**

# **9.1 Refecting on Collaborative Learning**

What are the strategic pathways for sustainability-driven business transformation? With this question in mind, Bayerische Motoren Werke AG (BMW) and FAU came together in a series of expert dialogues to discuss critical topics on the Road to Net Zero. Tis book not only documents these dialogues but also uses them as the core for seven chapters. Each chapter explores some of the many complexities and intriguing issues involved in transforming our economy toward sustainability. Supplemented by a brief introduction to the topic and selected future research avenues, the idea was to allow readers to dive directly into the facets of the "Road to Net Zero" that interest them.

Each chapter therefore stands on its own. However, no chapter stands in isolation. On the contrary, the various steps on the Road to Net Zero all interact, are highly interdependent, and require an integrated perspective. Te purpose of this concluding chapter is to refect on this bigger picture. We will do this in four steps. First, we look back by briefy reviewing the lines of argument developed in each chapter and how they relate to each other. Second, we take stock by identifying recurring themes, critical insights, and lessons (to

I. Feige BMW AG, Munich, Germany

M. Beckmann (\*)

FAU Erlangen-Nürnberg, Nuremberg, Germany e-mail<EMAIL_ADDRESS>
be) learned that we have identifed across individual chapters. Tird, focusing on journeying forward, we look beyond the Road to Net Zero outlined in this book and identify future questions for sustainability-driven business transformation. Finally, we refect on the nature of these challenges and discuss the role of industry–university partnerships in addressing them.

# **9.2 A Summary of this Book's Storyline**

Te title of this book, "Te Road to Net Zero," signifes an ambitious objective—achieving net-zero emissions to curb global warming. Tis bold ambition has profound implications. We cannot reach carbon neutrality merely by making incremental improvements within the existing fossil fuel–based economy. Instead, it necessitates a complete transformation in our business practices, with wide-ranging consequences and contributions required across diferent domains, as discussed in each chapter of this book.

# **9.2.1 Chapter 2: Setting the Course for Net Zero**

Chap. 2 initiated the discussion by dissecting the scientifc and political aspects of the net zero concept. It elaborated on why the Paris Agreement was a pivotal moment in global climate policy. Not only was it the frst global pact supported by all major carbon emitters, including the United States, China, and India, but it also established absolute global warming temperature targets. Based on climate science, these politically agreed-upon targets translate into a defned limit to the remaining carbon budget that humanity can aford, contrasting with the relative reduction approach of the Kyoto Protocol. Consequently, the Road to Net Zero demands a radical transformation of our systems, rather than continuous enhancements to existing fossil fuel technologies and business models.

Te chapter delved further into how governments can catalyze this transformative change. Te expert conversation within it explored the role of government policy in promoting conditions conducive to decarbonizing the economy. Tis includes strategies such as pricing carbon via emission certifcates and carbon taxes, enforcing suitable market regulations, and promoting infrastructure development necessary for the introduction and scaling of alternative technologies. Chapter 2 also elucidated how corporations can align their business objectives with the global Road to Net Zero. It introduces the idea of setting Science-Based Targets, which ofers a tangible and scientifcally substantiated framework for businesses to align their operations with global climate change mitigation eforts.

### **9.2.2 Chapter 3: Crafting Corporate Sustainability Strategy**

Chapter 3 shifted the focus from external, science-based discussions and political decisions, such as the Paris Agreement, to the internal strategic decision-making process within companies. It explored how these external parameters infuence business operations. In the past, companies often set sustainability goals that were separate from their core business strategies, typically under the umbrella of corporate social responsibility. However, the escalating urgency of climate change necessitates a fundamental change in approach. Mature strategies no longer regard sustainability as an isolated component, but integrate it holistically.

On the Road to Net Zero, true life cycle decarbonization requires that sustainability be woven into the fabric of a company's value creation process to encompass the entire value chain rather than just the company's direct operations. Chapter 3 delved into how this integrated approach revolutionizes the entire strategic process. Building upon Chap. 2, it started with strategy formulation as the phase to set reliable, Science-Based Targets. It then moved on to strategy implementation, which necessitates a unifed management approach, and concluded with strategy evaluation, which demands innovative methods of measurement and reporting, thus smoothly transitioning into Chap. 4.

#### **9.2.3 Chapter 4: The Future of Corporate Disclosure**

As the focus on a company's sustainability strategy and performance intensifes, the traditional approach of reporting solely on fnancial indicators falls short of meeting the diverse interests of all stakeholders. Traditional reporting, primarily designed for investors, emphasizes the company's fnancial performance. However, in today's context, specifcally on the Road to Net Zero, there is a growing need to encompass nonfnancial, sustainability-related aspects to address the information requirements of a wider array of stakeholders, including employees, governments, and society at large.

