In an interview with AEEmobility, Holger Schwab, National President of Valeo Germany, explains how the company ensures technological independence for drives, the role played by flexible development and production structures – and why location loyalty and global cooperation are not a contradiction in terms at Valeo. Schwab talks openly about the challenges posed by rising energy prices, the necessary political framework conditions and the opportunities for Germany in the competition for the next generation of software-defined vehicles.
AEEmobility: Mr. Schwab, Valeo is increasingly focusing on electrification in Germany – both in the low-voltage and high-voltage sectors. What technological priorities is Valeo currently pursuing in the electric drivetrain?
Holger Schwab: charger, DC/DC converter, power distributor, electric motor and transmission. We are not only able to fully integrate these systems, but also to ensure that they are optimally integrated into the vehicle. This is one of our key areas of expertise in the powertrain sector.
A second focus is on onboard chargers. Our modular system covers outputs from seven to 22 kW and currently offers the highest power density on the market. In addition, our systems are already designed for bidirectional charging capability, which will become standard in the future.
The third, no less important focus is software. It plays a central role in increasing the efficiency of the drivetrain, particularly in temperature management and the integration of subsystems into the overall vehicle. Through optimized software solutions, we contribute directly to increasing the range – a good example of this is the Mercedes EQS, which was recently awarded the title of world range champion and for which we supply key components.
To summarize: Our strengths lie in the complete integration of powertrain systems, in high-performance onboard chargers and in intelligent software. We also offer our components individually, depending on the strategy and needs of our customers.
Holger Schwab has been National President Germany at Valeo since April 2024 and is responsible for the French automotive supplier’s business in Germany in this role. At the same time, as Vice President, he is responsible for Power Drive Europe Regional Operations – the business area for electrified drive systems.
In previous interviews, you have emphasized the importance of technological independence in drive systems. How does Valeo manage to develop drive solutions that can be used flexibly and scalably for both purely electric vehicles and hybrids?
The demand for different drive technologies is becoming increasingly important. That is why we at Valeo have positioned ourselves in such a way that we can cover the entire market demand for combustion engines, battery electric vehicles (BEVs) and plug-in hybrids (PHEVs).
Our strategic orientation shows that we set the right course early on – a clear advantage over many of our competitors. With the joint venture with Siemens in Erlangen, we invested in high-voltage technologies at an early stage. At the same time, we have a comprehensive portfolio of 48-volt and 12-volt systems. Our plants are also designed in such a way that we can react flexibly to fluctuations in demand – as long as they remain within a reasonable economic framework. The early integration of our development and production structures creates synergies on two levels: On the one hand, development resources can be flexibly shifted between low-voltage and high-voltage projects, depending on where market demand is stronger. On the other hand, our production facilities are managed in such a way that they can switch efficiently between different technologies as required. This puts us in an ideal position to respond flexibly and quickly to changes in the market.
How flexibly can you adapt to different OEM vehicle architectures? Does this still involve considerable development work that has to be carried out individually for each OEM?
Of course, we see both – individual developments and standardized solutions – but we deliberately focus on our modular construction kits. This enables us to flexibly optimize both performance and installation space, depending on how customers specify their vehicles. In practice, it has been shown that modular systems are usually the more economical solution, as a completely new development for each customer would require considerable resources and high costs. This is why we have developed a clear product strategy: Our modular kits have a modular structure – both at the level of individual subcomponents and for complete e-axle systems. We have been very successful with this approach and will continue to pursue it consistently in the future.
Because we were one of the first suppliers on the market, we were able to gain valuable experience early on and go through important learning loops. In doing so, we realized how crucial standardization, especially in terms of software, is for long-term success. Today, we use this experience as a clear differentiator – not only in the field of electrification, but also, or even more so, in future technologies such as autonomous driving and driver assistance systems. Over the years, Valeo has built up outstanding software expertise that is unparalleled in the industry and gives us an important competitive advantage.
