One of Germany’s largest car suppliers, ZF Friedrichshafen, is accelerating its departure from combustion engine technology and plans to convert its largest gearbox plant to the production of electric vehicle parts, reports business daily Handelsblatt.

The company is in talks to produce first-class electric components in its Saarbrücken plant, which employs 9,000 people and is ZF’s largest production facility, CEO Wolf-Henning Schneider told a conference.

The supplier, headquartered in Friedrichshafen on Lake Constance, also wants to expand its software and IT business in the coming years. “The new cog is the chip,” Schneider said, referring to the main component of gearboxes.

ZF focuses on producing gearboxes for plug-in hybrids (PHEV) at its Saarbrücken plant. BMW is one of its most important customers. But while demand for purely battery-electric cars is rising rapidly, plug-in models are falling behind.

At the same time, policymaker support for subsidising hybrid vehicles is dwindling, because the cars equipped with an electric and a combustion engine contribute little to reducing transport emissions.

ZF is a gearbox specialist, but this component is no longer needed in electric cars, which just have one gear. ZF expects sales of electric car parts to top combustion engine parts by 2030.

Europe’s massive car supplier industry looks set to be more heavily affected by the shift to electric vehicles than the carmakers themselves, as many smaller companies depend on making parts for combustion engines that will no longer be needed in electric cars – for example spark plugs, fuel injection systems, exhaust systems or fuel tanks.

These companies will find it particularly difficult to switch to alternative products.

This article first appeared on Clean Energy Wire.

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