Under Shell’s Sky scenario, by 2030, 1 in every 2 cars sold across the world could be an electric vehicle (EV). As the e-mobility ecosystem evolves, OEM participants face multiple challenges, particularly in terms of incorporating products (e-fluids, e-greases) and services (e-charging) that will boost EV performance and driving experience. Working from a foundation of technology leadership, sustainability, customer focus, collaboration and digitisation, Shell, the world’s leading global lubricants supplier for the last 12 years, has been in the vanguard of helping OEMs achieve these goals while driving mobility towards a cleaner, more sustainable future.

To learn more about its initiatives and how the company itself is metamorphosing, Frost & Sullivan’s Dr. Julia Saini, Vice President – Mobility, and Sven Thiede, Director, Energy & Environment and Mobility Practices spoke with Carol Chen, Global Lubricants Marketing VP at Shell.

Julia Saini (JS): The first question is about Shell’s clear leadership role in lubricants. How do you plan to keep this leadership position? What will be the key initiatives that will drive the future of lubricants?

Carol Chen (CC): We have been the number one supplier of lubricants globally for the past 12 years. What really drives us is our commitment to continue providing a credible and trustworthy brand today, tomorrow and in the near future. We will also continue to invest in leading technology in order to deliver the highest performance but with the lowest emissions, whether for passenger cars or trucks or B2B machines, so that we can enable mobility to accelerate businesses even while reducing emissions. With the development of hybrids and EVs, the passenger vehicle landscape will change significantly. The World Economic Forum predicts that the global car parc could double by 2045, and under Shell’s Sky Scenario 1 in every 2 cars sold by 2030 could be EVs. So one of the questions we are motivated to answer is—regardless of whether our customers are driving an ICE, hybrid or EV—how do we deliver a driving experience with the highest performance but with the lowest emission? For example, one of the lubricant products we are pushing for current ICE cars is 0W, based on our pioneering gas to liquid (GTL) technology. 0W delivers high performance compared to competing offerings, supporting an average improvement of 3-4% in fuel efficiency. In other words, it has enabled vehicles to perform better even while reducing their emissions.

Sven Thiede (ST): That’s really quite a lot – 3-4%.

CC: Yes, and that’s due to our technology leadership. At Shell, it is no longer about launching a product; instead, it is about launching a product that pushes performance, while reducing emissions and driving fuel efficiency.

Our newly launched e-fluids product is another example. If you think about EVs, everything is sealed so there is only one chance to get the product right. Then the environment is also much more demanding in terms of the need for thermal/friction/corrosion protection. So this goes back to our technology leadership in that we have tried to provide the highest levels of performance in this environment. It also goes back to our launching a product that enables a superior EV driving experience to satisfy the ever increasing needs of the EV consumer.

Another example is in the area of trucks where our lead lubricant brand Rimula is designed to optimise fuel efficiency for trucks. We have worked with one of our fleet customers, Van der Lee, to improve their fuel efficiency by 2.1%. This is a lot especially when you translate that into the nearly 250 metric tonnes of C02 emissions that can be saved every year. So these are just a couple of examples of how we know the landscape will change significantly in terms of the types of cars, trucks, and machines. For us, the question is how do we provide the technology that will continue to push performance but that will really optimise efficiency, and how do we continue to leverage the trust of our brand so that we can continue to provide credible and trustworthy solutions. As customers evolve, we are working to optimise the customer experience, and offer them higher value.

JS: What areas of e-mobility systems is Shell looking at, maybe not immediately but in the mid- to long term future?

CC: We know that EVs will develop significantly. So we are looking at two areas: one, as I mentioned, is fluid solutions that can make EVs run as efficiently and at the highest performance level as possible, given that there is only one chance to get it right to enable a superior but fuel efficient driving experience. So we are working with several leading OEMs, because developments in both current and future generations of EVs will be very different. We have spent significant resources to ensure that we design the right fluid for EVs.

The second area into which Shell has put in a lot of its effort and energy is the area of e-charging. One of the things that Shell has done here is to acquire New Motion and, more recently, Greenlots. We are also developing our own on the forecourt recharging, fast charging solution. Through these acquisitions and our own development efforts, we are working to create an ecosystem that will provide fast charging on the go, at home and at work, and that will enable the EV driving experience to be as easy and convenient as possible.

JS: This is very relevant because it comes back to the strength of the brand and the trust that customers have in it. There’s brand continuity there. I have a Tesla and the idea that Shell can charge my car gives me the confidence to know that I am safe.