Te shift toward nonfnancial or sustainability reporting has seen a signifcant evolution, moving from voluntary standards with limited comparability to stringent regulatory requirements advocating for enhanced transparency. Chapter 4 delved into this transition and its relation to integrated reporting. It refected upon recent legislative changes, explored the challenges associated with measuring and selecting both fnancial and nonfnancial key performance indicators (KPIs), and discussed the delicate task of balancing the diverse interests of diferent stakeholders.

# **9.2.4 Chapter 5: Creating Sustainable Products**

In the automotive industry, one reason why the Road to Net Zero depends on trustworthy information and comprehensive reporting is that the advent of electric vehicles has shifted the majority of life cycle emissions from the usage phase to the production phase. As a result, circular value chains and their various elements have become paramount in the operational transformation to net zero. With this in mind, Chap. 5 shifted the focus to the importance of product design. Because decisions made in product design have diverse impacts on material sourcing, manufacturing, a product's use phase, and the options for closing material fows at the end of its life, the transition to a circular economy necessitates a reimagined approach to product development. Chapter 5 therefore explored design for recycling, the substitution of scarce resources with secondary materials, and the introduction of natural materials, with a particular focus on interior design. Implementing circular design also requires a shift in service design. Services that facilitate circularity, such as product take-back programs, become essential. Alternatively, a transition in ownership from manufacturers to service providers, emphasizing access and performance-based business models, can help execute circular strategies. Consequently, product design and service design must evolve in tandem.

# **9.2.5 Chapter 6: Transforming Value Chains for Sustainability**

Te conversation about sustainability in product development inevitably leads to the issue of procuring scarce and valuable resources. On the Road to Net Zero, the substitution of primary materials with secondary materials ofers a crucial lever for reducing carbon emissions over the entire life cycle. Chapter 6, therefore, deepened the material fow analysis by zooming into this potential, as well as the challenges of sourcing scarce and valuable resources for electric mobility. Manufacturing batteries and electric drivetrains, in particular, requires energy-intensive materials that are not only limited in quantity, but are also concentrated in a handful of countries worldwide. In addition to its relevance to greenhouse gas (GHG) emissions, this constraint underscores the call for closed-loop supply chains that incorporate secondary materials into production.

However, realizing the vast potential of these material fow loops to achieve carbon reduction and environmental impact goals is not without hurdles. Substantial technological, organizational, and regulatory obstacles exist at each stage of the circular value chain. Because circularity requires robust data, further digital advances, such as the digital battery passport and appropriate data-sharing methods, are essential. In addition, as later noted in Chap. 8 and its discussion of the role of technology, Chap. 6 provided important background on why continued innovation in battery storage technologies can signifcantly contribute to ofsetting existing resource scarcity and will strongly shape the blueprint of future sustainable supply chains.

#### **9.2.6 Chapter 7: Sustainability in Manufacturing**

Before Chap. 8 delved into this role of technology, Chap. 7 focused on the transformation of traditional factories into green, sustainable ones as a pivotal element in the operational transition to net zero. Over the last two decades, production optimization has been a focal point for researchers and practitioners. While the previous shift toward operational excellence was primarily internal, an integrated strategy now necessitates a broader, system-wide consideration, which ties back to Chaps. 3, 5, and 6. To illustrate this shift, Chap. 7 used the BMW iFACTORY as an example, which combines lean systems, digital technologies, and circular production to address sustainability comprehensively. Chapter 7 thus highlighted that the responsibility for implementing decarbonization and circularity begins, but does not end, within a company's own operations. It also emphasized that sustainable production is not a one-of project, but a continuous process that builds on a company's expertise in quality or lean management. Tis type of continuous learning requires access to multiple sources of data, from production machines to manual processes, again underscoring the relevance of data and transparency.

# **9.2.7 Chapter 8: The Power of Technological Innovation**

Te disruptive transformation required for the Road to Net Zero is not possible based (solely) on the basis of incremental efciency improvement in our current fossil fuel–based technologies. Tis is particularly true in the mobility sector. Chapter 8 examined technology alternatives that can replace the internal combustion engine (ICE) as the dominant drivetrain technology. Te chapter conducted a systematic analysis of future drivetrains, from electric drivetrains to synfuel internal combustion engines (ICEs) and fuel cells, discussing the eco-efciency as well as the challenges and opportunities of each technology and outlining potential future technological developments.

A key fnding of the chapter was that there is no technological silver bullet. Instead, each technology will be part of the decarbonization roadmap dictated by specifc use cases and contexts. Battery electric vehicles are likely to dominate personal transport, while hydrogen could complement in areas such as long-distance and heavy-duty transport or in sparsely populated contexts. Regardless of the underlying green technology, future vehicles will be Autonomous, Connected, Electric, and Shared (ACES), with each aspect contributing to sustainability when efectively integrated. However, zeroemission technologies need an enabling energy ecosystem with sufcient renewable energy and innovative charging infrastructure. Tis is a task to be addressed not only by private companies but also by public policies that promote market regulation, incentives, and investments for this enabling environment. Chapter 8 thus closed the loop by linking back to the frst expert conversation and the public policy discussion in Chap. 2.

