Continental: Free Trade Is a Necessity for Affordable Mobility for All

• Automated driving, robot taxis, artificial intelligence, cyber security: Continental is holistically paving the way for the mobility of the future
• Electric motors vs. combustion engines: CEO Dr. Elmar Degenhart warns against the policy of “forcing solutions that are not economically viable” at the Annual Shareholders’ Meeting of the DAX company
• Total sales have grown more than sixfold since 1998 / operating income is now twelve times higher
• Sales projection for 2025 well in excess of €65 billion

Hanover, April 27, 2018. Free trade instead of trade wars. This was the appeal aimed at policy makers made today by Continental CEO, Dr. Elmar Degenhart, at the technology company’s Annual Shareholders' Meeting. “Protectionism and trade wars make our products more expensive. For example, unequal tariffs are hurting the free trade of cars between the U.S.A. and Europe. The best solution is to abolish them completely or bring them into line at the lowest level. We are calling for policy makers to enter into negotiations. We expect them to work hard for fair, free trade. Artificially inflating prices reduces national income and in doing so puts jobs and prosperity at risk,” warned Degenhart in Hanover at the Shareholders’ Meeting in front of more than 1000 participants.

Continental must constantly change and adapt in light of the rapid development of the markets, anticipating change as a normal, everyday activity. “That is why we are becoming even more flexible and agile, which helps us to remain competitive and fit for the future on a permanent basis. With a network culture, flat hierarchies and small units that respond more quickly to customer requirements as well as greater responsibility and freedom for our staff including more trust-based working hours worldwide,” emphasized Degenhart.

This is why the organizational structure of Continental is currently being reviewed. “We are currently testing suitable scenarios. We want to find out which setup for our organization will make us adaptable even faster. We expect to submit a recommendation to the Supervisory Board by the middle of the year. We are continuing to expand Continental’s values alliance for top value creation. The Executive Board and the employees have therefore just agreed upon a new future alliance. Together, we will thus ensure our greatest possible success,” explained Degenhart.

The Continental CEO pointed out that sales have increased more than sixfold over the past 20 years and operating income is now even twelve times higher. “Our run of success will continue. We are heading for sales of more than €50 billion for 2020. In 2025, we should surpass the threshold of significantly more than €65 billion. And we will do so through organic growth,” emphasized Degenhart.

According to Degenhart, one challenge that remains is to make power transmission technology even cleaner and more efficient – “Electric drive systems are the future of vehicle propulsion. We are convinced of this. But electric does not automatically mean clean. The ecobalance of electric mobility is not looking too good at the moment. We have also calculated an extremely aggressive growth model that is theoretically possible for us from 2020. It indicates that, in 2050 at the earliest, nine out of ten vehicles could roll off the production line fitted with an all-electric drive system. A quarter of all vehicles on the roads would then still be using internal combustion engines,” he explained.

“This leads to one clear and conclusive conclusion – we will need various kinds of drive systems side-by-side well beyond 2030. By this I mean a combination of gasoline, diesel and natural gas. In addition, we need hybrid systems, all-electric vehicles and hydrogen.  This is why we are appealing to policy makers to set sensible exhaust-gas limits for effective climate protection. But let the industry choose the best technologies for this. Do not use regulations to force the use of solutions that are not economically viable,” says Degenhart.

Degenhart sees the battery as the biggest hurdle on the way to fully electrical driving. He does not anticipate a competitive technology until after 2025. The CEO is still open to entering the production of solid-state battery cells: “We can imagine producing solid-state battery cells in the future. Here, we have in mind batteries that use solid materials. This would require an attractive business model. We do not expect to make a decision on this until after 2020.”

Continental already has a wide range of innovative products and services and is holistically paving the way for the mobility of the future. This includes the 48-volt system, the “people’s hybrid,” which makes the combustion engine cleaner and more efficient, as well as sensors, actuators and electronics as the main players in automated driving. Continental’s platform for the development of driverless vehicles is called “Continental Urban Mobility Experience”, and BEE is the technology company’s vehicle concept, which is designed for one or two adults, appears when summoned and optimally balances economy and environment. With Argus Cyber Security from Israel, Continental has acquired additional expertise in the construction of a protective shield around the vehicle, which prevents false commands from entering the vehicle and detects and fends off manipulations.

“The future of mobility requires more and more software. Today, more than half of investment in new driving functions is spent on developing software. In some cases it will soon be as high as 80 percent,” explained Degenhart. Here, a distinction should be made between classic programs, which are derived from human behavior; learning programs, which learn using artificial intelligence methods until the start of production; and continuously learning programs, which continue to learn during use. “The rules of our industries are changing fundamentally,” says Degenhart.

Please click here for further information on the Annual Shareholders' Meeting 2018.