C Talk ▏Thomas Stocker from Gentherm: China is very important for Gentherm, now and future
It is generally acknowledged that electrification, connectivity, automation, and ride sharing have become the megatrends in global automotive industry. With technology development, vehicles have become the third living space where consumers can work, rest or entertain, resulting in more and personalized requirements for in-vehicle comfort.
Gentherm is a global developer and marketer of innovative thermal management technologies for a broad range of heating and cooling and temperature control applications. Automotive products include variable temperature Climate Control Seats, heated automotive interior systems, battery performance solutions, and digital interior and electronic devices. Medical products include patient temperature management systems.
Maximum comfort with minimum energy
Generally speaking, Gentherm expertise is in thermal management. Gentherm is leading globally the Climate Comfort Solutions (CCS®). The CCS products, including seat heaters, steering wheel heaters and other heated interiors around the driver and passengers as well, remains the company’s biggest business unit.
Gentherm’s products can provide comfort to users of all vehicles, no matter traditional powertrain or EV. Thomas Stocker, Senior Vice President and General Manager of Gentherm’s Digital Interiors and Battery Performance Solutions, Managing Director of Gentherm Europe, said in an interview with Gasgoo.
Thomas Stocker; Photo credit: Gentherm
For the moment, one of the pain points for electric vehicles is the driving range anxiety. Especially in winter, if you want more range, it means you cannot often turn on in-vehicle air conditioner, for the HVAC system is the second largest power consumer in a car. But Gentherm’s CCS products feature direct heating or cooling on the passenger instead of ambient air first. “That means you save a lot of energy, and gives electric vehicles more range.”
Apart from those independent components, Gentherm is a systems supplier. Take its ClimateSense™ for example. It is an integrated comfort system designed for personalized in-vehicle microclimate using localized convective, conductive and radiative heating and cooling products. According to Thomas, the system is controlled by Gentherm’s smart algorithm, and machine learning, which can learn how consumers use their cars, perceive different thermal demands for different body parts, and personized thermal comfort.
In the future, the company will further intergrade the system to merge many more sensors in the vehicle to control sound, lights, fragrances apart from heat, Thomas said in the interview.
In terms of Battery Performance Solutions, Gentherm’s solutions combine to protect batteries from temperature extremes, ensure safe transmission of power and accurately monitor both temperature and voltage. The result is improvements in driving range, extended service life and overall battery performance. The company builds cell connecting boards with its own proprietary Mechanical Structuring Process (MSP) technology, which can not only reduce manufacturing complexity, but also provides reliable, environment friendly and seamless flow of temperature during charging and discharging for battery performance and safety.
With the explosive growth of global electric vehicles market, Gentherm expects to grow its businesses. “Battery business is expecting rapid growth,” Thomas answered when asked about his vision about the battery business.
Innovation and cooperation
The most distinctive character of Gentherm, compared with other automotive parts suppliers, is its medical business, which bears certain correlation with automotive business. The reason why Gentherm keeps the medical business is that it can offer insights on human body, which can be applied to its automotive business segments. For this purpose, Gentherm also has a team dedicated to researching thermophysiology that is led by a thermophysiology PhD.
Apart from the above said in-house innovation, Gentherm also tries to build its ecosystem via cooperation with more partners to enhance its competitiveness.
For example, Gentherm and Datang NXP Semiconductors Co., Ltd. (DNS) have formed a partnership to work together to develop an all-new cell connection system. In terms of high capacity cooling, Gentherm also invested in Israel-based Carrar, whose disruptive cooling technology leverages thermodynamics which is expected to help enable fast charging and discharging.
The most recent investment Gentherm made is in Forciot, a Finnish-based technology developer of sensors for touch, motion and force measurement, which are likely to be integrated into vehicle interiors.
China and Europe
For electric vehicles, China is the largest single market with annual sales of new energy vehicles in 2021 surpassing 3.5 million units. One of the reasons for China’s leading position is the government’s policy to offer strong support for battery electric vehicles. “I think that was a great strategy and now you see the difference,” Thomas said, “The success is not only in cars, but also in battery making. You see CATL, Farasis and BYD Fudi in China and a lot of European OEMs rely on those battery makers.”
