By Karina Schultz, Head of Marketing, dynamics – powered by MHP
Making ‘green’ in Green tech: The economic, political, and environmental benefits of shifting to sustainable mobility
Planes rolling out of the hangars at the historic Tempelhof Airport in Berlin are a thing of the past, yet a look into these hangars offer an inspiring glimpse into how we’ll move in the future. Autonomous air taxis, 3D-printed bikes, electric motorcycles, and foldable ebikes – this is only a small fraction of the futuristic products exhibited at Greentech Festival – the first of its kind and the place to be for everyone interested in making sustainability a fundamental pillar of technological innovation.
Inaugurated by the former winner of Formula 1, Nico Rosberg, the two-day conference focused heavily on the theme of mobility and transportation, covering every mode from planes, to trains, to ships, bikes, and cars. Every aspect of mobility has an inextricable impact on our environment, so we cannot think of entrepreneurship in this sector without considering the ecological consequences. The alarmingly real effects of climate change are not just going to be an issue for future generations, but are already perceptible today, which is why events like these are so important to highlight the people, companies, and ideas making positive ecological progress around the world.
Especially in the automotive & manufacturing industries (where I work), building or growing a business and ensuring its longterm future is impossible to do unless sustainability is at the core of its company strategy. There is simply no long term future for a company without a solid environmental strategy, which is why we need to focus on investing in those ideas that will promote sustainability within mobility. To do exactly that, 60 thought leaders, entrepreneurs, and business representatives came together at the Green Leaders Conference to discuss cross-industry technological innovations and the global political framework that is incentivizing industry leaders to move faster toward a greener future.
Customers are driving the shift toward sustainability
The effects of man-made climate change are leading to widespread awareness (for the most part) and alarming concern. What needs to happen now is a paradigm shift to rethink the way we live and adapt our consumption accordingly. Cost and convenience alone are no longer the main priorities for consumers & drivers of product innovation. Innovation should strive towards sustainability, not only to do the right thing and ensure a better future but also to prevent companies suffering huge financial losses and even having to adapt their supply chain and products with every binding update to environmental legislation. We’re entering a phase where sustainability is in everyone’s financial interest.
An entrepreneur bringing his or her green technology to life today will automatically have to work within this paradigm shift. By its own nature, the concept of “green tech” encompasses the technologies, products, services, and business models that work to reduce (or better yet, reverse) the risks and impact of climate change. Going to market now with an environmentally-conscious product or service gives companies a huge advantage over competitors that may have started just a little too late or not at all. Just ask Kylie Jenner.
The B2C world shows the growing trend that customers are striving more and more towards buying green products. “Purpose is the new luxury”, as Cyrill Gutsch, CEO and Founder of Parley frames it. Parley joined forces with Adidas to create a shoe that is made from processed ocean plastic. The overwhelmingly positive response from consumers toward these shoes (and many, many other clothing items made from recycled materials) showed a dramatic change in the perception of luxury: repurposing waste for fashion is (becoming) super sexy – and profitable.
Challenges of innovating within a set political framework
But aside from B2C trends, the shift towards sustainability is not only an individual choice, but binding environmental legislation in the political framework is also a big factor in driving companies to adapt their products, processes, and supply chains. In the Paris Agreement of 2015, 195 UN member states agreed on aiming to limit the increase to 1.5°C and keeping the increase in global average temperature to well below 2°C above pre-industrial levels. By now, scientists agree that these predictions were too conservative and temperature averages are rising at a rate twice as fast as previously estimated.
“On the European level, we will push for clean, safe, efficient, and inclusive traffic,” announced Violeta Bulc, European Commissioner for Transport on the aim of the EU regulation to reduce emissions from passenger cars to an average of 95 grams of CO2 per kilometer by 2021, which is among the strictest targets worldwide. Each car maker has the responsibility to ensure that their vehicles and fleets meet these standards. If they fail, they will face a penalty of €95 per gram above the limit – multiplied by the number of vehicles in the fleet registered in the EU the previous year. That can add up quickly.
“The lone wolf dies but the pack survives”
With 2021 just around the corner, carmakers find themselves in quite a pickle. While the EU emissions targets are indisputably a move in the right direction, auto manufacturers are faced with gargantuan operational overhauls, extremely tight deadlines, and potentially astronomical fines if they don’t succeed.
The CO2 limits are definitely stressful – but are they manageable? Echoing the overall tenor of Greentech Festival: no matter where and how we move, the shared goal of sustainable mobility will only become reality when different players join forces and leverage each other’s strengths to offset their weaknesses.
“Cooperation is key!” Michael Sheren, Senior Advisor Bank of England reassures in the panel session on Financing the Green Future, even if it’s only between big companies like BMW and Daimler. In this case, their loving rivalry has motivated the competitors to always strive for building superior products and now has been institutionalized in the form of a rather unexpected cooperation.
And even in the finance sector itself, where banks have historically been very self-sufficient, “cooperation is needed and extremely beneficial,” as Philipp Rickenbacker of Bank Julius Bär states. The Swiss private bank, for example, expanded its portfolio together with startup SEBA Crypto to offer its customers access to new services for digital financial assets and stay on top of the game.
In order to always keep up with customers’ needs, to strive for sustainability, and to reach defined goals under a tight deadline, you need to have the best of both the startup and the corporate worlds. Even though cooperations between startups and corporates can feel like dealing with speedboats and tankers. Tanja Kufner, Partner at MHP – a Porsche Company and moderator of the panel session, appeals to leave stigmas like this behind:
“Big companies need to collaborate more with startups. They may not be made to work together, but they absolutely have to try.”
