Leitmotif’s Managing Partner Jens Wiese: “The automotive industry is undergoing its most significant transformation to date”
How are investors approaching circularity, and what significant role does regulation play in changing the automotive industry? To find out, we spoke with Jens Wiese, Managing Partner and co-founder of the transatlantic VC firm Leifmotif, also one of Syre’s first investors. He has extensive experience in the automotive industry, having previously worked at Volkswagen Group, where he was instrumental in their sustainability efforts with battery strategy and led the strategic alliance with Ford Motor Company focused on electric and light commercial vehicles.
First, Leitmotif being one of Syre’s investors - what attracted you about the textile space and Syre’s business model?
"At Leitmotif, we invest in exceptional founders who have the potential to create category-defining companies. Syre, with Vargas and H&M Group as co-founding investors, is a unique venture. Vargas has a strong track record of incubating industrial champions, while H&M Group provides credibility in the textile industry and a significant initial off-take agreement. Together, their clear ambition from the start has been to build a globally leading company for circular textiles.
With the growing demand for circular polyester in the automotive industry and with the Volkswagen Group being our anchor LP, we believe we can be a valuable addition to Syre's investor base."
With your deep experience from the automotive industry– give us your view on the transformation that the industry has gone through in the past years in terms of sustainability?
The automotive industry is undergoing its most significant transformation to date, often summarized by the acronym CASE: Connected, Autonomous, Shared, and Electric. Sustainability, heavily influenced by the regulatory environment, is a primary catalyst for electrification. However, the impact of regulation extends beyond powertrains to include a growing requirement for recyclability.
It's worth noting that the prominence of these drivers varies by region, with China leading in electrification and Europe being on the forefront with regards to circularity."
Textiles, specifically polyester, is a big part of a vehicle. What would be the potential impact by moving towards circular materials?
"The proposed End-of-life vehicles regulation of the European Union mandates that at least 20% of plastic in new vehicles must be recycled, with a further stipulation that 15% of this recycled content must originate from end-of-life vehicles. This presents a significant challenge for manufacturers, as many plastic materials, particularly composites, are difficult to recycle effectively. In contrast, polyester is a plastic that is relatively easy to recycle. We anticipate that its use in vehicles will increase, substituting other plastics, to help meet these new recycling targets.
Furthermore, evolving consumer preferences for sustainable choices are increasingly influencing car manufacturers, who are responding by offering more environmentally friendly options."
What lessons do you think the textile industry in general could learn from the automotive industry's approach to innovation and sustainability?
"The automotive industry is characterized by its scale, its intense competitiveness, continuous innovation, and stringent regulatory environment. It operates with exceptionally high product standards, as vehicles must adhere to rigorous safety regulations and are typically expected to remain operational for over a decade before being decommissioned. Therefore, a material that meets the demanding requirements of the automotive industry is highly likely to satisfy the standards of other industry verticals as well. At the same time, the scale of the industry together with standardization is likely to reduce the cost for consumers."