BorgWarner Inc. (BorgWarner) operates as a global product leader in clean and efficient technology solutions for combustion, hybrid, and electric vehicles.
The company’s products help improve vehicle performance, propulsion efficiency, stability and air quality. The company manufactures and sells these products worldwide, primarily to original equipment manufacturers (‘OEMs’) of light vehicles (passenger cars, sport-utility vehicles (‘SUVs’), vans and light trucks). The company’s products are a...
BorgWarner Inc. (BorgWarner) operates as a global product leader in clean and efficient technology solutions for combustion, hybrid, and electric vehicles.
The company’s products help improve vehicle performance, propulsion efficiency, stability and air quality. The company manufactures and sells these products worldwide, primarily to original equipment manufacturers (‘OEMs’) of light vehicles (passenger cars, sport-utility vehicles (‘SUVs’), vans and light trucks). The company’s products are also sold to OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications). The company also manufactures and sells its products to certain tier one vehicle systems suppliers and into the aftermarket for light, commercial and off-highway vehicles. The company operates manufacturing facilities serving customers in Europe, the Americas and Asia and is an original equipment supplier to nearly every major automotive OEM in the world.
Strategy
In 2021, the company announced its accelerated electrification strategy. There were three primary elements of the strategy: profitably scaling organic growth in electric vehicles (‘EVs’); executing mergers and acquisitions that expand its EV products; and optimizing its combustion portfolio through planned dispositions. In June 2023, the company announced the next phase of its strategy, which focused on advancing its position as a leader in eProducts (all products utilized on or for EVs plus those same products and components that are included in hybrid powertrains whose underlying technologies are adaptable to those used in or for EVs), while maximizing the value of its combustion portfolio or Foundational products (all products utilized in internal combustion engines plus those same products and components that are also included in hybrid powertrains).
The company’s strategy is to focus on profitable growth across its technology-focused product portfolio that supports electric, hybrid, and combustion vehicles. This entails growing its product portfolio through organic investments and technology-focused acquisitions. The company’s balanced portfolio is particularly critical as the automotive industry continues to see electric vehicle adoption volatility across different regions.
Segments
The company operates through four segments: Turbos & Thermal Technologies, Drivetrain & Morse Systems, PowerDrive Systems, and Battery & Charging Systems.
Turbos & Thermal Technologies
Turbos & Thermal Technologies segment develops and manufactures products to improve fuel economy, reduce emissions and enhance performance. Turbos & Thermal Technologies’ segment’s technologies include turbochargers, eBoosters, eTurbos, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, and battery heaters. Turbos & Thermal Technologies’ segment’s emissions, thermal, and turbocharger systems provide several benefits, including increased power for a given engine size, improved fuel economy, reduced emissions and optimized temperatures in propulsion systems and vehicle cabins.
Turbos & Thermal Technologies’ segment’s powertrain products include an array of highly engineered products that complement and enhance the efficiency improvements delivered by many other air management technologies.
Drivetrain & Morse Systems
Drivetrain & Morse Systems’ segments’ technologies include control modules, friction and mechanical clutch products for automatic transmissions, torque-management products and coupling systems. Additionally, Drivetrain & Morse Systems’ segment’s products include chain systems, as well as variable camshaft phasing products.
Drivetrain & Morse Systems’ segment’s friction and mechanical products for automatic transmissions, including dual clutch modules, friction clutch modules, friction and separator plates, transmission bands, torque converter clutches, one-way clutches and torsional vibration dampers. Controls products for automatic transmissions feature electro-hydraulic solenoids for standard and high-pressure hydraulic systems, transmission solenoid modules and dual clutch control modules.
Drivetrain & Morse Systems’ segment’s torque management products include rear-wheel drive (‘RWD’) and all-wheel drive (‘AWD’) transfer case systems, front-wheel drive (‘FWD’)-AWD coupling systems and cross-axle coupling systems. The segment is developing electronically controlled torque management devices and systems that will benefit vehicle energy efficiency and vehicle dynamics.
Drivetrain & Morse Systems’ segment’s chain system products are used on engines in on- and off-road vehicles to drive camshaft and other auxiliary drives, in transmissions for torque transfer and some drivetrain applications. The variable cam phasing products are used for variable control of engine exhaust and intake valves to control air- and gas-exchange in the engine.
PowerDrive Systems
PowerDrive Systems’ segment’s products and technologies provide industry-leading performance and efficiency with quick-to-market solutions powering current and next-generation electric and hybrid vehicles.
