Keynote by Alexander Vlaskamp (CEO, MAN Truck & Bus) IAA TRANSPORTATION 2022

Thank you, Sarah, for this nice introduction. Dear Minister Altusman, dear industry partners, dear ladies and gentlemen, I'm very pleased to be speaking to you here today right after the official start and our press conference yesterday at the IAA. It's great to be in touch again, and it feels electrified to meet many of you. It feels great to bring electrification to our customers and visitors. On the press day yesterday, most of my interviews circled around how, when, and from where we will do electrification. That is the talk of the town, and it's clear that we as an industry have to answer that for our customers. That is what I will be talking about today. First, there is a strong consensus that man-made emissions, the greenhouse gases we are counter-fighting, we are responsible for, and it's up to us, especially in industrialized countries, to fix it. With our massive innovation here in Germany and at this showcase for international exhibitors, we can fix this. But if we don't succeed, we will destroy further livelihoods beyond 2050, where we want to meet the Paris Agreement to secure a sustainable planet for future generations. That drives us at MAN Truck and Bus. This is not only an industrial stake but also a political one. The European Union has defined and is following the climate agreement to become climate neutral by 2050, which gives us legal certainty and the ability to plan for the future. To meet climate-neutral transport by 2050, we have to start today, here and now. We can discuss obstacles, but we are paid to fix it. We have to switch over to fossil-free drives. As a manufacturer of commercial vehicles, we are called upon to deliver because 98% of the greenhouse gases produced during the operational time of our products come from the use of fossil fuels. Only 2% come from our production and material footprint. So we focus on the use case to tackle the 98%, while also working on a climate-neutral footprint. Looking back, vehicles have become cleaner in various emissions. Data from the Federal Minister of Transport shows that between 1995 and 2019, around 26% of CO2 emissions were saved in heavy truck transportation. That shows the innovation power of our industry. However, this efficiency gain per unit has been wiped away by the growth of society triggering transportation. We reduced 26% per unit, but total transport grew by 78% in that span. As the globe grows, transportation will grow, and we must make it sustainable. To deliver on the EU fleet 2050 climate-neutral target, we have to deliver no fossil drives from 2040. We are committed to that. How do we get there? Biofuels and synthetic fuels are possible but too expensive for B2B. The better solution is battery electric vehicles, and later, when green hydrogen is sufficiently available and at an attractive price, hydrogen could be a range extender. We are testing hydrogen combustion engines and fuel cell drives. The advantage of hydrogen combustion is that the technology is mature and available quickly, but we still need green hydrogen molecules and cost parity. Currently, hydrogen costs 13-14 euros per kilo and is not sustainable. So we will switch much earlier to pure battery electric drives in our trucks and buses, because we can deliver CO2-free commercial vehicles. Battery electric is much more efficient, utilizing 70-75% of the output energy from renewable sources directly into the drive, with only up to 25% losses. It is also much cheaper than hydrogen, and hydrogen availability is too volatile in the next 10-15 years. Furthermore, we need green hydrogen for production of green steel and green chemicals to make our own 2% footprint green. So at MAN Truck and Bus, we see that e beats h2 for the years to come, at least within the next decade. We are focusing on electrification, building on our experience. We delivered hybrid buses since 2011, and thousands are on the roads. Yesterday we received an award for our Lion's City bus, which achieved 550 kilometers in city operations. Our European tour from Munich to Limerick, Ireland, showed that traveling with a city bus is possible even with existing PESCAR electrification and charging locations. We are gaining experience on utilizing batteries efficiently and extending battery life. We have also gained experience with small series of all-electric distribution trucks in many countries, performing half a million kilometers. Our all-electric vans, the TGE, complete our portfolio, with over 1,000 units cruising in cities. Now we are on the brink to electrify our truck range. We showed it yesterday in our press conference. I'm proud of what our engineers, production engineers, and sales and service team have brought up. We are ready to roll out a battery electric truck range in 2024, including megawatt charging standard to make it operational in many use cases. The centerpiece is the new vehicle battery, optimized for heavy load traffic and long endurance of 1.5 to 2 million kilometers. It contains up to six battery packs mounted modularly along the chassis, allowing variation for different use cases. This allows our customers to step into electrification worry-free. The megawatt charging capability is necessary to seriously roll out an electrified truck range. From 2024, we can operate up to 800 kilometers per day, with a 45-minute break to recharge to 70-80%. Battery development is going fast, with improvements in chemistry and software to condition the battery better and longer. To scale up production, we announced a 100 million euro investment in a battery plant in Nuremberg, to scale up production by 2025. This will allow seamless production on the same line in Munich, where conventional and battery electric vehicles are produced on the same line. This is important because if scale-up goes faster, we can run up to 150 trucks per day in Munich. We are also working on the next missing link: the charging infrastructure. We have the trucks and the megawatt charging standard, but we need electrons flowing at depots and along highways. We call for action towards politics to pave the way for electrifying highways. We are taking a leap ahead with a joint venture under the umbrella of Traton Group, together with our sister brand Scania, plus Volvo Group and Daimler Group, to build 1,700 charging locations around main roads in Europe in the next five years. But we need political support to do this faster, break down bureaucracy, and get green electrons from wind and solar into the trucks. This is the biggest challenge. Let's make sure we don't delay. MAN Truck and Bus have the buses, the truck range, the concepts for megawatt charging, and we are investing in charging locations ourselves. We need politics to drive onwards. Let's deliver for a zero-emission future tomorrow. Thank you very much.