Mr. Placke, what the financial and mobility sectors have in common is that they are experiencing massive changes, driven by technologies that many people did not take seriously for a long time – in the financial sector, blockchain and robo advisors are good examples, in your sector it’s electric cars. It seems to us that the mobility sector has less difficulty in facing up to change and taking determined action if necessary. What can the financial sector learn from this?
DR. TOBIAS PLACKE: You have to keep plugging away at technological innovations. Lithium-ion batteries are a good example. Sony introduced them in 1991, first they were used in camcorders, then in mobile phones, now in electric cars. The development was so fast mainly because of the Far East where research into the technology was driven forward continuously for many decades.
In Germany, by contrast, there was a long period of hesitation: many people were worried that they would invest a lot of money in a sector and then be squeezed out again by aggressive pricing from the market leaders – as happened in the solar power sector ten years ago. Billions of euros were invested in Germany, but others charged lower prices and virtually destroyed our market.
Germany has been waiting since 2005 for a revolution in battery research, a “super-technology” to build on. However, the revolution did not come and is still not there even now. Then, five or six years ago, it was decided to really get into lithium-ion battery research after all. But we’ve lost a lot of time – ten years, basically; ten years that others have put to good use.
Of course, it’s important to look at new technologies. But neglecting the continuous improvement of existing technologies for this purpose, can turn out to be reckless and expensive.
That’s the problem with the “next big thing” that stays “the next” for a very long time ... before it becomes “big”.
Yes, and may never come at all.
Can German battery research still close this gap?
Yes, by spending a lot of money. Major automobile manufacturers, as well as other companies, are simply buying into everything right now. That, of course, is a way to catch up quickly. But it’s going to be really expensive. If we had started earlier, we would be in a much better position now.
Openness to new technology is a good thing – but always with an eye on which use cases are realistic
You talked about different technologies that should be considered. Openness to technology is also much discussed in the world of finance. How important is it if we want to remain innovative?
Very important, but it’s also a somewhat overused term. Take the latest example: the topic of batteries or fuel cells, i.e. hydrogen, is being hotly debated, with a great number of opinions and demands that both technologies should be driven forward. In principle, that is true, but you should always check which technology is suitable for which application. Many people fail to realize that fuel cells, for example, make little sense for private transport. The overall efficiency of hydrogen in fuel cells is about 30 percent, while for batteries it is over 70 percent. So you have to put almost three times as much energy in to get a comparable output. Hydrogen makes more sense for other applications. So, openness is a good thing – but always with an eye on which use cases are actually realistic and suitable.
Openness then also means consciously deciding against certain applications ...
Of course, at some point you have to decide. For example, many people in the automotive industry are now doing the same, saying: “We’re currently doing batteries only as we can’t invest in both systems at the same time. That would be too expensive.” After all, it’s not just about the cars – the infrastructure, including charging stations in particular, is still missing to a large extent. At some point, the decision what to prioritize has to be made, even if many companies struggle with this.
So who are the innovators in your industry? The start-ups or the established players? Or is it US tech corporations – any counterparts to the PayPals and Googles in the financial sector?
There are many start-ups in the battery sector. In the U.S. even more so than in Europe, because start-ups seem to be better supported there and, as is generally known, entrepreneurial failure is not a stigma in the U.S. This definitely brings a lot of innovation to the field of battery technology. Tesla basically started out as a start-up and has significantly advanced the technology because it dared to do what no one else dared to do at the time.
Those who wait too long for the “big thing” will get left behind
Final question: what could a savings bank or a large-cap bank learn from MEET and your industry?
When it comes to innovation, focus is important: at some point you have to make a decision, because you can’t bet on all the horses at the same time. This also means not chasing after every trend.
It is also important to be able to put the huge number of innovation news into context: how many times have I read about new miracle batteries – probably a hundred times. And most of the reports were simply premature or overly optimistic.
Final point: keep plugging away at innovations – based on the insight that they happen step by step. Those who wait too long for the “big thing” will get left behind by technology developments that are often evolutionary.
Mr. Placke was a guest speaker at this year's zeb.Uni. If you have any questions or would like to get in touch, please contact Sarah Schroeder.