BorgWarner Inc. BWA is poised to make great strides in the electrification space, as evidenced by its latest buyout deals and business wins. Here is a sneak peek into the company’s most recent noteworthy events.
BWA to Acquire Santroll Light Vehicle eMotor Unit
BorgWarner and Santroll Electric Auto and Santroll Automotive Components recently announced signing an Equity Transfer Agreement (ETA). Per the ETA, BorgWarner will acquire Santroll Automotive Components, part of Santroll’s eMotor business, for up to ¥1.4 billion, comprising a closing payment of ¥1.1 billion and an earn-out of up to ¥0.3 billion. The transaction will be funded majorly with existing cash balances and is expected to close in the late first quarter of 2022, subject to the satisfaction of customary closing conditions.
The acquisition promises to bolster BWA’s vertical integration, scale and portfolio in light vehicle e-motors with patented eMotor technology while leaving space for increased speed to market.
BWA Concludes Akasol Buyout
BorgWarner concluded its acquisition of Akasol AG. The buyout is expected to significantly ramp up the company’s commercial vehicle and industrial electrification capabilities, empowering it to reap the gains of a fast-growing battery systems market.
Akasol AG has been merged into ABBA BidCo AG, and Akasol common stock will cease trading on the relevant stock exchanges. Sven Schulz, the former CEO of Akasol, will continue in a consulting role with BorgWarner through the second quarter of the year.
BWA Wins Contract for Generator Invertor Program With Distinguished OEM
BorgWarner has signed a contract with a major global OEM to provide high voltage generator inverters for an innovative electrified architecture to charge batteries. The silicon carbide (SiC)-based inverter boasts high levels of continuous current and advanced cooling features to manage the application’s thermal demands. The production is slated to begin in 2024.
The inverters allow continuous operation at 70% of peak current than traditional applications that provide only 40-50% of peak current. The company’s reputation in inverter performance has paved the way for the business win.
BWA Secures its 1st HV eFan System Contract
BorgWarner has been chosen by a major European Commercial Vehicle OEM to provide its eFan system for battery-powered long-haul road transport vehicles to be implemented on vehicles for the European market. The feat marks the company’s first business win for the high-voltage (HV) eFan system. Production is expected to commence in late 2024.
The system also indicates a transition from fossil-fueled engines to carbon-neutral drivetrains across transportation segments.
New generations of fully-electric heavy-duty trucks need dedicated high-voltage thermal management solutions like the eFan system to cool its components. The fan design is optimized for performance and efficiency, and the entire package is completely encapsulated for a reliable long-term operation. It also ensures compatibility with a variety of high-voltage commercial vehicle electrical systems.
With the new HV eFan solution, the company is backing OEMs by helping them abide by increasingly strict emission regulations for heavy-duty vehicle fleets in Europe.
Top Chinese OEM and NEV Brands to Benefit From BWA’s 800V SiC Inverters
BorgWarner has authorized a leading China-based original equipment manufacturer to launch a new, high-end battery electric vehicle (BEV) platform by providing its 800V SiC inverters. The first vehicle model using the platform is expected to begin operation in the first quarter of 2023.
The inverters provide excellent power and driving performance empowering the OEM to target the high-end BEV market and upgrade the brand value.
BorgWarner has also signed a contract with a China-based luxury new energy vehicle brand to supply its new integrated drive module (iDM) equipped with its compact 800V silicon carbide SiC inverter and hairpin electric motor. It is BorgWarner's first 800V iDM global project. The 800V iDM220 improves the range, driving performance and safety of electric vehicles. The new iDM is expected to start production in 2023.
The system ensures higher reliability and adaptability with reduced semiconductor size and increased efficiency. The platform will be manufactured by a fully automated production line that will bolster assembly efficiency and quality.
Zacks Rank & Key Picks
Currently, BorgWarner has a Zacks Rank #3 (Hold). BWA's shares have rallied 3.4% against the industry's decline of 44.4%.
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Some better-ranked players in the auto space are Tesla TSLA, sporting a Zacks Rank #1(Strong Buy) and Dorman Products DORM and Yamaha Motor Co. YAMHF, each carrying a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 15.5% over a year.
Dorman has an expected earnings growth rate of 15.8% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 0.2% upward over the past 60 days.
Dorman’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and met the consensus mark in one. DORM pulled off a trailing four-quarter earnings surprise of 10.41%, on average.
Yamaha has an expected earnings growth rate of 4.15% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 0.56% upward over the past 60 days.
Yamaha’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. YAMHF pulled off a trailing four-quarter earnings surprise of around 94.5%, on average. The stock has also rallied 4.7% over a year.
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