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Pirelli Talks EV Tires for the Aftermarket, Investing in North America

Pirelli Tire Claudio Zanardo Ian Coke

You may not be seeing electric vehicles in your shop now, but, as market data predicts, they are coming, and tiremakers are preparing in a variety of ways to provide for this new vehicle segment. Thanks to its OE relationships and technology-driven development, one tiremaker that is making significant strides in this segment is Pirelli, the Italian tiremaker who snagged more than 250 homologations (OE fitments) globally for its “Elect” tire line specifically suited for EVs in 2021.

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“Our speed is driven by the speed of the electric market,” said Claudio Zanardo, CEO of Pirelli Tire North America, who sat down with Tire Review at a recent ride-and-drive event with Lamborghini that ended with attendees watching Pirelli tires track-side at Watkins Glen International (more on that for another story). “Over the next few years, the number of electric vehicles that our dealers will see will be higher and will grow. They need to have the right answer (tire) for that customer, and we have the right answer (tire).”

As a part of this push toward electric, Zanardo said around 70% of the company’s OE fitments in North America are currently for electric and hybrid vehicles, which translates to a higher replacement rate down the line. That’s why the company has started rolling out its Elect line of tires for the aftermarket, starting with the P Zero line, this year. It’s also why Pirelli is investing heavily in the North American market in R&D and capacity as it looks to be the leader in the EV tire segment around the globe and grow its North American presence.

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Zanardo and Ian Coke, chief technical officer for Pirelli Tire North America, explain how Pirelli has skyrocketed its growth in EV fitments, how it continues to hone in on its OE business to capitalize on the market and why growth in North America is a priority on the agenda for the tiremaker.

MW: We’ve been hearing a lot about the Pirelli Elect tires–a moniker that the company has used to label its EV tires. That’s been a huge area of growth for you all. Can you describe the journey from relationships with OEMs to getting those Elect fitments, and how you’re rolling out your aftermarket Elect tire line?

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Zanardo: The Elect product is designed for electric cars and is something that came out of our collaboration with the OEMs. The car industry is going more every day toward electric vehicles, and so you need to develop a specific product– the “perfect fit” for that specific car. So, we started designing the Elect, a product with a lot of characteristics that are needed for electric cars.

The Elect word started with the OEM, and now we are bringing it to the replacement market in two ways: With a dedicated line and also bringing the same OEM tires to the replacement market. Now all cars have an electric version, and with us, an electric-dedicated line. We need to give the “perfect fit” to that car. So, the Elect aligns perfectly with our strategy.

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Coke: For OE, there are some very specific requirements. There’s a load requirement. EVs are, of course, much heavier. There’s a load of resistance for battery range and noise is extremely critical. It is transmitted straight through now. We have around 3,900 homologations cumulative for hybrid and electric vehicles, of which, 300 are hybrid and 244 are BEV (battery-electric vehicles).

Just this year, out of about 250 homologations, 30 to 40 are already BEV. So we can see there’s an acceleration. This is where the market is going. I think it differentiates us because not everybody is capable of producing these tires with the ultra-low rolling resistance compounds with the load ratings and still giving all the performance that the OEMs want. But also, we’ve launched and will continue to expand the Elect range for the replacement market, which is a little bit of a balance between the OE requirements and mileage.

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MW: So, for example, you have the Scorpion or P Zero lines. Those are lines that are available today for ICE vehicles. But with the Elect line, a dealer can go and say, ‘I have an EV in my bay, I should take a look at Pirelli’s Elect line since this denotes that this tire is made for an EV.’

Zanardo: The Elect mark is in some specific products or specific tread patterns, Yes.

Coke: This is something that we see coming forward from the replacement market. Now, with the first generation of EVs going around, people are not getting the mileage that they’ve had in their previous vehicles. These vehicles are very heavy. They have huge amounts of torque. We’ve altered people’s driving styles. Everybody likes to leave the light as fast as they possibly can. And it has an effect on the tires.

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On the replacement side, you’ve got to give the consumer a more balanced tire for the mileage, but without compromising performance. So the noise technology is in there… The tread design is there to improve the contact patch. This is all technology that we build into the replacement line as well.

Zanardo: And our speed is driven by the speed of the electric market as well. Because all OEMs are coming out [with electric models] and we are there. We are one of the leaders in electric-specific product and on the electric OEM’s cars. We want to be there. This is the future. And we are already in the future.

