According to Boisdequin, electrification, sustainability, and design will drive BASF’s automotive business in the future. Emission norms are changing rapidly, and it is now inevitable that the automotive sector shifts towards more environmentally friendly technologies and electrification with cost-effective solutions. BASF offers sustainable mobility solutions, from the automotive battery’s chemistry to lightweight components and heat management solutions.

Today, another larger responsibility of big companies is to bring transparency and to manage the sustainability in the supply chain. More and more, the automotive companies are selecting their suppliers based on the capabilities of a sustainable business model. “It’s not only about what products you can offer, but it is also how do you source materials, manufacture and deliver the products. And in that context, BASF wants to be a pioneer in being transparent with our information,” says Boisdequin.

BASF already offers customers products with reduced carbon footprint based on renewable energy during the production process or recycled raw materials according to the mass balance approach.

Further, the company runs the Product Carbon Footprint (PCF) programme, where it shares the carbon footprint details of all its products from the upstream chemicals to the delivery of the product to customers (cradle-to-gate). To that effect, BASF is the first chemical company globally with transparent emission data for the entire portfolio of approximately 45,000 products. Sustainability and digitalisation are core to BASF’s corporate strategy. By offering greater transparency regarding specific emissions for its product portfolio, the company can develop plans together with customers and make a sizeable impact on reducing the overall CO2 emissions the value chain up to the final consumer product.

“This enables our customers to achieve their climate targets and move further along their set ESG (environmental, social and corporate governance) goals, making them a better choice for increasingly discerning end-customers. This programme acts as one of the enablers to the company’s target of achieving CO2 neutral growth until 2030. By the end of 2021, BASF will be able to provide PCFs for its global portfolio. Customers thus will receive valuable information about the extent to which BASF materials contribute to the carbon footprint of their business activities and their final products,” said the BASF executive.

BASF aims to be more transparent and communicative to ascertain the positive impact of its products on the environment. “Hopefully with that transparency and discussions, the entire automotive industry can become more sustainable,” he adds.

The company will also bet high on its design capabilities to offer differentiators in both EV and IC engine-powered vehicles. The company offers a diverse portfolio of solutions ranging from coatings, catalysts, innovative materials for the interior and exterior of the car, automotive fluids, and high-performance cathode active materials. On top, BASF has established Creation Centers which offer expertise in terms of design and materials to customers in key markets. With these solutions, Boisdequin thinks that BASF is well-positioned to benefit from the emerging design trends in the automotive industry.

BASF opened its Creation Center in May 2019 in Navi Mumbai, India for bringing conceptual ideas into creative solutions. Apart from Navi Mumbai, it operates Creation Centers in China, Japan and Germany, and these centres not only cater to the automotive industry but also furniture, appliances and footwear industries, among others. Today, the Creation Center in India helps BASF move one step further, where the company can help define the specifications with the customers. “From what used to be a long list of specifications, customers now come to us with a design problem, and, together, we identify a design concept, establish the material specifications based on which we then propose a technological solution. With this comprehensive approach, we are able to assist our customers much more deeply. I do not see many of our competitors with this kind of capability in India. It really helps us to grow our business,” says the BASF executive.

Through the Creation Center, BASF has started working with some very interesting e-mobility and other mobility start-ups on some innovative design concepts including completing a virtual design workshop with a leading helmet manufacturer to design a Concept Helmet for Indian two-wheeler drivers with BASF materials in May 2020. The Centre has engaged with helmet and face shield manufacturers and is also exploring possibilities with furniture companies on how to make seats or the cushions more comfortable, longer-lasting, and sustainable.

Innovations and adaptions of new technologies are happening at a different pace globally. Though the adaptation of EVs is slow in India, Boisdequin thinks, it will pick up in the next two years. However, a bigger task is to offer an adapted innovation into the local context. The BASF executive again bets on the company’s smart business strategies and core competency that caters to diverse demand in the auto sector to offer more localised solutions.