CC: There are two things here. The first one is exactly what you mentioned- trust. I think that the level of trust that a customer and consumer has is in a brand is crucial and has a huge impact in terms of which brand they buy into. So that’s one of the areas we see as being a differentiator. In the area of retail and lubricants, from our global ranking, you can tell that Shell is a name associated with quality and trustworthiness. This will play an increasingly critical role in mobility in the future.

The other element is that our e-charging solution, Shell Recharge in the UK returns to the idea of sustainability and lower emissions deriving from renewable energy. This is about ensuring that when we provide a charging solution, we look at it from end-to-end. It is also about doing the right thing, and in the UK our Shell Recharge units use renewable energy, since we believe it is crucial to supporting a charging solution which, in its totality, has lower emissions.

JS: If we take a step back at a corporate level, what is Shell doing to ensure that people with a leadership role like yours have a commitment to sustainability? What is your KPI?

CC: Firstly, Shell has an ambition to cut the net carbon footprint of the energy products that it sells around the world by around half by 2050. Secondly, deliverables, KPIs, and measures across Shell are geared to promote sustainability. For example, one of the KPIs in my scorecard looks at the percentage of carbon intensity being reduced in a tangible, numeric manner. This is not only for me or my boss, it is for the whole leadership. So that should give you the sense that it’s not only a token commitment to sustainability but that it is highly embedded in people’s KPIs

We have a dedicated AJA team to look at sustainable packaging because packaging is not an easy task to crack. The team has already identified a series of actions, some of which are in the process of being implemented, that will result in a low single digit reduction of CO2 from packaging this year. So again, are we there yet? No. Are we putting resources towards this goal? Yes. Are we taking some steps towards reducing our carbon footprint? Yes. The challenge here will be to see what other bold actions, choices or collaborations we can make to take this up to the next level. For example, we know that 0W is driving very high fuel efficiency. So from last year, we have been focusing on how fast we can grow 0W. As a result of our efforts, 0W in the passenger vehicle area this year has been growing in the high digital double digits as well as in other areas.

There’s lots of areas in the organisation where the leadership wants to ensure that sustainability is not just a concept floating on paper, it’s a number that’s actually embedded in our scorecard and our actions. We know it’s not easy but we are aware it’s critical and so we want to see how we can embed this idea, starting from the leadership and then all the way down to the organisation

ST: How do you measure these KPIs?

CC: Without going into too much detail, there’s a scientific calculation about what is the baseline and then what action is being taken and then based on that checking the carbon intensity reduction across scope 1, scope 2 and, eventually, scope 3. So there’s a whole methodology behind the measuring. That’s one good thing about Shell, it’s very structured and systematic.

ST: The general public might not be so convinced that a big oil company is taking such initiatives towards sustainability. So it is great to highlight such messages to a wider audience. Also, I can see there are some strict KPIs behind it which have an impact on your careers as well and your development.

CC: Shell has announced that from this year onwards our short-term targets for reducing Net Carbon Footprint of the energy products we sell and other measures will be linked to our executive remuneration. That’s very bold; compensation linked to sustainability is no longer talk, it’s serious.

So you can imagine the amount of passion that’s going into these efforts. We are looking at packaging to see how we can push our product to be more efficient. We really need to encourage organisations to think differently and as they begin to think differently, they will realise that they are not doing sustainability for the sake of being able to say that they are but, instead, to see how they can give their customers the best tools they require to improve their driving experience/performance and, at the same time, reduce carbon emissions. These two things ideally go hand in hand.

JS: How do you see the demand for e-fluids evolving? Which regions do you see as being particularly strong now and then stagnating as other regions become stronger? Also, how are you positioning yourself vis a vis the competition? What is your USP? Where is there potential for collaboration in the industry?

CC: At the ‘Make the Future’ event, I was talking to a lot of customers, distributors and suppliers. I would start the conversation by giving them three numbers: 2 billion, double, and 50%. The 2 billion refers to how much the world’s population will grow to by 2050, according to the UN . That’s a significant increase in population. Double refers to the predicted increase in car parc according to the World Economic Forum by 2045, so the number of cars on the roads will increase. And by 50%, I mean that according to Shell’s latest scenario, Sky, 1 in every 2 cars sold by 2030 could be an EV. So the point I was trying to make to them is that the demand for mobility will grow significantly as will the demand for EVs. Given these trends and the demand for lower emissions, the most likely projection so far is that Europe, China and India are the three markets that will grow the fastest. I have not included the US because the relative pace of development compared to Europe has been slower. However, the landscape can change depending on government regulations or incentives for EVs.