And Europe is catching up. Many European countries have introduced generous subsidies for not only cars, but also charging infrastructure installation, to accelerate the shift to electrification and carbon neutrality, Thomas said. And that push turns out to be effective. In September 2021, the Tesla Model 3 became Europe’s best-selling car overall for the month, outperforming such internal combustion vehicles as the VW Golf and Renault Clio. Matthias Schmidt, author of the European Electric Car Report predicted that the market share of electric vehicle sales in western Europe will reach 11% in 2021, a new record which will be much higher than originally forecast.
Tina Zhou's interview with Thomas Stocker
China is very important to Gentherm, Thomas emphasized in the interview. Firstly, China is the largest automotive market in the world and is the biggest market to Gentherm’s many customers. Secondly, China’s consumers, especially young generation, are more willing to embrace new technologies. “To introduce new technology, China is a very good market.”
The following is the transcript of the interview between Gasgoo CEO Tina Zhou and SVP Gentherm Thomas Stocker.
Tina: Can you give us a brief description about Gentherm and the fields you are involved in?
Thomas: Absolutely. As you know, Gentherm is a public and global company. We have several business units. Our core business is our Automotive climate and comfort business, which we have for decades. Gentherm is leading the global market of seat heaters, steering wheel heaters, heated interior around the driver and passengers, and cool seats, like ventilated seats, active cool seats. That's our biggest business unit.
And then we have a very innovative business unit. It's Digital Interiors, main product is called ClimateSense™. It's a microclimate system, providing really individualized comfort and climate. Then we have battery performance systems where we are purely focusing on the battery market.
The overarching is electronics and software. We develop and manufacture all our electronics by ourselves. We have manufacturing sites in China for electronics, but also in Mexico.
Last but not least, we have medical business. It provides us a lot of insights of the human body. We utilize the knowledge for our automotive business.
We have around 11,000 people and very international footprint. I would say the distribution of the people is equal.
Tina：How about the business units you are in charge of?
Thomas: My title is senior vice president of digital interior and battery performance systems. I think battery performance system is pretty clear. That's really everything related to battery vehicles. Digital interior is about electronics and software and ClimateSense™ product. That is my business. I 'm leading the more innovative business, like all the new stuff about batteries, energy consumption, and developing a full system, not only components.
Tina: The past two years are not easy. We were facing worldwide challenges like the COVID-19, chip supply shortage. But Gentherm still did a very good job. What were the major contributors to that?
Thomas: Thank you for recognizing that. I can tell you we could have done a much better job without the crisis. Some customers ordered a lot parts, but in the end, they didn't pick it up because they had material shortage and they were not able to produce the cars. So that's why our revenue was lower than it could be. But you are right that we have outperformed the market.
The reason is that our products, which are easily to be integrated in the car. They are kind of affordable but provide a huge benefit to customers. Our customers, the OEMs, they had to reduce the volume of cars because they had not enough parts, but they have increased the content per car. They now buy far more cars with steering wheel heaters or ventilated seats or heated seats than before. In terms of take rates per car, the crisis really benefits us.
And then, on the other hand, when people are not allowed to travel. A lot of companies just trusted their suppliers they had. Lots of customers said, “This is the most professional setup we have seen since the crisis. We try to involve them, even though we cannot see them quite a bit and ought to show them which kind of innovations we develop.” When they invest in us, they invest in the future also for them. So I think that was the reason why we were really able to outperform our competitors.
Tina: Now the key word globally talked about is the carbon neutrality. What's the influence you think it will have on the global automotive industry?
Thomas: That is tough, right? I strongly believe this is a huge impact on many industries, not only to the automotive industry. And that will make a huge difference.
But now let's focus on automotive. First of all, you have transmission. At the moment at least, it's not carbon neutral. You have diesel, combustion engines. There is a strong trend to battery vehicles. But if you have all battery vehicles and your energy comes from carbon power plants, it makes no difference. You're still not carbon neutral.
