Heads of the Industry: VDA President Hildegard Müller on the Innovative Power of the Automotive Industry

Transport: Good morning Mrs. Müller! The automotive industry and the economy as a whole are currently in a state of flux. We are in the midst of change. How will this be reflected at the IAA Transportation in September?

Hildegard Müller: Of course, the IAA Transportation mirrors the issues currently emerging in the commercial vehicle industry. Therefore, it is primarily about sustainability, climate neutrality, innovative drives, electric and also hydrogen technology with fuel cells. In addition, there will be autonomous vehicles, digital networking, and intelligent traffic systems. We will also present new logistics concepts. You may recall that two years ago we focused on the ‘last mile.’ This year, the focus is mainly on increasing efficiency and reducing emissions. Overall, we will demonstrate in Hanover that we have already developed environmentally friendly and forward-looking solutions.

Once again, the entire range is represented this year: commercial vehicles, transporters, trucks, trailers, bodies, alternative drives – the whole spectrum from electric vehicles to hydrogen and hybrid, to digital solutions. Already, more than 80 press conferences are scheduled for the press day – you can expect an impressive variety of innovations and world premieres.

We also have an exciting conference again, addressing current challenges with panelists from business, politics, science, and society.

And we are focusing on those who keep our country running with their daily work, namely the drivers. We are organizing a family action weekend, specifically bringing the various new developments closer to the drivers and their families – and we are eager to hear their perspectives and experiences. A particular highlight will surely be the Trucker Festival.

How is IAA Transportation developing compared to the 2022 edition?

The IAA Transportation 2022 was almost like a restart after the Covid-19 pandemic. The event not only finally brought us back together but also impressively demonstrated how determined our industry is—we presented solutions and showed that we accept the challenge and the goal of climate-neutral mobility as a chance. This year, the IAA builds on that and continues to grow. By the end of July, we had already surpassed the number of exhibitors from 2022. We are very pleased with this. This fact and the growing international involvement of companies highlight the relevance and prestige of IAA Transportation. More than 70% of the exhibitors come from abroad, 10% more than in 2022. This year, China, Turkey, and Italy are particularly well represented. This clearly underscores the platform character of IAA Transportation as the global leading event of the commercial vehicle industry. On the press day, over 80 exhibitors invite attendees to witness the innovative power of their products and present world premieres. It is therefore clear that IAA Transportation is evolving further this year with a broader spectrum of exhibitors, new innovative approaches, and additional experience offerings such as test drives, and is consistently setting new benchmarks. We will demonstrate that our industry is unique in terms of innovation, how various technologies complement each other, and how the industry enables the achievement of climate goals.

The transformation in the industry is currently in full swing. What topics are at the forefront?

The industry will once again show that no one can beat us in terms of innovation. Manufacturers and suppliers are tackling the challenge of climate-neutral and digital mobility of the future with determination and passion. In Hannover, the agenda also includes the framework conditions needed to ensure our industry can remain a global leader. How can the supply of semiconductors be secured? The question of essential raw materials is just as critical as that of new software. Companies are concerned with these issues and many more. The automotive industry alone will invest around 280 billion euros in the next four years in the research and development of new drives and digitization. About 130 billion euros will also be invested in the construction and conversion of production facilities.

Does Germany still provide good conditions for this?

That's the crucial point. Of course, the conditions are decisive for where investments are made at the end of the day. Both Germany and Europe urgently need reforms for more international competitiveness—especially considering the challenging geopolitical conditions.

Internationally, a lot is happening at the moment. Even though the USA is partially pursuing strong protectionist approaches with the Inflation Reduction Act, they manage to create attractive investment conditions overall. They rely less on regulation and more on entrepreneurial freedom and pragmatism. The goal, just like ours, is climate neutrality. The competition with China is also becoming more intense, and overall it is clear that Germany and Europe need economically generated strength—as capital for global climate and geopolitics in our favor.

But that requires growth and prosperity, which can only be achieved in Europe if we become internationally competitive again. This will be difficult considering the current energy costs, bureaucracy costs, and also the tendency of Brussels to regulate and restrict technology. From our perspective, these are the wrong paths. They lead to a relocation that we are increasingly observing within Europe.

The EU urgently needs a committed, comprehensive, and forward-looking trade policy. This has been too neglected in the past. The world is not waiting for us—the markets and access are being taken by others, and the EU's lack of determination is costing us growth, prosperity, and consequently geopolitical relevance.

This is a very common criticism, that energy costs are a competitive disadvantage in Germany. Where else is there a snag?

Investment decisions need to be made now. Especially against the backdrop of the strong regulation that is also coming for commercial vehicles, the industry is reliant on being able to start ramping up. The vehicles are available, as the IAA Transportation will show. The questions are: Will the necessary charging infrastructure and the power grid required for it be built? Are there hydrogen filling stations? Is the infrastructure necessary for the transformation available in general?

Our industry is setting the necessary pace - unfortunately, the government is not. I am increasingly hearing from logistics companies that the switch to an electric fleet fails due to the lack of network connections. Logistics companies are being told by local providers that the necessary network connection for the charging points will not be available for five or more years. This is the sad reality that we cannot and must not accept. The government must now set maximum speed here. The vehicles are being produced, whether they hit the roads here soon depends precisely on such conditions.

To be very specific. What measures or incentives should the government use to support the truck industry right now?

What we need is a site pact that ensures energy and raw materials at competitive prices. We need a trade policy that does not focus on tariffs and isolation but opens markets. We must keep an eye on costs, including wage and labor costs. But above all, we must drastically reduce bureaucracy. Surveys show this. From medium-sized companies to large corporations, everyone is increasingly burdened by it.

What is needed now is speed in everything. Not only in building the charging points and in the mentioned network expansion. A different mentality overall is needed, a determined, strategic, and sometimes pragmatic approach. The industry is doing its homework, delivering innovations. Of course, we are also involved in the development and expansion of the charging infrastructure. But as far as network expansion goes - that's where the state is needed. This applies to Germany, but above all to Europe.

So the government is lagging behind, even though manufacturers now have numerous models on the market?

That's right. And with a view to fleet limits, manufacturers now have to sell a corresponding number of e-trucks. Producing the vehicles is not the problem - but whether and where they are sold is determined by the framework conditions. Here I expect ambitious goals from the government, which are also pursued and monitored accordingly to then decide where improvements need to be made. We must not lose any time. About 30 percent of CO2 emissions come from the commercial vehicle sector. So, we would have a real lever here if these fleets were renewed faster. If the right steps are taken now, we can show significant successes in CO2 reduction. The current weaknesses in terms of competitiveness and location not only harm growth but also the climate.