Supplier scarred by Dieselgate rejects EV future, will invest in combustion tech into 2040s

Lashing out against proposals for upcoming Euro 7 emissions legislation, the CEO of the mammoth auto industry supplier Bosch last week called regulators “fixated” on EVs, and accused the EU of running a “technology monopoly” that chokes all other means of climate innovation. 

The comments underscore a simple truth. Amid new electric-vehicle targets for automakers, hype around EV-related stocks, and stepped-up policies across continents for the retirement of the internal combustion engine, there are some very large companies not yet sold on the idea that battery electric vehicles are the singular future, coming fast. 

As part of its annual report CEO Volkmar Denner spoke of the urgency of climate action. But he had a different interpretation of that than regulators and much of the industry. 

Bosch CEO Volkmar Denner

“Climate action is not about the end of the internal-combustion engine,” said Denner, in comments reported by the Financial Times. “It’s about the end of fossil fuels. And while electromobility and green charging power make road transport carbon neutral, so do renewable fuels.”

Additionally, Bosch board member Stefan Hartung said that the company “will continue to invest in combustion engine technology for at least another 20-30 years.”

In all fairness, that comment was likely made to a global perspective, including markets outside of China, Europe, and North America, which are expected to electrify more rapidly than the rest of the world. But it shows that to this mammoth supplier, it believes there will be a mammoth market segment for ICE vehicles too big to give up—even in 2040 and beyond. 

Bosch was at the core of the Volkswagen diesel scandal, as it was the key supplier for most of the components and systems that related to “defeat device” behavior that would behave differently in particular test conditions, delivering their “clean diesel” promise with low NOx levels only then. In documents relating to the diesel scandal, the supplier did warn VW of some of the legal ramifications.  

Screencap from Volkswagen video explaining diesel emissions

Screencap from Volkswagen video explaining diesel emissions

Despite that, Bosch’s post-Dieselgate move was to double down on diesels. Denner in 2016 called diesels “air cleaning machines,” with emissions that are effectively cleaner than the air they take in—a flawed argument that was parroted by other German executives in the industry for years. 

In 2018 the supplier announced that it had a diesel-technology breakthrough, including technology that would effectively allow diesels to be cleaner than EVs. 

Those products would incorporate artificial intelligence for their control strategies, with highly responsive airflow management and dynamic exhaust-gas recirculation, and announced a new code that “products must not be optimized for test conditions.”

A year later, in 2019, the company announced that it was pivoting to electrified powertrains and fuel cells, including the acquisition of motor maker EM-motive and a partnership with Powercell Sweden AB. The company has invested more than $6 million into EV-related technology; but it’s avoided opportunities to invest in battery tech.

Bosch EV powertrain

Bosch EV powertrain

Bosch argued recently to the EU that diesel and gasoline engines have advanced to the point where they “no longer have an appreciable impact on air quality.”

The company is instead rallying interest around the idea of synthetic fuels, in which it claims gas and diesel vehicles can be made carbon-neutral and “greenhouse gas becomes a raw material.” 

This may prove an uphill battle for suppliers like Bosch who want to continue perfecting combustion-engine technology. As global oil giants like Shell and BP acquire charging companies and EV-related tech, and the industry scales up lithium-ion battery production, the lack of a consensus on a process or standard for scaling up synthetic fuels doesn’t bode well for such an outcome at this stage.