So that means in the entire energy generation sector, there must be a huge push to reach that. A couple of years ago, it was a lot of talking about that, but no clear legislation rules. That has changed now in many countries. For instance, in Europe in 2050, the entire European union wants to be carbon neutral. I would say it's huge. It's not only carbon neutrality, but also sustainability in terms of material. Right now, we have a lot of requests from customers. And I believe that will move to other OEMs.
As a result, we need to reach out to our supply base and figure out where we can get recyclable materials, which has realized carbon-neutral production, and what we need to do to ensure everything we supply can be recycled again.
Tina: You mean the material?
Thomas: Yes. Material is just a simple example. It’s challenging for all carbon-neutral approaches, they shall take environment, customers, technology, legislation, energy, lifecycle assessment and other trends into consideration and act towards.
Tina: Since you're based in Germany, can you talk about something about the vehicle markets in Europe?
Thomas: It's changed within the last two years. Two years ago, there were not many battery electric vehicles in Germany. Now, almost every second house in my neighborhood has a BEV. This might be that special in that neighborhood. It's not everywhere in Germany, but the fastest growing segment is the best segment. Now you see them everywhere. I bought my first BEV this year in spring. That's our private car. And my next company car will be also a BEV.
And in September, for instance, the Model 3 from Tesla had higher sales numbers than the Golf from VW. Suddenly, a BEV was selling better than the Golf. I think that is what happening in Europe quite a bit, and not only in terms of cars, also in terms of infrastructure and battery manufacturers.
Tina: Actually, it's the same situation in China right now. More and more people prefer EV than ICE. What's the difference and similarities between the European market and China’s market based on your point of view?
Thomas: First of all, China is definitely ahead in that regard. I have lived in Shanghai for a while and I was always in touch with the Chinese market a lot in the past and also now. I have seen the market developing. I introduced the first navigation system, for instance, in China for BMW so that's why I’m quite familiar with the Chinese automotive market.
So long time ago, Chinese government decided to invest in BEVs. I think that was a great strategy and now you see the difference. There are so many cars and startups in China. But you see the success not only in the cars, but also in battery making, which is part of the automotive industry. It's like making engines in the past. You see CATL, Farasis, BYD Fudi and many others in China. And a lot of European OEMs rely on those battery makers. So that's why China made its way into a successful automotive nation. I believe that was a huge advantage for China.
Here in Germany it was much later. Because the industry said, “Hey, we have great business and what we do is perfect. The world loves our cars. Why should we change that and invest billions?” But a couple of years later, they said we have to do that. It took a while. But now, if you see the new models coming from Europe, especially the German OEMs, they are impressive. They have the same quality and comfort standard as the original models or even better. Europe is catching up quite a bit in that area, especially with the premium cars. And strong push from government with subsidies also helps.
Tina: For the mega trend of the electrification, what kind of product portfolio Gentherm offers?
Thomas: First of all, we have a huge benefit compared to other automotive suppliers. Our products are mainly transmission agnostic. What does it mean? For Seat Climates Control products, it doesn't matter whether you have it in an electric vehicle or in a combustion engine vehicle. That's why we have a lot of products for that.
In addition to that, you can use our standard product to save energy in the cars. That means when we put our product in the car and build a system, which we call ClimateSense™, especially made for one person or a second person. It's personalized and controlled by your smart algorithm, and machine learning. We learn how you use your car, which temperature you like, what means comfort for you, when you feel comfortable. And with that, we can control the HVAC system to reduce the power consumption and save a lot of energy. So that is one product.
The other one is really our battery performance systems. This is completely dedicated to battery systems. We are building cell connecting boards, so connecting all the cells in the car with our proprietary connecting technology. Only we have that. It saves money and the weight in a car.
In addition to that, we have battery Thermal management solutions. And we have also developed for Daimler. We won the PACE award based on our Battery foil heating system developed for Daimler.
Tina: There are different technology roadmaps in EV market. Do you change your products for different segments?
Thomas: We do. We have products completely dedicated for battery cars. The others we develop include two pieces. One is enhancing comfort while the other one is increasing energy efficiency. We have an award already with a big global OEM in building that microclimate system.