#### **9.2.8 Looking Back on the Road to Net Zero**

Upon refecting on the summary presented above, we would like to share two crucial observations. First, the expert discussions documented in this book and the seven resulting chapters do not purport to ofer a comprehensive view of all the challenges and questions surrounding the Road to Net Zero. Rather, while addressing many vital topics, some important perspectives are absent. For instance, the role of consumers is touched upon (e.g., in Chap. 3 as a sustainability driver or in Chap. 5 when discussing service design to promote circular consumer behavior) but not explored in depth, and the interaction between automotive mobility and broader mobility systems is mentioned (e.g., in Chap. 7 on smart cities) but not analyzed thoroughly. We anticipate future discussions to tackle these and other underexplored aspects.

Second, the summary outlines the book's chapters in a linear fashion, implying a sequential progression. However, the real-world transition to net zero is far from linear, as all elements must occur simultaneously, with numerous interconnections and feedback loops arising between the various topics. Tus, the following section identifes and discusses recurring themes that link the diferent chapters and emerging insights as potential lessons to be learned across chapters.

# **9.3 Insights and Themes across Chapters**

As editors, we had the rewarding experience of reviewing all the chapters multiple times, often oscillating between diferent sections. Tis iterative process illuminated recurring themes and insights that echo throughout the various chapters and, at times, across the entire book. We present some of these observations in this section. It is important to note that not all these insights are novel or counterintuitive. To those of us deeply immersed in sustainability management, some fndings may seem evident and familiar. However, their recurrence does not diminish their importance but underlines their signifcance. We also share these insights with readers in mind who may be new to the discourse on sustainability management. Regardless of whether these insights seem novel to you, resonate with your experiences, or provoke critical thought, our aim is to stimulate a thoughtful discourse.

# **9.3.1 Sustainability Demands Both Integrative Thinking and Integrative Management**

Sustainability is widely recognized to necessitate integrative thinking due to the multifaceted nature of sustainability challenges. Tese challenges cut across various disciplines, sectors, and stakeholder interests, requiring an understanding that goes beyond the siloed knowledge of individual disciplines. Integrative thinking enables the synthesis of diverse perspectives and the ability to see interconnections and interdependencies. Tis is critical for devising holistic, efective strategies for sustainability that consider the environmental, social, and economic dimensions in tandem rather than in isolation.

In this book, experts from diferent disciplines exemplify this integrative thinking with a focus on integrative strategy (Chap. 3), integrative reporting (Chap. 4), the integration of sustainability in product development (Chap. 5), value chains (Chap. 6), or the factory of the future (Chap. 7). Tese contributions highlight that integrative thinking is more than the simultaneous consideration of ecological, social, and economic factors. It also requires a holistic view when embracing a life cycle perspective, integrating sustainability aspects from raw material extraction to a product's end of life.

However, integrative thinking does not come naturally. While functional diferentiation and specialization across disciplines are essential for gaining the detailed understanding required to address specifc challenges on the Road to Net Zero, they also create fragmentation that requires reintegration. Tis leads to a strong call for an integrative management approach, both within and between organizations.

Integrative management emphasizes collaboration and coordination across various units within an organization and among diverse external stakeholders. In the context of sustainability, this might mean aligning diverse internal functions—some of them represented in this book—on sustainability goals. It could also involve collaboration with external stakeholders, such as suppliers, customers, governments, nongovernmental organizations (NGOs), and communities, to cocreate sustainable value.

So what is the takeaway? Te integrative thinking required for sustainability must be complemented by appropriate forms of integrated management. Tis does not only mean incorporating sustainability into individual corporate functions; it also includes creating organizational structures that promote cross-functional collaboration and knowledge sharing. Furthermore, it is essential to align incentives that bind individual roles and responsibilities with the bigger sustainability picture.

# **9.3.2 Sustainability Is a Moving Target**

Tat "sustainability is a moving target" is not only a well-known adage in our feld, it is also a practical reality that we experienced while working on this book. From the expert discussions in 2021 to the completion of this book, we noted a myriad of changes in our conversations. Some details that were current during our initial discussions may appear outdated now. Without changing their substance, we have carefully adjusted these sections where appropriate. We have also encapsulated the expert dialogues within comprehensive chapters that focus on the emerging longer-term picture, with the goal of providing enduring value to our readers.