As you mentioned, you can also react flexibly to market requirements in your plants. How can we imagine this in concrete terms?
Our structures have grown organically with the development of electrification on the market. At the same time, we have gradually built them up so that we can react flexibly to changes – for example, when other components are in greater demand. For example, we are currently seeing higher demand for 48-volt hybrid systems than originally expected. However, thanks to our flexible positioning, we can easily meet this demand.
Despite all this flexibility, one thing remains central: at the end of the day, it is people who work in production and development. Every market change affects not only machines or processes, but also jobs. That is why it is not enough to simply make production capacities flexible. It is also about building trust – through reliable technologies, but also through stable political framework conditions. What industry urgently needs today is predictability and planning security. Unfortunately, there is currently often a lack of clear political signals and reliable support. Many of the fluctuations we are confronted with arise precisely from this lack of stability.
The „Predict4Range“ software optimizes heat management in BEVs using real-time data such as outside temperature, route profile and vehicle parameters. This allows the range to be increased by up to 24%. (© Valeo)
In recent months, many competitors have reported job cuts and restructuring measures. Can you tell us what the situation is like for you at the moment?
Es gibt derzeit ein europäisches Anpassungsprogramm im Bereich Power, das im Wesentlichen Werke in Frankreich betrifft, in Deutschland sind rund 50 Stellen betroffen.
Allerdings unterscheidet sich unsere Situation deutlich von vielen Wettbewerbern. Wie bereits erwähnt, haben wir frühzeitig begonnen, Synergien zwischen verschiedenen Technologien zu nutzen und unsere Ressourcen strategisch auszurichten. Dadurch mussten wir nicht gleichzeitig in bestimmten Bereichen Personal abbauen und an anderer Stelle neu aufbauen. Diese vorausschauende Aufstellung unterscheidet uns heute und darauf sind wir auch stolz.There is currently a European adjustment program in the Power division, which mainly affects plants in France, with around 50 jobs affected in Germany.
However, our situation differs significantly from that of many of our competitors. As already mentioned, we began early on to exploit synergies between different technologies and to strategically align our resources. As a result, we did not have to cut staff in certain areas and build new ones elsewhere at the same time. This forward-looking approach sets us apart today and is something we are proud of.
The LiDAR cleaning system from Valeo ensures stable sensor performance at driving speeds of up to 130 km/h. It has either an integrated protective cap (with integrated nozzle) or a retractable cover. The cleaning system provides effective protection in all weather conditions – including rain, snow, mud and dust. (© Valeo)
Valeo is one of the world’s leading suppliers of driver assistance systems. What sensor innovations – particularly in the areas of camera, radar and lidar – does Valeo expect to see in the next two years?
I would like to start with a clear message: there is not a single vehicle on the road today with level 3 automation that is not equipped with a lidar system from Valeo. Our lidar sensors offer outstanding resolution, high reliability and enable robust redundancy concepts – essential prerequisites for highly automated driving.
Valeo sees itself as the global number one in the field of advanced driver assistance systems (ADAS). We offer a very broad portfolio of sensor technologies – from front and surround cameras, ultrasonic sensors, radar, lidar and thermal imaging cameras to high-performance computer architecture, domain controllers and central computers.
The trend is towards ADAS systems with increasing functionality and higher criticality. How does Valeo meet the challenges of functional safety (ASIL) and the software architecture of these systems?
In autonomous driving, the necessary redundancy is created by combining camera, radar and lidar systems – all three technologies are part of our product portfolio. This integrated solution is recognized by our customers and has established itself as the industry standard.
Functional safety remains a key issue. On the architecture side, we rely on several SoCs that monitor each other, as well as additional safety ECUs for particularly critical systems. This protection is an integral part of our development strategy.
In the area of software, we are working intensively on integrated system solutions for Level 2 Plus driving functions, which are already in series production today. In addition, we are working with BMW to develop a software stack for highly automated driving at Level 4 for automated parking.