EVs are going through significant developmental change; there’s current generation, next generation, and future generation. We have a long history of collaboration with OEMs and this will be one of our competitive strengths that we will leverage. We are currently working with multiple leading OEMS for e-fluids co-development because both e-fluids and EVs go together. We will continue to leverage our technology leadership and work with OEMs as the next generation of EVs is developed. We have also started collaborating with OEMs on next generation cooling technology for EV batteries since this will be one of the most difficult challenges we will face in the future. So this is another area on which we are working through a collaborative approach.

We have been, and will continue to drive, very close collaborations with leading OEMS because that is the way forward. Moreover, when we think of sustainable solutions, there are actually several areas where we are actively looking for collaborations because we realise that no single company can move the needle by itself. One example is packaging. Many companies want 100% of their packaging to be sustainable or recyclable. This is easier said than done. So this is one area where we have actively been reaching out to different companies, suppliers, vendors and even start-ups. This is just one example but as we think about sustainability across the whole value chain, there are multiple areas that we will not be able to solve ourselves so the team is actively looking to collaborate to see how we can all crack this together.

JS: What are major challenges in bringing your new e-fluids product to the customer? Do they say this is a thing of the future and that they don’t believe in it? You might need to emphasise the importance of a sustainability portfolio to OEMs or there might be industries where you might need to educate customer about sustainability. How do you overcome these challenges?

CC: We see our job as projecting and anticipating the needs of the cars on the roads and of our customers, and of how can provide the best solution, regardless of the car parc because there will a long transition to the day when all the cars on the road become EVs. In between, there will three co-existing trends of ICEs, hybrids and EVs. So our conversation with our customers has been that, regardless of the type of car—and there will be meaningful and sizeable volumes of different types of cars for the foreseeable years—how do we provide the best performance and lowest emissions solutions with 0W.

One thing that was simultaneously both surprising and then again not, when talking to our B2B and B2C customers, was the high levels of consciousness about sustainability among OEMs. They are constantly pushing towards fuel efficiency—I don’t know how much is driven by regulation and how much by competition—but the awareness and the demand for collaboration in this area is very high. That is good because this is an area where one company alone can’t move the needle; it needs partnerships and collaboration across companies to move the needle.

JS: What are the major factors that influence the purchase decisions of your customers, your end users? Price is always a factor but do you think the prospect of brand/co-branded offering will be a key selection criteria for customers? Do you think anything is changing?

CC: In general, end consumers are looking for a brand, like Shell, that they trust. A part of winning deals is about whether a company/brand brings in a sense of credibility, reputation and trust. If you look through the lens of a customer/consumer, that trust in a brand will continue. In this context, we are in a really good position to leverage our status as a long-standing no.1 brand. In addition to trust, the second factor centres on whether your product enables the best driving experience for customers? Here, we are talking about the whole ecosystem, including charging, that we are trying to build with EVs. That marks a big shift for Shell. Our CEO talked about it publicly, saying that we will be moving more and more, especially Downstream, towards a customer-centric business. That is, if our customers are looking for a delightful, easy and convenient EV driving experience, then what is our role in terms of leveraging technology, brand, and collaboration to enable such an experience and how can we eventually make our offering “irresistible” to them?

JS: One of the panels in our IM event is about digitalisation in the automotive industry and how both automotive and non-automotive companies are starting to focus on the customer experience. This seems trivial for the automotive industry where they tend to push a product to the customer, but now it is important. Companies like BMW and Volkswagen are creating customer IDs and all of a sudden it’s all about the customer and what the customer wants.

CC: That is the direction in which we are headed. The future is no longer about manufacturing a product and then selling it. That era is gone. The future will be about what the customer wants, how to create that experience along the journey, and how we can anticipate and create that ecosystem by providing the right experience at the right time.

JS: How is Shell as a company for a senior employee? What programmes does the company offer to attract new talent? You mentioned collaborations with start-ups in packaging? Apprenticeship programmes and work-study experience are also very important. Is this something that Shell is looking into?

CC: Shell is evolving to be a lot more customer-centric and the whole digital/mobility/energy transition presents a tremendous challenge but, equally, tremendous opportunity. Among the key things we have actively been asking ourselves is the capabilities and talent we need to lead us through these transitions. Take, for example, digital transformation. It’s not as if Shell is a digital company ; it is not. But we now have a sizeable digital team in my global commercial team and in the retail team who focus on digital transformation. The thinking is that if there is a critical capability that we need to develop in anticipation of future requirements, then how do we shift talent internally, recruit talent externally and then mix them with temporary, high skillset contractors. This is very important to our agenda. We have also launched multiple programmes. Last year, for example, we launched a programme for our senior leadership to uplift their digital capabilities. In September we will be hosting the top 30 General Managers across functions with IMD to focus on how we can improve their digital capacity and capability. Leadership needs to go through a journey. We need to get the right capabilities but also we need to sponsor the right programmes. So we are actively thinking about what’s needed for the future and how do we start building toward that from today.