Sustainability is a moving target primarily because it operates within a complex, dynamic system characterized by a continual change. Social, economic, environmental, and technological factors are all in a constant state of fux, and each of these infuences our understanding of sustainability, as well as the drivers and means for addressing it. For instance, as scientifc knowledge about climate change deepens, our goals for carbon reduction may become more aggressive (Chap. 2). Similarly, as market demands and regulations change, so do the drivers for sustainability strategy (Chap. 3). Since the start of this book project, changing regulatory requirements have also massively reshaped the feld of sustainability reporting (Chap. 4). Likewise, geopolitical disruptions have changed the discourse on sustainable and resilient value chains between the initial expert conversations (2021) and this book's publication (2023) (Chap. 6). Finally, rapid technological change, including accelerated advances in artifcial intelligence, ofers new opportunities to promote circularity (Chap. 5), sustainable manufacturing (Chap. 7), and, of course, the race for green drivetrains (Chap. 8).

So what is the takeaway? On the Road to Net Zero, we must continually refresh our understanding of our destination and the path to reach it. Te multifaceted nature of sustainability means that advancements in one area could trigger new challenges and opportunities in others. Terefore, sustainability is not a fxed target, but an ongoing, evolving journey that demands constant reassessment and adjustment of our strategies and goals. Tis journey requires iterative learning and, crucially, unlearning. We must reevaluate and may need to discard yesterday's answers and practices and develop new ones tomorrow. It necessitates questioning established responsibilities, business models, technologies, and the notion of going it alone. Unlearning is challenging, especially in isolation. Hence, collaboration and exposure to alternative perspectives are vital for learning and prospering, which leads us to our next insight.

#### **9.3.3 Sustainability Is a Race You Cannot Win Alone**

Sustainability challenges, such as climate change, are systemic problems that require systemic solutions. Te Road to Net Zero is, therefore, about systemic change. However, as nearly every expert conversation highlighted, no company or organization can single-handedly achieve the systemic changes needed to transition to a sustainable future. Instead, collaboration is needed to secure and pool resources, share knowledge, and align eforts around common goals.

Collaboration with diverse stakeholders is nothing new for companies. In fact, cocreating value with customers, suppliers, investors, employees, and communities is at the core of what defnes a well-managed frm and sustainable growth. However, the Road to Net Zero calls for deeper and more nuanced forms of partnerships and collaboration. With this book's focus on the automotive industry in mind, we would like to highlight three of them.

First, public–private collaboration is essential for setting the stage for sustainable mobility solutions. Tis includes not just relevant energy market regulation and carbon pricing, but also the establishment of necessary infrastructure for electric or hydrogen mobility, from renewable energy generation to distribution, storage, and charging infrastructure (Chaps. 2 and 8). Second, on the Road to Net Zero, companies are being held accountable for the life cycle impact of their products. Tis is especially pertinent for the automotive industry, where vehicle electrifcation shifts emissions from usage to the upstream value chain (Chap. 6). To truly take responsibility for their full life cycle impact, companies must forge more profound collaborations along their value chains. Tis involves exchanging sustainability-related data, codeveloping and integrating greener technologies, and establishing circular material fows (Chap. 5). For instance, automotive OEMs can signifcantly reduce their carbon footprints by replacing primary materials with secondary ones. However, these solutions demand more sophisticated collaboration along the value chain, as Chap. 6 demonstrated for electric batteries. Tird, decarbonizing entire industries and sectors requires competitors to collaborate to establish robust industry standards and an equitable playing feld for sustainability (Chap. 3). Tis is already happening in the automotive industry with initiatives like Drive Sustainability, a partnership of leading OEMs improving supply chain sustainability, and the emerging data ecosystem Catena-X (Chaps. 5 and 6).

So what is the takeaway? Collaboration is undoubtedly a buzzword, and it is hard to argue against it. However, while it sounds simple, in reality, it can be a complicated dance. Coordinating diferent partners amplifes the complexity and necessitates the reconciliation of divergent, often conficting, interests. While the Road to Net Zero is grounded in a shared commitment to a sustainable future, the perspectives and motivations of companies, regulators, and civil society actors often diverge. Even among themselves, OEMs and suppliers vie for value, and competitors seek to outdo each other. Even within industries, companies compete for a slice of the pie. Competition and diverging interests do not disappear in the pursuit of sustainability; instead, it is about forming partnerships that respect these diferences and align them toward a common goal. Hence, companies must hone their partnership skills, including the ability to compete within a set framework while jointly crafting a better one.

#### **9.3.4 It Is All About Data: Measurable Indicators, Targets, Transparency, and Digitalization**

Data, along with measurable indicators, targets, transparency, and digitalization, are at the heart of the Road to Net Zero. Te book's opening chapter set the tone with the principle, "what gets measured, gets done," emphasizing that the journey toward sustainability must be grounded in reliable data and evidence, especially when it comes to the decarbonization of industry. Without them, eforts lack direction and tangibility.

