Vitesco boss Andreas Wolf rejects e-fuels

Andrew Wolf

The Vitesco boss wants to start earning money with the electromobility business as early as next year.

(Photo: Vitesco )

Dusseldorf With his move to question the end of combustion engines in the European Union in 2035, Federal Transport Minister Volker Wissing (FDP) thinks the German car industry is behind him. Because regardless of whether it’s a car manufacturer or a supplier, most of the money in the industry is still made with the combustion engine, not with electromobility.

If Wissing has its way, cars with internal combustion engines should also be registered in Europe after the reference year. These are then to be refueled with so-called e-fuels, i.e. synthetic fuels.

But Wissing’s plan appears to have met with less approval in the auto industry than expected. Automotive supplier Vitesco, which emerged from Continental’s drive division, is fully committed to electromobility. “E-fuels will not play a role in the automotive industry after 2035 either,” said Vitesco boss Andreas Wolf when presenting the supplier’s annual figures. In addition to Vitesco, most car manufacturers have also committed to electromobility. In an interview with the Handelsblatt newspaper, Audi CEO Markus Duesmann recently confirmed the end of combustion engines at Audi.

“I don’t know the motivation of Federal Transport Minister Volker Wissing. But he will have his reasons,” Wolf said in an interview with the Handelsblatt. “We examined e-fuels in terms of energy efficiency and practicality and came to the conclusion that synthetic fuels will not have any strategic importance for Vitesco.”

Wolf’s statements are remarkable in that the drive supplier is still heavily dependent on its combustion engine business. The bottom line is that the division made a profit of 321.4 million euros, while the business with electrical components still made a loss of 270.3 million euros despite an increase in sales of almost 18 percent.

Overall, earnings before interest and taxes were 143.3 million euros, with sales of almost 9.1 billion euros. Revenue increased 8.6 percent year-on-year. The pre-tax profit margin is meager. It was just 1.1 percent. Nevertheless, the past financial year paid off personally for the Vitesco boss. In 2022, his total remuneration more than tripled to 3.5 million euros.

Electromobility should be profitable as early as 2024

The fact that Vitesco is making losses with electromobility is also due to the massive investments in this area. Measured against the division’s sales, the company spent around 35 percent on research and development last year.

In the press conference on the annual figures, Wolf emphasizes the order situation. Accordingly, Vitesco’s order backlog is 58.5 billion euros. 46 percent of these, i.e. 26.9 billion euros, are orders from the electrification area. This includes components for purely electric cars as well as for plug-in hybrids.

In the long term, the internal combustion engine will no longer play a role in Vitesco’s plans. Wolf is therefore surprised at BMW’s move to continue investing in the old form of drive. “We don’t see a market trend that the combustion engine will last longer. From our point of view, it is not a viable concept to continue investing in the combustion engine,” says the Vitesco boss.

>> Read about this: BMW wants to continue investing in the internal combustion engine

As early as next year, the drive supplier is planning to start earning money with electromobility. After 2026, the business could also become the largest source of revenue in the group. Asia accounts for the largest share of sales at Vitesco. “We follow the market development. And in the field of electric mobility, China is one of the most important and fastest growing markets in the world,” says Wolf.

Wolf also sees potential in the USA after the US government put together an attractive subsidy program for the auto industry with the Inflation Reduction Act. “We are currently looking at how we position ourselves on the Inflation Reduction Act in the USA. One possibility would be to expand capacities in the USA. We will make a decision on this in good time,” he says.

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