JS: What is digitalisation to you?

Digital is a big word. The way we look at digital is to see how it can really be an enabler to business. There are a few dimensions at which we are looking. One would be, and this is not news to you, digital data and analytics. How do you digitalise your entire value chain, both internal and external, with data at the core of it? The other is about digital-based services being a revenue model. We have multiple pilots at the moment where we are developing new service solutions. So we believe digital could be a solution to enable new business and revenue models. There is also a third dimension that I, personally, am very excited about and that is digital-— in a very personalised, targeted and scalable manner—disrupting the way we reach the consumer/customer. Nowadays, everybody is being bombarded by information. The question here is how can digital play a role in terms of helping companies give the right information to the right customer at the right time, and with the right offer at the right value, trigger the right action? So we are looking at digital in terms of how it can uniquely and tangibly add value, making sure it’s not consigned to being just a big bubble word.

JS: What is positive about digital and data sharing is that as a customer I do not mind sharing data if the offer you provide me is relevant. It makes my life easier.

CC: Recently the CMO of P&G, my old company, and the CMO of Unilever who has just retired were giving speeches and what makes me smile is that even some of the best consumer goods companies are going through exactly the same journey as we are. The job of marketing is no longer about selling, it is about serving the customer in ways that add value. Digital has become a huge enabler. This was not possible 15 years ago but it is possible now. It is enabling us to think differently about our businesses and our business models.

JS: What is Shell doing in terms of female executive programmes? Shell has among the senior most women in business. It’s a tricky question but what are you doing in terms of gender diversity? What is your professional and personal opinion?

CC: If you ask, whether Shell is there yet, the answer is – No. Across different levels, there are still areas where we need to push for greater gender diversity but we are making great progress. I’ve been at Shell for close to five years (it’ll be five years this July), and was a Chinese female external hire. I had a great experience and if I break it down to say what made a difference to me personally, I would say at the first level it was sponsorship. So from Day 1 when I joined the company, and Shell is the first company I joined after many years at P&G, I was given a career sponsor, a mentor, senior HR coaching and as my line moved , I carried on that sponsorship. It is crucial for companies to have that sponsorship. In my experience, that’s one thing Shell did really well. The second thing in my experience is that there were difficult moments during my integration with Shell because Shell and P&G are two very different companies. Three years ago was one of those moments, because my style, the way I navigate and some areas were not gelling. But there was genuine support in terms of asking if I needed an executive coach. So HR gave me an executive coach for close to 9 months on a one- on-one basis where I could talk openly about the challenges I faced. And the third point is leadership commitment. There has been strong commitment form the leadership in terms of identifying, nurturing, developing and appointing great women leaders. As a woman myself, I would never want to be appointed to a role because I am female. But I have been in multiple conversations where the level of intention about having senior female leaders is evident. Once you prove you are capable at the job, you are given opportunities to excel. That’s important because you need to have the committed leadership that says if you are good and capable, then you will be given an opportunity.

[1] https://www.weforum.org/agenda/2016/04/the-number-of-cars-worldwide-is-set-to-double-by-2040
[2] https://www.un.org/development/desa/en/news/population/world-population-prospects-2019.html
[3] https://www.weforum.org/agenda/2016/04/the-number-of-cars-worldwide-is-set-to-double-by-2040

About Julia Saini

Julia joined Frost & Sullivan in 2001 as co-founder of the European Automotive & Transportation Practice. Over the years she managed several programme areas, from Powertrain to Chassis, led the EIA Mobility consulting business and took on the role of Global Head for Automotive Retail and Aftersales. As of September 2019, Julia has taken on the additional responsibility of heading Frost & Sullivan’s Middle East Consulting Practice, based out of Dubai. Her area of expertise include eCommerce, digitisation and new business models in retail and aftersales.

Julia is trilingual and holds a Master (LLB, LLM) and Doctorandus in Law (Dr.).

Julia Saini

Julia joined Frost & Sullivan in 2001 as co-founder of the European Automotive & Transportation Practice. Over the years she managed several programme areas, from Powertrain to Chassis, led the EIA Mobility consulting business and took on the role of Global Head for Automotive Retail and Aftersales. As of September 2019, Julia has taken on the additional responsibility of heading Frost & Sullivan’s Middle East Consulting Practice, based out of Dubai. Her area of expertise include eCommerce, digitisation and new business models in retail and aftersales.

Julia is trilingual and holds a Master (LLB, LLM) and Doctorandus in Law (Dr.).

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