You are a leader in sensors, cameras and other autonomous driving technology. What applications do these future technologies have today?
You will have two markets for autonomous cars. You will have robotaxis, which will come very soon, probably starting in the U.S. with Waymo, and autonomous cars that you and I can buy -- that will be a long way off. However, advanced driver assistance systems today have all kinds of sensors, and Valeo has the automotive industry’s broadest range of sensors. That helps us develop complex software that will fuse those sensors together for autonomous driving.
Most people agree that autonomous driving will not be possible without partnerships or alliances. What are your key partnerships?
It will all depend on what part of the value chain you want to be involved in. Where we absolutely want to be involved, where we don’t need partners, is in the sensors and the first level of software. Of course, we have a well-known partnership with Mobileye [which makes frontal cameras], which has significant orders, but we are the only one today with lidar on the market. That is our territory. Then you can look at the top of the pyramid, where you organize self-driving networks. We have to understand how it works. But I'm not really convinced that's a market for suppliers. Waymo and our traditional customers, the automakers, invest a lot in that part of the business. If we put too much money there, we will one day become a competitor of our customers. That’s not what we want to do. We might have a strategy and positioning in the value chain that is quite different from some of our competitors. That’s good.
The EU is considering emissions targets for 2030 that are 35 percent lower than those planned for 2021. What does it mean for Valeo and large suppliers in general if you need to reduce emissions by 35 percent in 2030, instead of, say, 20 percent?
I'm not sure it's a problem for the supply industry. It's a problem for the whole industry. Achieving a 35 percent reduction over what we have today means a very, very big proportion of electric cars. The industry as whole is ready but the questions are: Will the consumer be ready? And, will the cost of such a device align with what consumers can afford? During a dinner with industry leaders French President Emmanuel Macron made a very interesting suggestion. Instead of just talking about 2030 standards for new cars to solve the pollution problem, could we find a way to accelerate replacing older cars, which are emitting most of the air pollution? It's an interesting concept: How to balance the short and long term?
How would a fast changeover to electric cars affect your employment, manufacturing or engineering operations?
In our business, we are "local for local" -- for Europe we produce in Europe, for China we produce in China. The intercontinental flow is minimal; thus capital expenditures and employment would probably be neutral globally. In the last 10 years we have reduced our exposure to diesel, so we won't be affected as much as some competitors [by the decline of diesel sales]. We do have a significant business in clutches and transmissions that would be affected, but on the other hand, if we keep moving ahead with inverters, battery chargers and DC to DC inverters for electric cars, in terms of manpower it would be equal. The question becomes: Where do we invest? That will be related to the attractiveness of various countries.
Thermal management -- including heating and air conditioning -- is one of your core divisions. How will that change as we move toward more electric cars?
In electric cars, an electron can be used only once -- to heat or cool the car, or to move the car. The competition for the electron will be extremely high. We have a lot of concepts that we are presenting to our customers to optimize the management of air conditioning. I'm confident that we will be able to sell them.
Mass-market automakers such as Renault and PSA are preparing a range of plug-in hybrid models. What does this mean for Valeo?
It's not clear what will be the balance between full-electric cars, hybrids and gasoline-powered cars. For us it's the best of several worlds. If it's a world where we have lots of electric cars, very often they will be based on high-voltage technology – which is what we develop together with Siemens (in a joint venture). Some hybrids, or even electric cars, will use 48-volt technology. The consumer will ultimately decide, and we are well positioned in each of the market segments. For us the only question is the speed at which each one of those segments will grow.