“I strongly believe that a smart business strategy is one strategy that is diversified enough so that we can hedge our risk. But it should not be too diversified, because then you lose yourself in doing so many different things. So, I think having a strategy that is strongly founded on the core competency of the company is very important. You need to know what your core competency is and then you can try many things, especially around these core competencies. And that is exactly what we (BASF) are doing. We identified chemistry as our core competency, which will be an enabler for many of the innovations needed in the automotive industry. It does not matter for us, which direction the industry is going as long as we can leverage our core competency and expertise to help our customers. It is not about us who is driving the market, we respond to customers,” explains Boisdequin.

For BASF, the growing penetration of all types of vehicles, new regulations for safety and emissions, industry-friendly policies, and the emergence of India as an export hub on attractive cost positioning and technology capabilities for the automotive industry will drive the business growth in the country.

There is also tremendous scope for increasing chemical content per vehicle in India, thinks Boisdequin. Explaining it further, Boisdequin says, “When we look at the chemical content per vehicle typically, a western car manufacturer in Germany, let us say, has a chemical demand of about 500 Euros (approximately of INR 40,000), while in India, the chemical content per vehicle is only a fraction of that. There are a lot of opportunities for us to increase the penetration of chemicals in the automotive industry, whether it is with innovative catalyst systems or new functionalised materials for the interior and exterior,” says Boisdequin.

For the Indian market, Boisdequin thinks, two and three-wheelers with both swapping and plugin options, cargos in last-mile space and buses on fixed routes will have faster growth for electrification. “Infrastructure is also slowly being built for the passenger segment. But electrification will happen segment-wise,” adds Boisdequin.

As part of its carbon footprint reduction programmes, BASF globally is focusing on reducing dependency on fossil fuels by emphasising on recycling materials and developing alternative resources for feedstocks. The company is engaged in the recycling of metals from used batteries and use into battery materials production. It is also focusing on developing and scaling-up green hydrogen produced from renewable energy sustainably.

On the battery side, challenges such as driving range, charging time, safety and cost have been there for a time. Yet, as per Boisdequin, there has been still a lot of scope for innovation in the EV battery space and all the challenges are being met step by step. BASF has launched high nickel or high energy cathode materials that are being utilised for fully electric vehicles. “We will keep on developing the next generation of cathode materials. A lot of customers talk about solid-state batteries, where we can replace the anode materials with a solid lithium metal anode, or also replacing the liquid electrolyte with a solid material. All that will require a significant amount of research and development. And we are part of all this.”

For recycling, in Europe, the company has partnered with companies, (Eramet and Suez) to collect and dismantle used batteries and to extract the metals. In Finland, the company has recently entered into a partnership with Nornickel and Fortum to refine valuable metals in lithium-ion batteries to be used into the precursors for the cathode materials. “Yeah, it is a lot about the spare batteries, how do we extract the metals from the batteries, how do we purify them and make them ready for use in new batteries. Such work is best done in partnership with experts,” said Boisdequin.

Safety is gaining its importance via new regulations and the growing awareness of customers, which will pave more business opportunities for BASF. “Safety is becoming one of the main factors that influence a vehicle buying decision in India. Today people are looking into safety ratings. For us, it is also a huge opportunity, because a lot of those safety components require chemical solutions, whether it is coolants or brake fluids, or plastic components for the bumpers. In Europe, a couple of years ago, the pedestrian protection law was implemented. It requires car manufacturers to install a bumper stiffener and that application is typically made from engineering plastics. Similarly, every airbag housing offers some content of engineering plastics. The seat belts require different kind of plastics, whether it is polyamide or polyacetal. I am very pleased that the Indian customers are demanding for safer vehicles and the Indian Government is also promoting regulations in that space, and as a chemical company, we will fully benefit from this,” says Boisdequin.

Boisdequin also urged the Government to look into GST and taxation for vehicles in India. “I still believe vehicles are treated as luxury goods in India, and it attracts high GST and other taxes. I think the Government needs to review the current tax structure in the industry and to calculate what would be the sweet spot between earnings per car at current tax levels vs earnings on more vehicles being produced and sold in the market at lower tax rates. The multiplication effect of the automotive industry on the economy is significant and could be better leveraged than it is today,” said Boisdequin. (MT)