Defning the right indicators is a crucial frst step. For climate change, this seems straightforward. Here, carbon dioxide (CO2) and the other greenhouse gases identifed in the Kyoto Protocol and translated into CO2 equivalents form the basis for the global climate policy discourse (Chap. 2). Tese indicators, in turn, enable efective target setting, both for the global Road to Net Zero (Chap. 2) and for corporate strategy (Chap. 3). At the global level, the 2 °C and 1.5 °C global warming goals and the implied remaining carbon budget present benchmarks against which global climate action can be measured, revealing our current dramatic shortcomings. Building on the CO2 indicator to translate global targets to the corporate level, companies can leverage frameworks like Science-Based Targets to align their decarbonization eforts with the decarbonization paths needed at the planetary level (Chap. 2).

Along with the indicators and targets, the right measurement scope is equally important. While at a planetary level, this is straightforward (all of humanity's emissions are included), the picture is more complex at the corporate level. Here, some emissions are caused by a company's own operations, while others occur upstream or downstream in the value chain (Chaps. 3, 5, 6, and 7). A life cycle approach to measuring emissions, therefore, accounts for CO2 emissions from all stages of a product's life—from the extraction of raw materials to the disposal of the product. Tis comprehensive view reveals hidden emissions and enables better decision-making. At the same time, it adds complexity, as Scope 3 emissions (occurring in the value chain) are much more difcult to infuence and measure.

However, having the right indicators, targets, and scope is pointless without access to high-quality data. Particularly when it comes to driving decarbonization in a complex system like a value chain, having precise, timely, and comprehensive data is paramount. Tis type of data allows businesses to identify hotspots for improvement, implement changes, and track their success. However, generating high-quality data is easier said than done. Currently, the majority of Scope 3 emissions are estimated using databases. Actual, real-time data are scarce. In addition, suppliers are reluctant to share data. Overcoming these challenges requires collaboration and technological innovation, with digital platforms like Catena-X demonstrating how digital solutions can facilitate data sharing on the Road to Net Zero.

Te role of digital solutions in accelerating progress on the Road to Net Zero cannot be overstated. Digitization has the potential to signifcantly enhance the transparency of carbon emissions in value chains (Chap. 6). Technologies such as blockchains, artifcial intelligence (AI), and the Internet of things (IoT) can provide unprecedented visibility into the environmental footprint of products and services throughout their life cycles (Chap. 5). For example, IoT devices can capture real-time emissions data at every stage of production (Chap. 7) and distribution, from raw material extraction to enduser consumption. AI can subsequently process this enormous amount of data to generate actionable insights, identify emissions hotspots, and propose efective mitigation strategies. Blockchain technology enables securing this data, ensuring its integrity, and making it tamper-proof. Tis shared, decentralized ledger allows every participant in the value chain to access and verify the same emissions data, fostering a culture of accountability and collaboration. Tus, by harnessing the power of these digital technologies, we can create a data-driven, transparent, and trustworthy system for tracking and reducing carbon emissions across value chains.

Finally, data are important for internal decision-making. Reporting this type of data, with all its complexities and nuances, is crucial to ensuring transparency and building trust among stakeholders (Chap. 4). Transparency promotes accountability, while also fostering an environment in which best practices are shared and replicated and accelerate the industry-wide transition to sustainability.

So, what is the takeaway? Progress on the Road to Net Zero depends on the quality of the data that guides us. Tis means that companies should take a science-based approach to defning reliable metrics and setting targets that are aligned with societal sustainability goals. To consider holistic life cycle impacts, collaboration across the value chain requires the fow of data and information along it. Digitalization provides the game-changing innovations needed to generate, exchange, process, and disclose data at this new level of complexity.

#### **9.3.5 Not Everything That Matters Can Be Measured (Accurately)**

While data, metrics, and measurement are crucial on the Road to Net Zero, many chapters emphasized that factors such as vision, leadership, and culture are equally essential to a successful transition to sustainability (Chaps. 1, 3, 5, 6, and 7).

Metrics are undeniably important for tracking progress and facilitating decision-making, but they are always selective and therefore have their limitations. One of the key challenges lies in the multidimensionality of sustainability. Sustainability encompasses a wide array of elements, from environmental protection to social equity and economic viability. While some of these aspects can be quantifed and measured, others are qualitative and intangible, making it hard to aggregate them into a single, comprehensive sustainability index.

Moreover, the sustainability transition discussed in this book is taking place in a 'VUCA' world (Chap. 3) characterized by volatility, uncertainty, complexity, and ambiguity. Predicting future scenarios or outcomes involves a multitude of variables and assumptions, many of which are subject to change due to unpredictable factors. Terefore, while metrics can guide our actions and decisions, they cannot perfectly predict the future or fully capture the complexity of sustainability.

Tis is where the importance of vision, leadership, culture, and long-term commitment comes into play (Chaps. 5, 6, and 7). Te role of leadership is not just to understand and use metrics but to provide a vision of the future that transcends these measurements. Leaders need to inspire and motivate and to foster a culture of sustainability that is rooted in values and beliefs as much as in data and evidence. Tis culture, in turn, can shape behaviors and decisions in ways that cannot be precisely measured but are nonetheless critical to achieving sustainability goals.

