Driving Forces: Electromobility and Renewable Energy Trends in the Industry
Aa
Share
Electromobility
New electric vehicle production lines are an important driver of investment in the industry. The EU is currently deciding on the future of combustion engine cars in Europe. Although it is assumed that e-fuels will be allowed in newly registered cars from 2035, in general, the automotive sector worldwide is betting on battery-powered cars. The classic gearbox and traditional engine then disappear from the design of the car; the key element is the battery and the electric motor. The amount of copper and aluminum used in the car's construction is increasing, and new production lines and components are required to make the vehicle (investment also on the part of automotive parts suppliers).
A good example of the trend is the investment strategy announced by VW, according to which the group is to spend EUR 60bn over the next five years on investments related to electromobility, digitalization and hybridization (EUR 33bn for electromobility, and EUR 27bn for hybridization and digitalization; 60% of expenditure directed towards fixed asset investments). To give an idea of the scale of the investment required for electromobility, it is worth noting the following forecast of global and European growth in battery cell production.
The main beneficiary of the electromobility trend is controlled atmosphere brazing (CAB - controlled atmosphere brazing technology within the Aluminum Process segment) segment - used in the brazing of aluminum cooling components for battery systems. The AP segment's order backlog has increased by 160% in the last two years to around PLN 145mn (of which more than half are CAB lines), and we believe it could grow to PLN 200mn in the next five years.
Renewable energy sources
The high cost of energy factors has clearly accelerated the development of renewable energy sources. In 2022, the European Union, in response to the cut-off of gas supplies from Russia, proposed the REPowerEU program to increase EU energy sovereignty (through renewable energy). As part of the FIT for 55, the assumptions of a border carbon tax (so-called CBAM) were approved, which will take full effect from 2026 and will make it compulsory for importers (e.g. energy, steel, ammonia) to purchase CO certificates2 to the extent that they generate a carbon footprint. Also in 2022, for the first time ever, the European Union has prepared a solar energy strategy. These initiatives allow us to expect further dynamic growth of renewable energy in Europe. In the case of SecoWarwick products, these are commonly used in wind turbine investments (gearbox components, enrichment of metals used in windmill moving parts), but also in gas/hydrogen blocks (gas turbine blades, heat exchangers). Vector high-pressure gas-cooled vacuum furnace and EV/CAB continuous aluminum brazing furnace.