In terms of battery systems, we are investing into startup companies quite a bit. We are investing in high-capacity cooling, for instance, with an Israeli based company. And this is so performant that you could charge a huge BEV within 5 to 10 minutes.
We are cooperating with Datang NXP in China. They are developing the micro controller; the cell and we do all the applications. We install it in the battery, in the cell connecting board, getting the data out and making the battery safer, providing them a longer life, and give the battery designers an idea how they can design the battery in a better way so that you have more range. To keep the battery under control is one of the hottest topics because mechanisms in battery are very conservative. It's kind of sensitive. And we try to enhance that.
Tina: That's very important. For the battery performance solution, what's your vision in this promising market?
Thomas: On the high level, we want to grow our business. We will not only double the business, but also expects to see it multiple. We are working together with many Tier 1 suppliers and OEMs now. We are investing a lot, in terms of people, technology, but also in terms of size.
What we have done last year was investing more in China, building up the team in China, and South Korea where many battery manufacturers come. We have also ideas of other products. You will see more from us. It will be one of our main pillars in the future.
Tina: It’s full of huge potentiality. We also see that such megatrends as electrification, intelligence, and light weight influence the interiors at the same time.
Thomas: They do.
Tina: Can you share with us some more information about this change?
Thomas: Just one example customer here. They are really reaching out to us and tell us their vision of the future in the interior.
They are approaching us and ask “how would you do that, what is your vision for the future of the interior, and in other regards”. And a lot of those areas are touching the megatrends, including lightweight. We can reduce some common components to be more applicable and lightweight.
That's a trend of the lightweight to take material out of existing components. And you saw it in the offices. Office chairs in the past are thick and heavy. Now most of them have only a net. And you will see the trend in a car. Of course you don't have the flexibility which you have in office chair, because there's also safety requirements. And our products need to fit into those seats. That's why we are working constantly on our current products to improve them, to keep the same performance level with less material, for instance.
And also, our microclimate system. I take a running project as example. The target is to eliminate the second-row HVAC system for big cars, because they have two HVAC systems. The target is really to eliminate it completely with our system. That means we can enhance energy consumption and reduce weight at the same time and keeping comfort at the same level or even increase it. It's a pretty good recipe. You can keep comfort, save energy, reduce weight and cost at the end.
Tina: It sounds a little complicated to control all of them.
Thomas: It is, but that's also the reason why we hire quite smart people in the company. All our new hires are from different industries and providing more insights than we ever had. For instance, Gentherm has a team dedicated to researching thermophysiology and the team is led by a PhD in environmental physiology and ergonomics. You would never think about that supplier like Gentherm would have employees like this.
What we want to do is not only to make thermal control to people but also looking into what is the impact to your body. According to that, we can really push energy to areas where you need it. It's a challenge, but we love it. We love challenge, and that's great.
Tina: Actually, the customer likes what you are doing. Because more and more people treat their vehicle as the third living room. They have more and more requirements on the comfortable environment. You just mentioned at the very first beginning that Gentherm also have medical business. So someday there will be some connection, right?
Thomas: That's exactly the direction we are heading to. One example is that in the past there are a lot of assistance systems outside the car. The next level was to do autonomous driving. For this, the industry needed to build a model of external environment. And you build the model when you merge all sensors. That's called sensor fusion, then you build the model.
And our vision is to build that senor fusion in the interior. And for every individual, you understand what a person needs at a certain moment. And we want to have the car learning about the passenger. We will be connected to the clouds and build up personal file. Of course it's all confidential. Nobody else can access it. But we understand you every time you drive a little bit better.
And then we will also introduce sensors to monitor the biometric data, heart rate, respiration rate, and so forth. And now it comes also through thermal physiology. It's medical science. This is what we want to use in the car. It takes a little bit time, but it's very exciting. There's a lot about what we are planning to do over the course of the next few years.
Tina: Sounds we are going to enter an IoT world.