A good illustration of this is the 1.5 °C global warming target that underpins the Road to Net Zero. While this target is informed by scientifc data on the potential impacts of climate change, the decision to set this particular target was ultimately a political one (Chap. 2). It represents a collective vision of a future in which we limit global warming to a level that, according to scientifc consensus, could prevent the most catastrophic efects of climate change. Tis vision and the leadership required to pursue it are essential complements to the metrics that guide our path toward sustainability.

So what is the takeaway? Te transition to sustainability requires a balanced approach, combining both technological advancements and evidence-based decision-making with shared values and a clear vision. Metrics alone, without a guiding vision, can lack direction and may not lead to meaningful change. Conversely, a vision without factual evidence might result in superfcial or inefective solutions. Achieving sustainability demands the thoughtful integration of both elements, creating a comprehensive strategy that is frmly rooted in scientifc facts and guided by shared values and aspirations.

# **9.4 Beyond the Road to Net Zero**

Tis book has brought together selected perspectives that have their role to play on the Road to Net Zero. In doing so, the primary focus was on the urgent issue of climate change. However, as we underscored earlier, sustainability is a moving target that is constantly evolving in response to our growing understanding of our relationship with the planet and the realization of our collective responsibilities. Terefore, reaching net zero is just a milestone, not the fnal destination. In this section, we highlight a few exemplary topics that merit further exploration but are beyond the scope of this book. Although these topics have been touched upon within this book, they invite a more comprehensive exploration in our ongoing quest for sustainability. Te list is far from complete but sufces to show the potential for further collaboration between universities and industry.

# **9.4.1 Beyond Decarbonization**

Tis book has primarily focused on the Road to Net Zero, acknowledging the urgent need to reduce CO2 emissions in light of the ongoing climate crisis. Tis is a signifcant step forward in addressing the sustainability challenge. However, we must understand that it is not the only pressing environmental issue we face today.

Beyond carbon emissions, other pressing ecological challenges exist, such as the signifcant footprint of our material resource consumption. Tis footprint afects not only carbon emissions but also biodiversity, our water resources, and social issues, including human health. Te Global Resources Outlook by the United Nations Environment Programme (UNEP) in 2019 revealed that resource extraction has tripled since 1970, even though the population has only doubled during the same period. Extractive industries contribute to half of the world's carbon emissions and account for more than 80% of biodiversity loss.

Tese consumption patterns, with the world utilizing over 92 billion tons of materials annually and growing at a rate of 3.2% per year, are not sustainable. Agricultural land-use changes account for over 80% of biodiversity loss and 85% of water stress, with the extraction and initial processing of metals and minerals accounting for a signifcant proportion of health impacts from air pollution and global carbon emissions.

To address these issues, we need to decouple economic growth from material consumption. Tis can be achieved through a circular economy, which not only reduces CO2 emissions but also reduces the strain on our planet's fnite resources. Te importance of slowing down, narrowing, and closing material fows for this purpose has been described in detail in Chap. 5 of this book. Tere is already a broad knowledge base in sustainability management for implementing circularity through various strategies. However, compared with the climate-related Road to Net Zero, there is still a critical path ahead.

In fact, the signifcance of the Road to Net Zero goes beyond its climate change implications. It symbolizes humanity's frst attempt to translate critical planetary boundaries into policy frameworks and science-based corporate targets. Te "Road to Net Zero" recognizes that human prosperity and economic growth must be aligned with the ecological carrying capacity of our planet, with the climate system being one such planetary boundary. Te Paris Agreement and its related frameworks provide an accepted benchmark for climate change. However, for other planetary boundaries, such as biodiversity, the development of adequate indicators, global targets, development pathways to meet them, company-specifc targets, and standards for measuring and comparing performance is much more in its infancy.

In this book, we have focused on the Road to Net Zero greenhouse gas emissions. However, humanity must also bend the curve regarding the loss of biodiversity, soil, or freshwater reserves. With the Global Biodiversity Framework agreed upon in December 2022 at the United Nations' Biodiversity Conference COP15 in Montreal, a New Road to Net Zero could emerge regarding biodiversity loss. A business-related initiative linked with this discourse is the Science-Based Targets for Nature (SBTN), which extends the successful Science-Based Targets Initiative (SBTI) for climate to other aspects of nature. SBTN seeks to develop quantifable, scientifcally backed objectives to mitigate the impacts of environmental degradation and biodiversity loss. Te initiative's success remains to be seen, but its potential to infuence corporate activities is encouraging.