PowerDrive Systems’ segment’s technologies, including power electronics, such as inverters, onboard chargers, DC/DC converters and combination boxes (multiple combined power electronics components). Rotating electric machines are also part of the PowerDrive Systems’ portfolio, including eMotors and generators, as well as fully integrated drive modules (iDM) consisting of inverter, eMotor and gear reducer. Additionally, PowerDrive Systems’ products include electronic controls, such as engine control units, transmission control units, battery management systems, propulsion controllers, and domain controllers.
PowerDrive Systems’ segment’s inverter products power many of the global leading electric and hybrid vehicles. Additionally, PowerDrive Systems’ iDMs combine all the benefits of its inverters, eMotors and gear reducers in a single package optimized for cost, performance, noise vibration and harshness and packaging. iDMs contain full software that offers functional safety and cybersecurity. Applications of iDMs include a wide range of electric and hybrid vehicles globally.
Battery & Charging Systems
Battery & Charging Systems’ segment’s products drive electrified propulsion forward by providing high-performance lithium-ion battery systems for electrified bus, truck- and off-highway applications and DC (direct current) fast chargers suitable for all types of electric vehicles.
Battery & Charging Systems’ segment’s products include a nickel manganese cobalt battery pack product line and lithium iron phosphate battery packs. The proprietary battery management system provides state-of-the-art functionality like cybersecurity, functional safety and conformity with EU regulations- and ASPICE. These come with the relevant on- and off-highway, as well as marine certifications and are liquid cooled for cycle life up to 6,000 cycles and megawatt charging capability.
Battery & Charging Systems segment’s expands the global charging infrastructure with innovative DC-fast charging solutions. These are available in integrated and distributed solutions across a wide range of power levels and are based on a modular high-power platform design, with a focus on uptime performance and user experience.
Product Lines and Customers
During the year ended December 31, 2024, approximately 81% of the company’s net sales were for light-vehicle applications; approximately 10% were for commercial-vehicle applications; approximately 7% were for off-highway vehicle applications; and approximately 2% were to distributors of aftermarket replacement parts.
In the year ended December 31, 2024, the company’s customers were Ford and Volkswagen. Its worldwide sales in 2024 to Ford and Volkswagen constituted approximately 13% and 10% of its 2024 consolidated net sales, respectively. Sales to the company’s top ten customers represented 67% of sales for the year ended December 31, 2024.
The company’s automotive products are generally sold directly to OEMs, substantially pursuant to negotiated annual contracts, long-term supply agreements or terms and conditions as may be modified by the parties. Deliveries are subject to periodic authorizations based upon OEM production schedules. The company typically ships its products directly from its plants to the OEMs.
Sales and Marketing
Each of the company’s businesses within its reportable segments has its own sales function. Account executives for each of the company’s businesses are assigned to serve specific customers for one or more businesses’ products. Account executives spend the majority of their time in direct contact with customers’ purchasing and engineering employees and are responsible for servicing existing business and for identifying and obtaining new business.
Seasonality
The company’s operations are directly related to the automotive and commercial-vehicle industry. Model changeovers and vacations during the summer months have generally resulted in lower sales volume in the company’s third quarter, and in China, it typically experiences lower sales in the first quarter (year ended December 2024) due to the Chinese New Year.
Disposition
PHINIA Inc.
On July 3, 2023, the company completed the previously announced Spin-Off of its Fuel Systems and Aftermarket segments by the distribution of 100% of the outstanding common stock of PHINIA to holders of record of common stock of it on a pro-rata basis. In December 2024, the company and PHINIA executed an amendment to the original transition services agreement to extend certain engineering services until September 30, 2025.
Intellectual Property
The company has approximately 5,190 active domestic and foreign patents and patent applications pending or under preparation and receives royalties from licensing patent rights to others.
The company owns the ‘BorgWarner’ trade name and numerous trademarks which are material to its business.
Competition
The company’s major non-OEM competitors are Robert Bosch GmbH, Denso Corporation, Garrett Motion, Hitachi, Ltd., Magna Powertrain (an operating unit of Magna International Inc.), Valeo, Schaeffler Group and Contemporary Amperex Technology Co., Limited.
Regulations
The company works collaboratively with a number of stakeholder groups, including government agencies, such as the National Highway Traffic Safety Administration, its customers and its suppliers to proactively engage in federal, state and international public policy processes.
History
BorgWarner Inc., a Delaware corporation, was founded in 1928. The company was incorporated in 1987.