Joint Forces

It all began on the fringes of an IAA motor show in Frankfurt. ElringKlinger had already invited Plastic Omnium to an initial meeting at the trade fair. Taking up this invitation, the French delegation headed by Laurent Burelle, majority shareholder and then CEO of Plastic Omnium, and Félicie Burelle, then Head of Strategy & Development and now Managing Director, visited ElringKlinger’s booth at the show. During discussions that involved ElringKlinger CEO Dr. Stefan Wolf, Head of Fuel Cell Technology Armin Diez, and Head of Global Strategy, M&A, and Innovations Dr. Gernot Stellberger, those attending the meeting soon realized that the companies not only had similar structures but also shared the same values. Both corporations are listed on the stock exchange, but have families as strong anchor shareholders. What is more, both companies have a clear vision of emission-free mobility: hydrogen will be an essential energy carrier of the future.

On this IAA meeting, both partners were equally enthusiastic about their shared awareness and agreed on further rounds of negotiation to sound out and define a joint approach. Dr. Gernot Stellberger led the discussions on behalf of ElringKlinger. His counterpart at Plastic Omnium, Marc Perraudin, CEO of Plastic Omnium New Energies, joined the project task force in early 2020 after the initial groundwork had been laid. This turned out to be a fortunate coincidence, as both men knew each other from earlier collaborations. “This gave us a tremendous sense of trust in each other, which proved beneficial to the subsequent workflow,” Stellberger recalls. “We didn’t have to spend time on figuring out what makes the other person tick,” adds Perraudin. “Instead, we were able to focus fully on our common goals.” As part of this process, both maintained a close dialogue with their respective CEOs. Both Dr. Wolf and Laurent Favre, now CEO at Plastic Omnium, were always kept fully briefed on the individual steps of the project.

The initial task for Perraudin and Stellberger involved defining the companies’ common views on mobility. Both Groups are of the firm opinion that the hydrogen-based fuel cell represents the next generation of drive technology. Both realize that large-volume production will make this particular solution more appealing, as economies of scale help to reduce the overall price per unit. Initially, the strengths associated with this technology are likely to come to the fore primarily in the commercial vehicle sector. After all, a battery-powered truck would probably have to stop at a charging station on several occasions to complete its tour in the case of long-distance travel or delivery routes that have a particularly demanding profile. However, recharging also means idle time for the forwarder and thus additional costs. Alternatively, the battery fitted to a truck could be dimensioned in such a way that fewer recharging stops are required.

In this case, however, the forwarder would be faced with additional costs or less profit due to a smaller payload. Trucks powered by fuel cells, by contrast, are capable of resolving this conflict. The power needed is generated on board, which translates into greater distances covered and the avoidance of lengthy downtime. Refueling is unlikely to take much longer than before. Even if it takes twice as long, truck drivers will certainly not be held up for an hour or more, as they would be in the case of battery recharging.

“Based on this common understanding, we then went on to identify the strengths that each partner can contribute and planned the next stage,” Stellberger explains. “It was clear that we wanted to work in very close collaboration to cultivate the fuel cell market.” Agreement was reached on a joint venture for stacks and components. At the same time, Plastic Omnium would acquire ElringKlinger’s Austrian subsidiary for the purpose of establishing a focus on systems. ElringKlinger possesses the technology needed for reliable components and high-performance stacks and was prepared to contribute it accordingly. The emphasis for Plastic Omnium, meanwhile, is on supporting the joint venture in an effort to expand production capacity and accelerate market penetration. The company based in Levallois near Paris will provide a total of EUR 100 million for this purpose. “Our joint venture has access to outstanding technology. It is equally important that customers are made aware of this quickly and in as compelling a manner as possible,” says Perraudin in explaining the objective of the cooperation.

A key objective of the joint venture is that it should be able to grow rapidly. “We see tremendous potential in Asia in particular,” Stellberger notes. “Here, many manufacturers in the bus but also in the passenger car segment have already clearly committed themselves to fuel cell technology.” Toyota and Hyundai, for example, already offer mass-produced cars fitted with fuel cells. This approach is also being supported by various governments. China, for example, is promoting fuel-cell-powered buses through state funds with a to view to also advancing technologies beyond those associated with battery power. This is clearly underpinned by a commitment to diversity in drive technologies for the various fields of application.

Public-sector support in Europe, by contrast, has been slower off the ground. Recent efforts include the National Hydrogen Strategy adopted by the German government in 2020. It covers a volume of EUR 9 billion, while a similar program launched in France is worth EUR 7 billion. The Franco-German alliance between ElringKlinger and Plastic Omnium is also counting on these state-led efforts to help fuel cell technology achieve its breakthrough. “Companies – often supported by funding programs – have taken a leap of faith when it comes to developing technologies. Now all players are called upon: it is imperative that the associated infrastructure and hydrogen production be built up quickly,” says Stellberger. One of the key advantages is that the existing filling station network can be used for this purpose. “Retrofitting will not be cheap. But such aspects have to be put into perspective. The decentralized infrastructure of recharging stations – with a sufficiently powerful grid – required for battery-powered vehicles is also expensive,” Stellberger continues.

Having agreed on the framework conditions of the joint venture, the final task was to find a suitable name. “We were adamant that the name should be representative of the contributing partners as well as the technology involved,” says Perraudin in explaining the solution swiftly found by the team. “EKPO Fuel Cell Technologies” was born as a brand – ready to conquer global markets. The business plan drawn up for the joint venture envisages rapid growth by the end of the decade: the company is targeting a market share of 10 to 15% by 2030, with sales revenue totaling EUR 700 million to 1 billion. “It’s ambitious, without doubt,” they both agree. “But, then again, our technology and our shared vision of next-generation mobility are a convincing proposition.