Our expertise thus ranges from sensor technology and chip tuning to complete system and software integration across all automation levels.
On the cooperation with BMW: The development is taking place within the framework of a close cooperation. It is becoming increasingly apparent in the industry that highly complex systems such as automated driving can only be realized in partnership with vehicle manufacturers. Valeo deliberately relies on a network of strong partnerships – including with companies such as Google and Qualcomm – in order to successfully cover the enormous range of technological requirements.
Today, companies such as Qualcomm and others offer comprehensive platform solutions for high-performance computers (HPCs). To what extent do you see the danger of such technology providers increasingly taking over business shares from traditional automotive suppliers?
We have good experience in cooperations. I don’t think they could do it without us, we couldn’t do it without them. If you position yourself sensibly, it can be very successful. We have demonstrated that so far. Two people always win instead of one losing.
How is Valeo positioning itself with regard to the integration of ADAS in central, software-defined vehicle architectures – and what role does your cooperation with partners such as Mobileye or Stellantis play in this?
The recently announced cooperation between Volkswagen and Mobileye is an example of how the automotive industry is increasingly moving towards software-defined vehicles (SDV). This step shows that vehicle manufacturers are increasingly relying on strong technology partners to master the complex requirements for software, sensor technology and system integration.
This is precisely where Valeo is positioning itself very clearly: with our comprehensive software expertise – which we have already proven in the areas of electrification and advanced driver assistance systems (ADAS) – we are one of the leading providers of SDV technologies.
The central question is: Why is the vehicle becoming a software-defined vehicle today? The reason lies in the change in customer needs over the entire life cycle. Vehicles increasingly need to evolve like smartphones or digital platforms – through software updates, new functions and customizable user experiences.
Our goal at Valeo is to actively shape this change. We combine efficiency, active safety and a dynamic digital experience in an open system architecture. To this end, we are working with manufacturers such as Renault, Stellantis and BMW as well as with American and Chinese OEMs. A key part of our strategy is the unbundling and agnostic nature of our software solutions – open to different platforms and partners. In addition to our OEM partnerships, we work closely with technology companies such as Google and Qualcomm and are developing solutions for fully automated parking together with BMW, for example.
Valeo and PanGood, a Chinese high-tech company, have announced the joint development of a new generation of axial flux generators. The jointly developed 2-in-1 solution integrates motor and inverter in a highly compact and scalable system. The architecture is designed to be flexible and suitable for all types of electric vehicles, especially Extended Range Electric Vehicles (EREVs), which require an efficient electric drive unit and intelligent energy utilization to increase range – without increasing mass or cost.
The advantages of a software-defined vehicle are obvious for OEMs and suppliers. But in the end, the question arises: who will bear the considerable development costs? The end customer will probably not bear these costs in full. How do you see the investment being distributed?
Ultimately, the willingness to pay will always arise where a genuine sales experience can be created for the end customer. There is no question that a supplier like Valeo could bear the entire development costs alone.
We are convinced that the collaborations we have entered into with our customers and strong technology partners create the right basis for jointly supporting this development. However, when it comes to implementation in the field – i.e. integration into the vehicle and marketing – the OEM must play its part. Ultimately, this also creates a new business model for them.
Of course, we at Valeo are also carefully considering the areas in which we can develop our own business models and where we can generate sales. Ultimately, it is always a question of the specific business case.
While we are currently responsible for the basic development and are consistently driving it forward, it is clear that the implementation and financing of a software-defined vehicle can only be successful if several partners work together.
In view of high energy prices and increasing regulatory burdens, Germany is coming under increasing pressure as a business location. What specific political measures do you consider essential to ensure competitiveness and not jeopardize the development of technology in Germany?
Unfortunately, the issue of competitiveness is becoming increasingly urgent. Basically, we have a problem in Germany with excessive costs, too high a tax burden and too much bureaucracy.