Thomas: I would say so. Many cars are connected already. But this is more like the usage of the connection to build that environment. And if you buy a new car, then your profile might travel with you to that car. The memory will travel with you to other cars and maybe to rented cars. And seat settings, radio stations, temperature, and so forth would have been adapted, maybe even before I enter the car. It is personalized and learning.
Tina: Let's talk a little bit about the ClimateSense™. What's the major feature and advantages of that? How about the application in the current market?
Thomas: You can compare ClimateSense™ to a cocoon of your private area of comfort, and your neighbor, your passenger might have a completely different one. We put everything together, build a model of all those factors and have sensors in every factor to understand your current stage, whether you feel comfortable or you're still cold or hot. We can use our algorithm to tell the vehicle what to do. You don’t have to control every temperature. Where should have the warm air. Is it feet? Is it face? Is it body? This is what our systems do for you. This is what we are going to introduce in 2024 with an OEM.
ClimateSense™ is a benefit, but it's also a challenge. It is touching several domains in the car interior. But the current situation with OEMs is that they have somebody responsible for seat. Then they have another person responsible for a door and they have a person responsible for the dashboard, another person responsible for electronics. ClimateSense™ is touching all of them. And that is our challenge, because we have to talk to different people.
It's not always easy to bring them under one umbrella.
The next step which I call ClimateSense 2.0 will merge many sensors in the vehicle to control sound, lights, but also fragrances.
Tina: For different departments of OEMs, it's hard to negotiate for them to agree on the same solution. Is there any change now? Based on our understanding, at least in China, those newcomers are very eager to embrace the new technology.
Thomas: Tina, you are absolutely right. We see that too. The new comers come from a different approach. They come more from a functionality approach. They say I’m in charge of comfort. It’s not like I’m in charge of seat. Because comfort for passenger means more than just having a comfortable seat. But I also have to admit more and more of traditional OEMs understand what the newcomers do different. And now they announced also one person in charge of comfort.
Tina: The situation is changing fast.
Thomas: It is changing.
Tina: The vehicle has become a combination of various high technology now and the boundary of the industry has become obscure. More and more new players are coming. And how Gentherm keep your leading position in such an environment with fierce competition?
Thomas: In the past before Gentherm, I was working very closely to those other industries. I was always close to Intel, NVIDIA, QUALCOMM. And they are now not only just microprocessor provider. They provide ecosystems. We use other industries like AWS, the amazon cloud. We cooperate with those companies quite a bit wherever it is possible.
So that's why we cooperate with Datang NXP for instance, and with high capacity cooling company Carrar. We are developing together with them advanced sensor systems. They come out from different industry.
A huge change at Gentherm in the last couple of years was to open doors to corporations. As I said, we are bringing in people with different mindsets from different industries. That's why I think it's kind of a natural movement within the company step by step.
Tina: In your business units of the digital interior, battery performance solution as well as the ClimateSense, what's the role of China’s market?
Thomas: China, for us, is extremely important as it is for our customers. China is, for many customers, the biggest market. And it will be also in the future.
What we see in China is that the take rate of our products is, in most cases, lower than in other parts of the world, which is kind of interesting, because I know that Chinese people love comfort and warm. We are working to improve that.
On the other hand, I think China is very adaptive to new technologies. It was always “hey, let's do it”. So that's why I believe to introduce new technology, China is a very good market.
Tina: We see that China’s market, especially the younger generation, they are eager to try the high tech and that they are easily to pay or buy new car.
Thomas: Exactly. It is the young generations that they adapt faster, because they were always confronted with a lot of new technologies. We too. But for us, it's more like a challenge while for them it's natural. There's no hurdle. So that's why in China there are a lot of people who can afford such cars.
Tina: Any message for your Chinese colleagues and Chinese customers for the new year?
Thomas: I'm missing that personal contact a lot. I would love to see them in person again. Hope 2022 opens a new environment with much easier travel policies so that I can travel to China to meet colleagues and customers.
Wish everybody a healthy and successful 2022.
Gasgoo not only offers timely news and profound insight about China auto industry, but also help with business connection and expansion for suppliers and purchasers via multiple channels and methods. Buyer service:firstname.lastname@example.orgSeller Service:email@example.com