Looking at the carmaker’s conundrum of having to quickly adapt to CO2 emission standards, it becomes clear why the effort of collaboration is worth it. Staying with the mobility metaphors: tankers offer stability, are trusted with valuable goods and can be seen from far, far away, whereas speedboats offer fast-paced sailing and the flexibility to explore new routes without a big fuss.
When external factors like politically binding goals and short deadlines add up, car makers will at some point face a make-or-buy-decision.
Who could give better advice than an entrepreneur who turned a startup into a European market leader? Co-Founder of TomTom, Corinne Vigreux’s tip: “Don’t try to make everything yourself!”
She guided the company at the time when they were faced with the question of having their own satellites. TomTom deliberately focused on building software and, instead of producing the needed satellites themselves from scratch, they opted to buy from companies whose core business and reputation were manufacturing top-of-the-line satellites. This decision freed up valuable internal resources that were put toward their main product – making the best possible navigation software.
Startups leading the (electric) charge
Dr. Dirk Stenkamp, CEO of TÜV Nord, put it perfectly when talking about urban traffic:
“We not only need to have state-of-the-art technology, but we need to be ahead of technology.” As an established company, being ‘ahead’ requires involving those entrepreneurs and innovators who dedicate their careers to finding solutions that are beyond the imaginable.
A good example of this is Twaice, one of the startups we’re working with at MHP. At the Greentech pitch session, Twaice told the story of how they developed a product which could have a colossal impact on the entire electric vehicle market. Having been founded less than a year ago, they built a digital twin for batteries with predictive analytics software that increases battery life and reliability while reducing the costs of development and testing. Their claim is huge and illustrates exactly what is needed in order to make electric vehicles more commonplace than Diesel.
While we could name many more examples of this type of ‘revolutionary’ innovations, they frequently experience problems when entering a mass market. One of the challenges with such advanced technologies is educating the customer and making them understand the value of these products. To many established players, high-tech equals high-risk.
One of the goals at the start of our collaboration with Twaice was to widen the reach of the benefits of Twaice’s battery analytics suite, which will soon be published in a paper co-authored with MHP: “Der digitale Zwilling als Schlüssel zur ganzheitlichen Optimierung des Lademanagements in der Elektromobilität“ (The digital twin as the key to holistic optimization of charge management in electric mobility) as part of the Mobility scientific forum of the University Duisburg Essen.
It takes a village
When eyes are set on the same goal, cooperations like that are the best proof that startups and established companies can actually work together very well. Operating in the same ecosystem shouldn’t automatically result in rivalry – goals are reached a lot faster when working together.
Take Tier, for example. Lawrence Leuschner, CEO of the e-scooter startup shared brutally honest insights from having to work with different stakeholders, in their case city administrations:
“We never go into a new city without talking to the city about aligning goals and common agreements. After all, the city has the responsibility to provide transportation to its citizens, so transport companies like Tier must be open to collaborating and partnering with the government”
The diversity of shared mobility services like scooters, bikes, and cars affects the public perception of a city, which is why it’s critical for stakeholders to be actively involved. Leuschner sees this as an advantage a local player like Tier has over incumbents coming from the outside: “Companies from the US often just come in and start operations – that ultimately backfires.” Knowing the culture of the market you want to enter and working closely with the lawmakers makes a huge difference.
Why electric vehicles might not be as clean as they seem
Shared e-vehicles aren’t automatically the most sustainable mobility option. If you put a car or scooter on the streets and it dies after a couple of months because of how it was treated by users, it’s counterproductive to its ‘eco-friendly’ claim. To really ensure sustainability, vehicles need to maintain a long lifetime.
What makes partnerships and cooperations in the transportation sector so important is that they will automatically affect every single human being across the world.
The trend of micro mobility is fueled by the drive to get cars out of the cities. Like many in this space, e-scooter startup Go Flash (soon to be Circ) strongly advocates for the removal of cars in urban traffic and offers other solutions to tackle the last mile. Cars take up way too much valuable public space in cities and most of the time, are only used for distances of less than 3km, which results in overcrowding and underutilization. Add the constant search for parking and you can see why the micro mobility trend has gained so much momentum at a global scale.
Yet another approach on how to clear the streets of cars is vertical take-off and landing (VTOL) aircraft. Fully electric, on-demand autonomous air taxis, like the ones developed by Volocopter and Lilium could soon be established as a new means of transportation. While Volocopter is focused on linking important hubs within a city and relieving the streets of car overpopulation, the Lilium Jet, with a velocity of up to 300km in just 60 minutes, hopes to also connect different cities with each other.
From increasing micro mobility and decreasing the usage of cars, from (renewable) electrification across the board, and even taking to the air, the ways in which technology can work toward making mobility more sustainable are as diverse as the people using transportation. Mobility affects everybody – as will all these innovations trying to make traffic and transportation more efficient, accessible, and sustainable. Innovating at such a large scale simply cannot be done by only a handful of players acting alone. We must consider the effects on all stakeholders for cooperations to truly be considered mutually beneficial.
Nico Rosberg himself showed us what joining forces could look like with his recent investment in Tier Mobility. “We have the same mission,” explained Tier CEO Lawrence Leuschner about Rosberg’s financial interest.
Focused alignment at a large scale – this is ultimately what can drive us all toward a sustainable future.
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