E631 | EUCVC Summit 2025: Marcus Behrendt, BMW iVentures & Nicole LeBlanc, Woven Capital: What is next in the European Automotive industry

0:29Autonomous, electric, shared. two topics that any young boy will love, cars and US hegemony. Tell me, what should we do in Europe to reclaim leadership in the automotive industry? Well, you can go first. I go first, as I'm the European. Okay. So I'm from BMW Adventures, and so I'm speaking for BMW Adventures, but looking into the car industry and the developments right now, I think one of the major portions are that we see great over capacities, right? So there's a lot of over capacities, which means price pressure, and then there's geopolitics questions, and there's of course transition questions, and those are the ones that we are facing the most.

1:13So like technology changes, and how are we answering those changes? And I do think leadership is always a difficult word in this case, but I think that some of the European OEMs are very good positioned, even if it doesn't look like that. But transition is a little bit slower with the established incumbents because you have heritage to take care of. But once you've understood where the direction is going and flowing, then I think there's a lot to expect from those companies as well. So we're really carefully transitioning into different powertrain options. Electrification, I think, is the main powertrain option for passenger vehicles, but you should still be open for other technologies to come, not to just shut down and say, this is the direction that we all have to focus on.

1:59And I think BMW actually has done a very good job compared to the other Europeans in actually answering the questions that customers have to that subject. So we're a global OEM, so Woven Capital. We're the independent growth fund for Toyota. And so Toyota sells in quite a number of countries. And one of the reasons that we're very, very excited about Europe is the leadership that's coming around what the future of automotive and mobility looks like, because it's not just about selling more cars. It's about, as you mentioned, electrification, that integration with the grid, with circularity. And so we really see Europe as a leader in that.

2:34And I work with our groups here as they think about how do we actually meet some of the regulatory elements? How do we think about the business models that come with that? So it's not just about meeting a regulation. It's how do we meet that regulation in a profitable new way that could turn that into a new business? So it's about getting creative with really trying to think about the transition in the mobility industry. And we really see Europe with the deep tech focus, with the tie to academia, and with the infrastructure and the regulatory environment here is one of the ones that can help, as a Toyota example, be the first mover and then be able to help us understand how do we deploy that globally.

3:12So obviously mobility is much more than just the core components of a car. but electrification, we just touched on it, batteries are an important part. So let's just stick to that one for a little bit. I'd love to hear your views on our competitiveness when it comes to batteries. Is this something that we should take a real shot at in Europe? Or as I have heard another investor who wouldn't say it on a stage, we have no chance, no way, it's lost. This goes to the Chinese.

3:44I wouldn't agree with the last statement. for the reason that I think we need to have a grip on one of the most costly parts of the vehicle itself. So even if OEMs are more about assembly, so much of the things are not done in-house. I always say OEMs are orchestrating suppliers. Seeing that where the most value goes in is usually the part that you should still control. So I think, yes, we should understand what it takes to build batteries. and maybe we've lost ground on the existing battery technologies, but there's more new battery technologies on the horizon that might go away from some of the precious metals, the rare earth metals that we're using nowadays, towards batteries with similar characteristics and power specifications that will be much easier to produce and distill here in Europe.

4:37That said, though, of course, we are haunted by a number of news in the last past month that have really diminished the European efforts, unfortunately, on the battery space. So from a Toyota perspective, if you look at our portfolio, we actually don't have a lot of battery investments because Toyota is doing a lot of that work in-house or in conjunction with other big Japanese companies really trying to think about the future of batteries, getting into solid state, reducing rare earths, that sort of thing. But I think it needs to be more than just about the batteries. it's about that whole ecosystem.

5:11Because EVs are not just selling a unit and selling one vehicle like it used to be with kind of the old cars. It's really about being part of a bigger ecosystem. So it's not just about having the battery with the longest range or the cheapest battery. It's about having a battery that integrates into the infrastructure, that integrates into your home, that allows you to charge with renewables and charge with the lowest cost. And so you need to have partnerships with the utilities and being able to figure all of that out. So it's not just a simple, how do I get the best battery? It's actually part of a bigger, broader ecosystem.

