Move to EVs creates opportunities for plastics molders

Novi, Mich. — The global auto market is changing rapidly as it races toward a goal of carbon neutrality, and plastics will be an important part of the effort.

That's according to speakers at an automotive conference organized by injection molding machinery maker Engel Group, held June 2 in Novi.

Speakers talked about how electric vehicles are rapidly gaining market share, and how that will impact the plastics supply chain.

Hinrich Woebcken, currently a venture partner with Blue Lagoon Capital and the former president and CEO of Volkswagen Group of America Inc., said the global auto market has reached a tipping point, and he urged plastics companies to go all-in on EVs.

"I see it from the investor side. I'm working a lot with private equity. And the big dollars, the big investment money, are really more and more channeled only into companies into investments where the management the technology stands behind sustainability," Woebcken said.

He cited several examples of ways plastics can help EV OEMs, including new exterior lighting concepts that will replace front grilles.

"What I see is an opportunity for the people in this room," he said.

Woebcken also made a pitch for working with new automakers.

"I am so stunned how different and how [much] faster these [companies] are bringing products to the market, of course, with a lot of stumbling blocks and going through tough times. But the way they collaborate with the suppliers was, for me, a big eye-opener," he said.

Most traditional OEMs keep suppliers at arms' length to some degree, but new automakers are "totally different," he said.

"And I can really compare, because I lived many years in this old world and the legacy world and I'm part of many journeys in the new world. And this is an opportunity for the injection molding and the plastics industry. … Even their volume is still small, you should take them really seriously because they open up a new opportunity and they will grow," said Woebcken, who started his career at a German injection press maker before he worked for Volkswagen.

Kevin Riddell, senior manager of powertrain forecasts at LMC Automotive, said there are about 60 EV nameplates in the U.S. market now, but his firm expects there to be about 300 different brands on sale by 2030.

By volume, currently most EVs sold in the United States are domestic models, largely because of the head start that Tesla has over its competition. But the number of imports will grow rapidly, Riddell said.

The compound annual growth rate for EVs in the U.S. between 2021 and 2030 will be 35 percent, he said, emphasizing that the market is growing faster than the 29 percent CAGR in Europe and 18 percent in China.

Riddell said nearly every kind of vehicle will see rapid growth for EVs.

"It's not just small compacts. You're seeing utility vehicles, pickup trucks, SUVs, commercial vehicles, just a lot of variety. And, really, it's not necessarily just the fact that there's a lot of new product, but the innovation that a lot of these products are rolling into the mix as well," he said.

Franz Fuereder, vice president of Engel's automotive business unit, said one trend that can't be ignored is sustainability.

"We are convinced that in the future, we will have to collaborate even more," Fuereder said.

At the conference, Engel and Sabic officials gave details on several EV applications where they collaborated with other companies, including flame-resistant plastic trays for EV batteries.

"We have been working with our polypropylene and polyesters and polycarbonate chemistry to come up with a next-generation flame-retardant material that can improve the fire safety," said Dhanendra Nagwanshi, EV batteries and electricals leader at Sabic.

"And these parts are relatively large in size; we are talking about the size of a mattress, actually, a 2.2-meter- to 1.6-meter-long part. And that will demand innovation in manufacturing," he said.

"So that's why we have been … collaborating with our value-chain partners, and exploring how these solutions can be scalable for the car manufacturers, and how the plastic part can be joined to the rest of the components in the battery."

Michael Fischer, Engel's head of business development for automotive technologies, described a front-end panel design that his company helped create with partners including Leonhard Kurz Stiftung & Co. KG, which was featured at K 2019.

The companies used in-mold decorating with polyurethane film in one molding cell. Fischer said the process created an innovative design for an EV front panel. He noted that the process was extremely efficient and energy-saving.

Larry Erickson, global director of exterior design for Magna Exteriors, also described several automotive front and rear panels and explained how plastics can make them safer and more functional.

"If you look at automobiles right now, and trucks and SUVs, it's everything from a very complex liftgate to a very simple trim panel that may encompass a sensor or something like that. So things are constantly changing," Erickson said.

Sandy Munro, owner of consulting firm Munro & Associates, gave the strongest pitch for the plastics supply chain to go all-in on EVs.

"I'm telling you flat: People are going to move a lot faster than you possibly can imagine into EVs," Munro said. "The data against ICE [internal-combustion engines] is phenomenal."

He advised attendees to "pick your customers with care."

Woebcken agreed, saying that even if Donald Trump is elected president in 2024, automakers will not reverse their commitment to EVs.

"The carmakers, the OEMs, cannot afford over a long period to serve two ecosystems: ICE and EVs. It's tearing them apart; there is no chance that the OEMs will stay profitable if they try to serve two powertrain systems," Woebcken said.

"So anybody who still believes that ICE will sustain maybe longer if regulations … ease up? No, it's my firm belief that it's done. And this is a great opportunity for these people in this room."