The latest data from the China Automobile Association shows that from January to September, the production and sales of commercial vehicles were 2.426 million and 2.484 million, down 32.6% and 34.2% year-on-year, respectively. As of September, the sales of heavy trucks have formed a “17 consecutive decline”, and the tractor industry has declined for 18 consecutive months. In the face of the continuous downturn in the commercial vehicle market, how to find a new way out of the predicament has become a major issue for relevant supply chain companies.
Faced with this, BorgWarner, the world’s leading provider of powertrain solutions, is targeting electrification as a “new growth point”. “ As part of our momentum, BorgWarner is accelerating its electrification strategy. According to the plan, by 2030, our revenue from electrified vehicles will grow to 45% of total revenue. Commercial vehicle electrification is one of the strategic goals to achieve. Great direction,” said Chris Lanker, vice president of BorgWarner Emissions, Thermal and Turbo Systems and general manager of Asia.
Image credit: BorgWarner
◆ Electrification becomes a new bright spot in the growth of commercial vehicles
The latest data shows that from January to September, the cumulative sales of new energy commercial vehicles in China increased by 61.9% year-on-year, and the penetration rate exceeded 8% for the first time, reaching 8.2%, becoming a bright spot in the commercial vehicle market.
“Supported by favorable policies, the electrification of commercial vehicles in China is accelerating, and it is expected that in the next eight years, the market share of commercial electric vehicles will reach more than 10%; in some cases, even full electrification. At the same time, China Enterprises are also accelerating the transformation of the energy structure to hydrogen energy. The application of hydrogen will also increase in a large area, and FCEV will be a long-term trend.” Chris Lanker pointed out.
In the face of new market growth points, BorgWarner has developed and acquired strategically in recent years. Its products currently used in the electrification of commercial vehicles cover the fields of thermal management, electrical energy, electric drive and hydrogen injection systems , including electronic fans, high-voltage Liquid heaters, battery systems, battery management systems, charging piles, motors, integrated electric drive modules, power electronics, etc.
BorgWarner electrification innovations; Image credit: BorgWarner
At the 2022 IAA International Commercial Vehicle Exhibition held not long ago, the company displayed many of its innovative achievements, which attracted the attention of the industry. Examples include high-energy compact battery systems with innovative flat module architectures . With a height of less than 120 mm, the system is ideal for underbody structures such as light commercial vehicles and buses. In addition, in the face of a new generation of all-electric heavy-duty trucks that require dedicated high-voltage thermal management solutions, BorgWarner has launched a new high-voltage electronic fan eFan system that can be used to cool components such as motors, batteries and electronic equipment. The IPERION-120 DC fast charging pile can charge one vehicle at full power with a power of 120kW, and can also charge two vehicles at the same time… For more product introduction, please refer to the following video:
Video source: BorgWarner
The new energy commercial vehicle market is improving, boosted by many innovative technologies of superimposed enterprises. In recent years, the order volume of BorgWarner electrified products has risen rapidly:
● The eFan system electronic fan has cooperated with a European commercial vehicle OEM;
● The third-generation battery system AKA System AKM CYC cooperates with GILLIG, a leading North American bus manufacturer, and is expected to be launched in 2023;
● AKASOL ultra-high-energy battery system was selected by an electric commercial vehicle company, and it is planned to start supplying in the first quarter of 2024;
● The battery management system (BMS) has been selected to be installed on all manufacturing platforms of B-segment vehicles, C-segment vehicles and light commercial vehicles of a leading global automaker, and it is planned to start in mid-2023.
● The first equipment of the new fast charging station Iperion-120 has been installed by Italian service provider Route220, which will support the development of electric vehicles in Italy;
● Hydrogen injection system is used in off-road vehicles of a European construction equipment manufacturer to support zero-CO2 mobile facilities.
As the electrification of commercial vehicles continues to accelerate and the number of orders continues to increase, BorgWarner’s commercial vehicle business will usher in a new dawn.
◆ Gathering momentum and moving forward , full speed towards electrification
Under the background of the deep transformation of the automobile industry, the transformation of relevant supply chain enterprises to the direction of electrification has become inevitable. In this regard, Borghua is more advanced and decisive.
In 2021, BorgWarner released the “Positive and Forward” strategy, pointing out that by 2030, the proportion of electric vehicle business will increase from the current 3% to 45%. Achieving this big digital jump is no easy feat for a complex auto parts giant.
However, judging from the market performance in the past two years, the relevant progress seems to be faster than expected. According to Paul Farrell, BorgWarner’s chief strategy officer, BorgWarner initially set a target of $2.5 billion in organic EV growth by 2025. The current order book is expected to reach 2.9 billion US dollars, has exceeded the target.
Image credit: BorgWarner
Behind the rapid advancement of the above electrification achievements, in addition to product innovation, rapid mergers and acquisitions expansion also played a pivotal role, which is also a highlight of BorgWarner’s decisive battle for electrification. Since 2015, BorgWarner’s “buy, buy, buy” action has continued. In particular, the acquisition of Delphi Technology in 2020 has made it a great improvement in terms of industry status and electrification strategy development.
According to Gasgoo’s statistics, BorgWarner has made three acquisitions since the release of its strategic goal of gaining momentum and moving forward, namely: the acquisition of German electric vehicle battery manufacturer AKASOL AG in February 2021, and the acquisition of China in March 2022 The motor business of Tianjin Songzheng Auto Parts Co., Ltd., an automotive motor manufacturer ; in August 2022, it acquired Rhombus Energy Solutions, a provider of DC fast charging solutions for electric vehicles . According to Paul Farrell, BorgWarner initially set a goal of closing $2 billion in acquisitions by 2025, and has completed $800 million so far.
Not long ago, BorgWarner once again announced that it has reached an agreement with Beichai Electric Co., Ltd. (SSE) to acquire its charging and electrification business. The transaction is expected to be completed in the first quarter of 2023. It is understood that Hubei Chairi has now provided patented electric vehicle charging solutions to customers in China and more than 70 other countries/regions. The revenue of electrification business in 2022 is expected to be approximately RMB 180 million.
The acquisitions of Xingyun Liushui further consolidate BorgWarner’s leadership in battery systems, electric drive systems and charging businesses, and complement its global business footprint. In addition, the continuous acquisition of Chinese companies not only reflects BorgWarner’s determination to strive for a leading position in the new track battlefield, but also marks the importance of the Chinese market to BorgWarner globally.
In general, the “quick march”-style expansion and layout has enabled BorgWarner to build a supply map of core components in the new energy vehicle field in the short term. And despite the overall downturn in the global auto industry, it has achieved growth against the trend. In 2021, the annual revenue was 14.83 billion US dollars, a year-on-year increase of 12%, and the adjusted operating profit was 1.531 billion US dollars, a year-on-year increase of 54.6%. With the continuous rise of the global new energy vehicle market, it is believed that this leader in the field of power system electrification will usher in greater benefits.
Post time: Oct-29-2022