Continental AG, a global auto-parts supplier, will no longer invest in parts used in internal combustion engines, the latest sign that the automotive industry is being forced to respond to increasingly strict emissions laws.
Instead, the company said it will put more focus and capital on the electric powertrain, which it believes is the “future of mobility.”
“Our customers are increasingly and consistently turning to the electrification of combustion engines through hybrid drives as well as to pure battery-powered vehicles,” said Andreas Wolf, head of Continental’s Powertrain division, which in the future will operate under the name Vitesco Technologies with Wolf as CEO.
大陆集团动力总成部门负责人安德里斯·沃尔夫（Andreas Wolf）表示：“通过采用混合动力系统以及纯电动系统，我们的客户正越来越多且持续地转向电动发动机。” 该部门未来将成立独立公司 Vitesco Technologies，而沃尔夫将担任 CEO。
This shift toward electrification is being driven by tighter regulations around the world. Cities are clamping down on the use of diesel- and gas-powered cars, trucks and SUVs in urban centers and states like California are tightening rules to meet air quality and emissions targets to combat climate change. China has placed restrictions on gas-powered vehicles and provides incentives to electric ones. France wants to end the sale of fossil fuel-powered cars by 2040.
全球各地日益严格的监管推动了向电气化的转型。许多城市试图控制在市中心使用柴油和汽油驱动的小汽车、卡车和 SUV。在美国，加州等地正在收紧监管，以达到空气质量和排放目标，应对气候变化。中国也在对汽油车作出限制，同时针对电动车制定激励措施。法国则希望到 2040 年结束化石燃料汽车的销售。
And automakers are following. Volvo, VW and others have announced plans over the past two years to increase sales of electric vehicles and move toward more electrification throughout their portfolios of existing vehicles. Electrification can mean hybrid, plug-in or all-electric vehicles.
There has been plenty of speculation and attempts to predict exactly when — not so much if — a tectonic shift to electric powertrains would occur. Suppliers have grappled with the “when” part. Putting too much capital too soon toward developing automotive parts can saddle a supplier with inventory and mounting costs.
What’s happening at Continental is starting to play out within the rest of the industry. If companies like Continental want to survive and keep up with the demands of automakers, they have to act. But not wildly. Development costs for powertrains are, after all, no small matter.
Continental is making specific choices on what exactly it pursues. The company, for instance, will not consider producing solid-state battery cells in the future. Apparently the company was open to making an investment in battery cell production. But now the company believes the market no longer offers any attractive economic prospects for battery cell production for Continental, Wolf said.
What Continental is going to do is reduce investment in its hydraulic components business, which includes parts like injectors and pumps for gasoline and diesel engines.
“Investments in research and development and in production capacity for innovations are becoming less profitable,” says Wolf, explaining the reasoning behind this decision.
Continental will fulfill existing orders. New orders will “play an increasingly marginal role.”
This shift within Continental will likely extend over a number of years, as combustion engines essentially serve as the basic drivers for hybrid solutions, Wolf said. The company will also review its business in components for exhaust-gas after treatment and fuel delivery.
All of this translates into big changes within the company, including the technologies it decides to invest in, jobs and even locations of some of its operations. Continental said it will also consider partnerships.