Alongside ecological challenges, businesses are also grappling with their broader social impact, including their duty to respect and uphold human rights. As industries transition toward electrifcation, green energy, and circularity, this afects the complexity of global supply chains, presenting new risks of indirect involvement in human rights abuses. Corporations are also tasked with ensuring fair labor practices, not only within their own organizations but also within their supply chains, which span multiple jurisdictions with varying labor standards. Te rapid advancement of technology, such as automation and artifcial intelligence, has introduced new challenges in preserving privacy and preventing discrimination.

As on the Road to Net Zero, businesses must foster more efective collaborations with governments, NGOs, and communities to successfully address these issues. In addition, they must establish robust grievance mechanisms and remediation processes to respond efectively when things go awry. Te importance of transparency and accountability cannot be overstated in these matters. However, just as discussed for environmental challenges, the development of comprehensive indicators and standards for measuring, comparing, and reporting human rights performance remains an ongoing process, again refecting the nature of sustainability as a moving target.

Finally, grasping the interconnectedness and intersectionality of various sustainability challenges is crucial. For instance, while the electrifcation of mobility presents a promising path toward lowering CO2 emissions, the increasing demand for certain minerals can inadvertently exacerbate biodiversity loss and result in human rights challenges. Similarly, the shift toward a circular economy is not devoid of complexity. Tis might necessitate managing trade-ofs between reducing GHG emissions, moderating water usage, minimizing biodiversity impacts, optimizing required land mass, and limiting hazardous emissions. In this context, businesses transitioning to circularity must develop a nuanced understanding of these trade-ofs and establish rigorous criteria for evaluating and comparing them when making pivotal decisions. As we continue our journey toward a sustainable future, it is essential that our approach is comprehensive, balanced, and cognizant of these interwoven facets of sustainability.

# **9.4.2 Beyond Reducing Negative Impacts**

As our discussion of the Road to Net Zero focused on how to sharply diminish carbon emissions, the spotlight has invariably rested on curtailing a company's adverse impact on its environment. Unarguably, mitigating harm carries immense signifcance—a truth we expounded in our preceding discourse. However, an overemphasis on the reduction of harm can cast a shadow on another equally important aspect—the positive impacts that society expects companies to create. Traditionally, these positive contributions encompass a wide range of factors, from the utility of their products and services in addressing various human needs and the fnancial and personal development opportunities ofered to employees to the fnancial returns disbursed to investors and society via taxes.

As we traverse the Road to Net Zero, acknowledging the positive roles of corporations becomes crucial to ensure that well-meaning attempts to pare down negative efects, such as decreasing carbon emissions, do not inadvertently cause unproportionally harm elsewhere by undermining the value companies bring to their stakeholders.

Understanding how companies can create positive impacts is also crucial to achieving net zero goals, as discussed in this book. Te term "net zero" itself suggests a balance—it does not denote the absolute absence of emissions; rather, it suggests the idea that remaining emissions added to the atmosphere can be ofset by emissions eliminated or sequestered elsewhere.

In the Paris Agreement, the net zero goal mandates that, by 2050, global emissions must be as close to zero as feasible, with any lingering emissions reabsorbed from the atmosphere by oceans and forests, for instance. Tis emphasizes the need for carbon removal, hence shifting the focus toward measures with a positive impact. Similarly, the SBTI Net-Zero Standard states that companies wishing to adhere to this ambitious standard must not only establish robust reduction targets (at least 90% emission reduction by 2050) but also neutralize any remaining emissions through permanent carbon removal and storage.

Tis focus on activities with a positive impact extends beyond just net zero carbon emissions to include net zero targets for biodiversity and water. Here, for any biodiversity loss that cannot be avoided, businesses need to neutralize these remaining negative efects with positive impact measures. Positive impact activities are therefore pivotal in achieving any net zero goal. However, even upon reaching the net zero landmark, net zero emissions or biodiversity losses only signal a cessation of future harm to our climate and natural environment. Te existing damages and depleted ecosystems remain unaddressed, which is where regenerative business practices come into play.

Regenerative business practices are an emerging paradigm that aims to restore, renew, and revitalize their own sources of energy and materials. Tis concept takes sustainability a step further, moving beyond merely reducing harm to actively repairing and enhancing the environments and communities in which a business operates. Tese practices embody the essence of regeneration—they are, by defnition, net positive. 1 Tey enable companies to design systems that not only sustain but also enhance the capacity of the environment and communities to fourish. Companies can apply such regenerative practices in their own operations, encourage their suppliers to do so, or collaborate with third partners (e.g., when restoring natural ecosystems or removing carbon from the atmosphere).

Tese capabilities to generate positive impacts, individually or in collaboration with others, open up thrilling prospects beyond the net zero milestone. Hence, once we have traversed the Road to Net Zero, the next stage of ambition could be to embark on the Road to Net Positive.