One example: Compared to our European neighbors, we pay twice to three times as much in taxes and grid fees on energy. This is not sustainable in the long term for energy-intensive industrial companies such as our plants. Another example concerns electricity prices in the field of electromobility: while electricity at home costs around 25 cents per kilowatt hour, you pay up to 90 cents at a fast charging station on the highway. This is incomprehensible and inhibits the spread of electromobility. Of course it is legitimate for companies to optimize their business models. But at some point there have to be clear limits in order to keep future technologies affordable and competitive. We expect targeted intervention from politicians here.
In addition to a nationwide, efficient charging infrastructure, we need above all an environment that is simple, transparent and fair for consumers – both in terms of availability and costs. I’m not even talking about other structural competitive disadvantages such as high wage costs or falling productivity compared to other European countries – but these factors are also increasingly jeopardizing our position.
Valeo is not just complaining, we are making concrete proposals: one of our key demands is the introduction of a minimum value-added share per vehicle in Europe. Such an approach would help to ensure healthy competition without relying on isolationism or tariffs. We are not afraid of competition – Valeo has proven time and again that we can hold our own internationally. Our plants, developments and structures are geared towards playing at the top. But in a globally changing environment, we must act strategically to strengthen the European market. We must not forget: Around 75% of the value of a vehicle comes from suppliers. It is not enough just to protect the OEMs – we must also protect the supplier industry, their jobs and their know-how.
A minimum value-added share would be an important step towards securing Europe’s industrial base in the long term. After all, almost 8% of Europe’s gross domestic product and around 13 million jobs are directly linked to this sector.
Do you have a specific figure in mind for the minimum value-added share or could you give an example of what this might look like in practice?
We have deliberately not yet specified a concrete figure for a minimum value-added share. It is important to us to give politicians the necessary leeway here. Basically, I have no worries that we will be able to compete with any other provider working under comparable framework conditions – or even come out ahead. The real problem lies in the fact that the framework conditions are currently very different internationally, and Europe is often at a disadvantage here. This is precisely what we urgently need to work on.
However, we are not trying to paint a negative picture. On the contrary: Valeo is a tech company, and we have strong locations in Germany. Our global headquarters for driver assistance sensors is located in Bietigheim and our research and development center for high-voltage technologies is in Erlangen. We are the global market leader in ADAS sensor technology and are clearly committed to these German locations.
We should not focus exclusively on the challenges, but also confidently highlight our strengths. At the same time, we expect reliability, stability and predictability from politicians – at both federal and state level. This is the only way to strengthen the industry in the long term.
From my point of view, and after 30 years of experience in the industry, I am convinced that the industry is making its contribution. We as suppliers, our competitors and the OEMs all offer internationally competitive, high-performance products that we can be proud of. That’s why we should stop playing small.
We now need targeted impetus to ensure that technology development in Germany remains possible at a top level – not only for products that will only be on the road in five or ten years‘ time, but also for technologies that are marketable today and tomorrow. There is a lot to do, but it can be done. We at Valeo are ready to make our contribution – and we trust that the new government will also create the necessary framework conditions for this.
In view of the current market shifts – Germany is losing importance in terms of car sales figures, while markets such as China are growing and technologies and production locations are increasingly relocating – the question arises: do you believe that development in these markets will also follow in the long term? Or will a significant proportion of development work be
We already work in a global network of development locations and use resources on all continents. In my view, this international cooperation will continue to intensify in the future.
What I have no doubt about, however, is the central importance of the entrepreneurship, expertise and dynamism that we have built up in our development centers in Germany. These strengths remain the key to close interaction with our customers – and it is only through this collaboration that new technologies can be successfully brought to the road.
I am firmly convinced that this development and innovation expertise will be retained in Germany. At the same time, certain work packages will of course also be processed at other international locations as part of our global network. However, strategic development expertise will continue to play a leading role here in Germany. (oe)
Thank you very much for the interview!
(The interview was conducted by Klaus Oertel, Editor-in-Chief of AEEmobility)