Pirelli-Elect-Winter-Range-Grows-1400

MW: For the aftermarket products, where are you all in terms of rolling out Elect products for the aftermarket, for all your different tire lines, like Scorpion and Cinturato, etc.?

Coke: So, exactly where we are at the moment is with the first line: the P Zero All Season Plus Elect.
Why did we fit that one? Well, the generation of EVs out there is very much limited to that range at the moment, so we went for an all-season. The P Zero has the right speed rating and right load rating for those products that are coming up. I think we went for five fitments originally. It’s in the first phase. It fits with all the Tesla Model 3s worldwide [The Pirelli P Zero Elect replacement tire]. So, that’s a deliberate ploy that fits the market. Bear in mind, these vehicles, like the 2022 Ford Mustang Mach-E, have not been in the market more than 12 months yet. The big challenge coming up will be the next generation… We have Rivian in the market now as well. Electric trucks are coming. So, I think as these vehicle segments come in, then you will see exactly the same pattern coming into the other product lines.

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Zanardo: The market is growing. It’s not huge. And I think people say EV and it’s here…but there’s not many out there overall. But, the growth rate is extremely high. So in a few years, the number of electric vehicles that our dealers will see will be higher and will grow. They need to get used to that and they need to have the right answer for that customer. We have the right answer.

Now, more than 30% of [Pirelli’s] new homologations are on electric and hybrid cars [worldwide]. Around 70% of the new homologations that we take in North America, in particular, are for electric or hybrid or that kind of product. This means that in North America, there is a strong interest and we are working a lot with the electric players. A lot of the new players are here.

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MW: Pirelli announced this year that it’s investing $15 million in its plant in Mexico for the construction of an advanced technology and digitalization hub, as well as R&D facility, for tire production. What was behind the decision to build out R&D at the factory in North America?

Zanardo: The North American market is extremely important in terms of dimensions, in terms of the type of product, in terms of consumers. We are investing a lot in Mexico and we have a new center in Silao, Mexico, in the plant that we have in the state of Guanajuato. We have a plant here in Georgia. We are talking about investment because we want to be in America. We want to be in this region, developing the right product for this type of customer. When investing here, it is fundamental to be near the market. This helps us understand the needs of the market. Having an R&D center in Mexico, and in the biggest factory we have in the region…We know it’s fundamental to be quick on developing new products and to do that, we have to develop in the market.

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North America is becoming more and more important day by day. We are investing and really developing products, investing in people and having an R&D center, having a lot of technology here.
The investment also speaks to the work we do with all the OEMs that are in North America.

Technology hub r&D center
Pirelli announced in May an investment of $15 million over a period of 2 years for the construction of an advanced technology and digitalization hub for tire production at its factory in Silao, Mexico. Pirelli says the Silao R&D center will contribute to increasing the company’s technological and industrial competitiveness throughout the North American region.

MW: All of it goes together. And being close to the market helps with some supply chain issues. Correct?

Zanardo: Yes, it helps because we have been facing a lot of difficulties in terms of logistics across the entire supply chain.

MW: Before Pirelli announced the $15 million investment in Mexico, there was a separate $36 million investment to increase capacity at the factory there. Where does it stand in capacity now?

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Zanardo: At the moment, the factory is now producing around 7 million tires, and 7.2 million is the target that we had with the investment of the $36 million. We’re working in this direction, and in a few months, we should be there with full capacity.

The investment there in the R&D center is an investment for today and for the future. It’s where we will be able to develop new products, test new products and understand the demand.

One important thing is that this year, we are celebrating the 150th anniversary of our brand. The 20th anniversary of the Rome plant in Georgia and the 10th anniversary of the Silao plant. This means that, in particular, focusing on Silao, we never stop investing. We never stop growing. We don’t want to stop growing… because the demand is there. And if you want to grow, you need to invest.

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MW: What do you want your dealers to know about your products, marketing, resources, etc.?

Zanardo: The fact that we are investing in the region. We will never stop investing in order to bring the best product to our customers. So, it’s a matter of doing things together. We need dealers because we need them to go into the market to talk about our product. To explain to the end consumer what the end consumer needs… This is fundamental for us. The role of the dealer is very important, and we are there for them.

Coke: Communicate, communicate, communicate. It needs to be both ways. The more you give, the more that we can do.

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