# **9.4.3 Beyond Single Trajectories That Ignore the Role of Space**

Tackling climate change via the Road to Net Zero is a worldwide efort, but it is crucial to recognize that solutions and contributions are context-specifc. Tis book has touched lightly upon this geographical aspect, but it needs more in-depth exploration in future research and cross-sector dialogue.

Place matters enormously when it comes to transformation pathways toward sustainability. From a business viewpoint, various factors, such as the enabling environment, strategic drivers, potential alternatives, practical constraints, and benefts of sustainability engagement, are all infuenced by where the company operates. Here, companies often encounter fragmented and sometimes contradictory environmental contexts that pose the challenge of forming a unifed, consistent strategy.

To start with, in Chaps. 2 and 8, and beyond, this book highlights the role of public policy in shaping corporate sustainability strategies, ranging from energy market and carbon pricing regulations to those concerning products and technologies (such as feet emissions or the ban of internal combustion engines) and infrastructure development (such as charging infrastructure). However, public policies are far from uniform globally. For example, emerging regulations for recycling electric batteries vary signifcantly between China and the European Union, meaning that the requirements for companies' sustainability strategy difer depending on the regulatory context.

In the automotive industry, providing mobility has, by defnition, a spatial perspective. It makes a diference whether mobility is provided in an urban

<sup>1</sup>Note that "positive" here refers to the desirable, positive impact, not to remaining undesirable efects that have not been reduced to zero.

context in the Netherlands or in a rural context in Brazil. Te spatial context will infuence customer needs, the availability of charging infrastructure, and the suitability of diferent technologies to meet those needs.

Furthermore, when assessing the sustainability of value chains, it is critical to consider spatial factors afecting the life cycle impacts of technologies and usages. Factors such as the availability of green energy, water scarcity, biodiversity impacts, and emissions from transport and logistics are all location-dependent. Hence, the most sustainable alternative in one location might not be the same in another. External drivers like societal expectations and customer and employee needs play a key role in shaping a company's sustainability strategy (Chap. 3). Tese societal drivers vary greatly between regions. Terefore, global companies must balance meeting diverse expectations while maintaining their internal consistency. Considering these spatial contexts, the journey to net zero will follow diferent trajectories in diferent regions.

Tis book evolved from a discussion among experts from the same spatial neighborhood. Te FAU and BMW headquarters are both located in Bavaria, Germany. However, for a more comprehensive understanding, we need to foster dialogue with stakeholders from other global regions like China, the United States, and others. Future exchanges should focus more on understanding these difering contexts, their infuencing factors, their impact on sustainability, and how companies, regulators, and other stakeholders can align multiple transition pathways on our shared planet.

# **9.5 The Future of Industry–University Partnerships**

Te journey toward sustainability requires innovative technologies and robust policy frameworks, as well as dynamic collaborations that transcend traditional boundaries. Tis book stands as a testament to this type of collaborative spirit by documenting and expanding on the dialogues of experts from BMW and FAU, who came together to discuss critical landmarks on this journey.

Tese dialogues underscore the potential of university–industry partnerships in addressing sustainability challenges. Tese challenges are complex and multifaceted, demanding an array of perspectives and interdisciplinary dialogues. Universities, particularly full-spectrum universities like FAU, are uniquely equipped to facilitate such dialogues. Tey encompass a wide spectrum of disciplines and maintain a crucial outside position, providing a healthy distance and independence from business, political actors, and civil society. Tis independence allows them to critically assess the status quo and propose innovative solutions grounded in rigorous research.

However, the dialogues in this book, while insightful, have largely represented rather homogenous views. Tis points to the need for a greater diversity of viewpoints in our discussions around sustainability. Controversies about sustainability should not be viewed as a hindrance, but rather as a source of innovation and learning. If orchestrated constructively, they can spark creative solutions and drive progress. In these dialogues, it is important to respect the difering identities, needs, and integrities of various actors, recognizing that each contributes a unique perspective to the overall discussion.

While this book has focused on the collaboration of two strong partners in Bavaria, BMW and FAU, future collaboration must transcend regional and institutional boundaries. Universities, with their inherently international nature and rich tapestry of research collaborations, are well suited to facilitate such partnerships. Tey can serve as a platform where perspectives from different regions, disciplines, and sectors can coalesce, fostering a rich discourse that can fuel sustainability transformation.

Furthermore, universities serve as a natural bridge and forum for discussion between generations. Tey are places where enthusiastic and sustainabilitydriven youth interact with experienced professionals and academics. Tis intergenerational dialogue can stimulate fresh thinking and drive momentum toward sustainability goals.

In conclusion, the power of university–industry partnerships in driving the transition to sustainability cannot be overstated. Tese partnerships ofer an invaluable platform for interdisciplinary dialogues, viewpoint diversity, and international collaborations. More than that, they provide a space where respect for difering identities and needs, and the passion of diferent generations for sustainability, can come together to catalyze transformative action on the Road to Net Zero and beyond.

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