BMW CEO Oliver Zipse - circularity gets digital transformation on the road

Chris Middleton Profile picture for user cmiddleton November 10, 2022 Audio mode
Summary:
The German car giant treats digitalization as more than just software and tech.

bmw

Technology interaction, sustainability, and collaboration are the keys to future mobility, according to Oliver Zipse, CEO and Chairman of the Board at German car giant, BMW. But one element is even more important - “circularity”.

Giving a keynote speech at Bosch ConnectedWorld 2022 in Berlin this week, Zipse explained:

I'm supposed to talk about future mobility, as you might expect, and there are a lot of transformations happening. But if you look at the transformations, they're all quite technical. The trick is you have to combine them in a feasible way; you must create a business model.

“The main areas of transformation are sustainability and circularity – the most underestimated topic in transformation, we firmly believe. The others, digitalization and electric mobility, are obvious. But circularity is the key to have in an economic business model.

What did he mean by this? Essentially, a circular economy of recycling and reuse, especially in an automotive industry that is so often about tin boxes rusting and depreciating in people’s driveways. He continued:

The rise [in cost] of raw materials in the past week is only an indicator of what we expect in the future when we scale up, when someday we may have to take our products back. What do we do with them then? That is the key to the future.

One and a half years ago at IAA Mobility [car show] in Munich, we presented a vision vehicle, which was based completely around a circular economy, made 100% out of recycled materials and being in itself 100% recyclable at that time.

Today, that’s a main part of our corporate strategy. Our strategic goal is to have at least 50% of the product’s content recyclable, but that is very difficult to achieve. It's only 50%. But from today's point, that’s a major topic for us.”

Everything digital

These are important issues for a car line that will soon include the i5 and formerly British marques, such as the Rolls Royce Spectre and the full-electric Mini. But aside from tin boxes, how can this huge manufacturer combine electrification and digitalization? BMW is increasingly a technology company, one that relies on software, intelligence, and data. Zipse said:

Digitalization is not only the car, it’s the company, the whole company. It's about product development. We don't only talk about the Metaverse, we also talk about the ‘IT-overse’, the idea-to-offer process. That's the development process. The IT-overse is the name of the game for us. It's about production, it's about the customer experience. Everything is digitalized.

He added:

By next year, every employee at BMW will receive a digital competence program. We're not just talking about the IT department and the business, that's the game of the past. Everyone has to have digital competency. And we don't really talk about digitalization anymore at BMW. We make BMW digital. We will never again separate hardware from software from business. It is all one thing, where everything has to come together.

Why? Because only if you don't separate, if you interact, if you cooperate – which is not easy, it's always more difficult – only then you can create a unique, overall digital experience by adding the best digital offer, and at the same time the best user interface.

He added:

BMW today has the largest fleet – 3.8 billion [sic] cars, which can be updated in a fleet of over 20 million connected vehicles – at the same time, safely and securely. And most important, there’s your privacy. It's always about privacy. It's about securing the privacy of our customers, not only in Germany, but everywhere in the world you go. That's the most important promise BMW is making to its customers. And we are not taking any risks in this.

We know suppliers – some of them are sitting in this room. They of course want the data from the cars, which we are happy to provide, but only over the back end. There will never be a direct access to the operating system and the functions inside the car by third parties to secure the privacy and the security of all customers.

As I said before, it's not only about the product, it's about digitalizing the whole company.

My take

Bosch’s BCW2022 event is taking place over two days with a theme of ‘invented for life’. Stephan Hartung, Bosch CEO and Chairman of the Board welcomed delegates to the company’s first real-world conference post-COVID – or rather, post people taking the pandemic seriously as it continues to hit the population.

Praising Bosch’s partnerships with the likes of BMW, and IBM in quantum technology, Hartung joked:

I’ve chosen to become CEO in 2022. A wonderful year, I thought, but now see where we are! There are lots of challenges around us. And every single morning we get news about the challenges we face. But you know what? Technology can help. But technology is not finally the solution, where we just press the button and everything is fine. That's definitely not the case. But we can make a contribution. We are technology people and technology can help.

Invented for life, for me it's much more than a slogan. It's really something we can work for and be inspired by. There's the invention part. This is what we love, all the new stuff, right? All the new ideas, the digital stuff, the connectivity stuff, the IoT stuff. But there's also the ‘for life’ part, and that's very important. We do this for a purpose.

Upbeat and positive messages from these two German giants. And we could all do with some of that in this day and age.

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