5:42And I think that's where non-Chinese geographies and companies can win. Also, maybe new business models is what you're also alluding to. Renault has taken the first step with vehicle-to-grid charging. And this is, I think, something where Europe will be first. developing vehicle-to-grid and bidirectional charging to actually support the grids in delivering the power with the renewables that are very volatile in their daily fluctuation. And therefore, if you look at all the batteries out in the field sitting in the vehicles, if you can use them to dampen the volatility, that will be a big advantage.

6:22So we will see a lot of developments there. I'm going to throw you a curveball. Give me the bull case for the European automotive industry. What do you mean? Number of units sold? The bull case. So tell me why would the European automotive industry be well positioned going forward? I think it's about that integration. I really do. Because if you think about it, 10 years from now, how are you going to decide how to buy a vehicle? Is it going to be because it's the most safe? Is it because it's the brand? or is it because it integrates with your phone and your house and it doesn't cost you anything to charge it?

7:00So I actually think it's going to be because of all of those integrations. And if you think about it, you know, Europe is a number, you know, many countries, and, you know, that is kind of the big complaint is that, you know, it's not like the U.S. market where you can just go in and you sell California and Texas and New York, you know, that you do have to sell country by country and there's languages. But I do think there's that cohesiveness that I think Europe can win on that. where if you get Germany, France, UK, a couple of big markets, then I think a lot of the other markets will see that and follow.

7:32So it's about the integration. I think that's why Europe's going to win. Nicole, that gave us the perfect segue into what you really think that is important to be talking about in mobility, which is, of course, all the other things than the core drivetrain, core components of a car. Maybe you can start us there, Marcus. Yeah, I think we will see some of the biggest changes. So we don't have a crystal ball, so we don't know yet. But the biggest changes will also come with autonomous driving to some extent. So 10 years ago, we already talked about life on board. So if you're not occupied with the driving task yourself anymore, how does that change your interaction within the vehicle?

8:12Are we just going to ride buses? Are we still not going to have private cars? Actually, if I take a public bus, I don't care who manufactured the bus. So I'm just getting in and getting out. will that be the same for passenger vehicles or will you still own your own utility or your own vehicle, let's put it this way, your living room on wheels? And I think there's a strong indication that people want to own their own spaces. Even if it maybe drives by itself, it still will be what you like, your design, your features, your integration. So therefore, I think that's also back to your question, where the European brands have a very stronghold in building very characteristic cars.

8:50So now we might build living rooms on wheels that are very characteristic to ourselves. And I'd rather have my kid being autonomously driven by my car than anybody else's car to a certain area and then pick up something else and stuff, if that is the future that we're looking to. Now looking out maybe 15 to 20 years. But even 15 to 20 years is mind-blowingly short when talking about that vision. Last remark, your take on this. What is it that is going to be integrally important for us in the automotive industry? I think it's about that connectivity and how it's going to change our life. And it's going to change the way you operate.

9:28So will you even need a key? Will you even need user interfaces? Will you not just call your car with your voice and get in and tell it where you want to go and say, and I want you to tell me about all of the different buildings along the way. or I want you to. So it's just, it's really interesting. I'm very excited about what AI is doing, what, you know, kind of the circularity doing, what electrification is doing. And it really is an unknown as to like how creative people are going to get with it. I think the important part is for venture funds like us, how can we help our motherships by making investments to get them excited.

10:03And as people were saying earlier, that trust where we can build those relationships with startups, because I think startups, you know, bring the speed and that disruptive element that's difficult for our like the big traditional companies to be able to integrate. So we can do that. We can play that role, build that trust, get them excited about it. And then those companies bring the scale. And so I'm just really excited to see where it's going to go in the next 10 years, because it really is like there's there's really a lot of fundamental change that could that could happen. And building on this, I think the additional sentence that comes to my mind is we're de-risking our motherships.

10:37We're taking the risk for the startups to focus on really interesting new ideas that have high risk and might fail. But if they succeed, then we're close to them and we can help integrate them into the cars and actually achieve those changes that we're all longing for. Guys, I am truly envious that you get to think about and invest in and dream about what the future of automotive is, because it is truly magic in the making. Thank you so much. Thank you. Thank you.