Connectivity and software-oriented solutions are making their way into modern vehicles that are evolving into electronic devices on wheels with the emergence of electric vehicles, ADAS, and autonomous driving technology.
Bosch restructured its Mobility vertical in January 2024 to incorporate this change. However, it is not ready to write off the traditional, ICE market yet, as electrification will happen in phases, says Dr Markus Heyn, Board Member, and Chairman, Mobility business sector, Bosch.
How do you foresee the future of ICE powertrains? What is Bosch’s technology roadmap going to be?
ICE powertrains will continue to remain relevant in several markets, including India, for quite a long time in the future. Although the BEV technology was well received initially, range extenders or hybrids are now regaining traction. When we look at the phenomenon of range extenders or hybrid vehicles, we see them offering immense potential in the future. Today, they have a higher growth trajectory than BEVs, and are categorised under New Energy Vehicles in China. While they started on a very small base, they are now ramping up very quickly. The phenomenon is making a comeback even in markets like the US, as well as is showing a resurgence in Europe, where hybrids were declared dead two years ago.
Therefore, while we will certainly go towards electrification, it will happen in steps. This is because the projections about EV penetration made three years ago were significantly different as compared to what we are witnessing today. Hence, while we are convinced that [while] electrification will make its way, it will not be a linear transformation. And the key reason behind this is that the development of EV infrastructure has not occurred at the pace that it should have, if, for instance, it were to support a fully EV fleet in a few years in Europe.
Therefore, at Bosch, we have decided to remain technologically open, combine various technologies in a smarter way, and offer compelling solutions to our OEM customers. We will continue to invest in combustion engine technologies, but will always filter it out [on the] basis [of] whether it is a completely new platform, or an adaptation of an existing technology.
In this regard, we will align ourselves with the direction being followed by our OEM customers. For instance, if an OEM is investing in a new hydrogen-ICE powertrain, or demands an upgrade of an existing powertrain, we would consider taking it forward, and therefore, will continue investing in our competence in ICE and will not let it die.
What is Bosch’s investment roadmap for R&D to accomplish its vision of a software-defined Future?
In alignment with new Electrical / Electronic (E/E) vehicle architectures being worked upon, there is a need for a significant amount of R&D investment going forward. While we are already spending heavily on R&D, we will continue to do so if we can generate sufficient profits to afford it.
Furthermore, on the software front, we benefit from our extremely competent and large software team in India…It is an asset for us in the ongoing transformation, and we would like to make use of it. Our OEM customers in India know this fact particularly well, an therefore are in close touch with our software development team stationed in Bengaluru. The Bosch Global Software Technologies unit headquartered in India is a key asset for us in this mobility transformation.
I am absolutely convinced that working with Indian OEMs in India is the recipe to success, as they clearly understand the needs of the Indian market. That is why we try to focus on undertaking R&D projects with Indian OEMs who are also willing to collaborate with one another. This is a big advantage which helps reduce the R&D effort, and accelerates the speed of innovation, while allowing development with lesser resources.
On the other hand, from our perspective, we anticipate continued innovations in hardware as well. We come from the world of hardware with embedded software, therefore whoever thinks the future is software-only, is mistaken. If a company is coming from the electronics world, it clearly has experience in hardware, and for Bosch, that is one major advantage, as one influences the other.
Can you elaborate on India’s place in Bosch’s global scheme of things?
India is a very special market for Bosch, and it has now developed its own dynamic, which, in my opinion, is outstanding. Like we had a very dynamic market in China with its own characteristics and customer-oriented vehicles, we see a similar development currently happening in India. We are traditionally very well positioned in India, both in terms of production and product development, and are still able to meet the requirements that are currently being set in the Indian market. We are convinced of seeing further progress in software over the next five years in India, and we clearly see our Indian customers working with us in this direction. Every OEM must respect its legacy, and must maintain it, and therefore, when one switches to the next architecture, it must have a plan on how to keep the existing architecture alive.
An increasing number of India-specific software architectures are likely to come to the market in this timeframe. We will make all efforts to grow in India, and we believe we are in a really good position to excel further, if we do it the right way.
What does Bosch’s recent Mobility business restructuring entail for the company as it eyes opportunities in Software Defined Vehicles?
In the past, the Mobility sector within Bosch has been categorised under various divisions — steering, braking, and powertrain, among others — because initially our OEMs demanded respective systems out of each of these domains. Therefore, this setup was completely relevant, considering the market requirement up until now.
However, as we see an S curve of transformation with a step into the future, there are several demands emerging, such as that for complete software packages without any hardware and vice versa. Most importantly, we continue to get OEM requests for solutions that partially span across the traditional domains of steering, braking, et al. Hence, we have decided to renew our setup, and emphasise upon these umbrellas.
We have now established new divisions such as semiconductors, ECUs, high-performance computing, as well as software and services, that span all domains. We are glad that already in the last one year, a significant portion of new demand has come for products from these verticals. Therefore, for us, it is now much easier to cope with this changing demand, and offer reasonably good solutions to our customers.
Regarding our future ambitions, we intend to put our resources behind emerging technologies such as electrification, automation, semiconductors, computing solutions, as well hydrogen, among others, and that is the strategy we aim to leverage going forward. We also intend to [take such] steps in India, as well as other regions, as we feel it is good to have a similar setting across all regions.
This feature was first published in Autocar Professional’s July 15, 2024 issue.