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Introduction & Market Context
BorgWarner Inc. (NYSE:BWA) presented its Q1 2025 investor presentation highlighting the company’s strategic positioning in both traditional combustion and growing electric vehicle markets. The presentation comes as the automotive supplier navigates challenging market conditions, having reported a 5% year-over-year decline in Q3 2024 sales while still outperforming the broader market’s 6% decline.
The company’s stock closed at $29.00 on May 6, 2025, down 1.53% for the day, but showed strength in after-hours trading with a 3.03% gain to $29.88. This mixed performance reflects the transitional period BorgWarner is navigating as the automotive industry continues its gradual shift toward electrification.
Strategic Initiatives
BorgWarner’s presentation emphasized its dual-track strategy of maintaining leadership in traditional automotive components while accelerating growth in electric vehicle technologies. The company highlighted its vision of "A clean, energy-efficient world" and mission to "deliver innovative and sustainable mobility solutions."
As shown in the following chart, BorgWarner has positioned its product portfolio to capitalize on growth opportunities across combustion, hybrid, and fully electric vehicles:
This strategic positioning allows BorgWarner to maintain revenue streams from its traditional business while scaling up its electric vehicle components. The company highlighted that 87% of its 2023 revenue came from EV and emissions-reducing products, demonstrating its progress in transitioning toward cleaner mobility solutions.
A key competitive advantage for BorgWarner is its ability to leverage existing manufacturing facilities and technical expertise to support eProduct growth, as illustrated in this global manufacturing footprint:
The company’s global presence includes 65 manufacturing locations and 19 technical centers across 20 countries, with approximately 38,300 employees worldwide, including around 8,000 engineers. This extensive footprint provides BorgWarner with manufacturing flexibility and proximity to key automotive markets.
Detailed Financial Analysis
One of the most compelling aspects of BorgWarner’s presentation was its illustration of the increasing content opportunity per vehicle (COPV) as the industry transitions from combustion engines to hybrids and battery electric vehicles:
This chart demonstrates how BorgWarner stands to benefit from the industry’s electrification trend, with potential content per vehicle rising from $548 for combustion vehicles to $2,569 for battery electric vehicles. This represents a nearly 5x increase in potential revenue per vehicle, providing a clear growth path as EV adoption increases.
The company’s eProduct sales have shown consistent growth despite market volatility, as illustrated in this three-year trend:
eProduct sales grew from $1.5 billion in 2022 to $2.0 billion in 2023 and reached $2.3 billion in 2024. This growth trajectory comes despite the company’s recent acknowledgment in its Q3 2024 earnings call that it had modestly reduced its eProduct sales forecast for the year.
BorgWarner also emphasized its strong capital return program for shareholders:
Since 2020, the company has returned approximately $3.4 billion to shareholders through various means, including over $1 billion in share buybacks, approximately $696 million in dividends, and the PHINIA spin-off valued at approximately $1.7 billion. This aligns with the company’s recent completion of a $400 million stock repurchase program announced in its Q3 2024 earnings.
Competitive Industry Position
BorgWarner’s presentation highlighted how its foundational technologies support its growth in electric vehicle components, creating a competitive advantage through technical expertise transfer:
This strategic continuity allows BorgWarner to leverage its core competencies in areas like thermal management, drivetrain systems, and electronics as it develops next-generation electric vehicle components. The company claims #1 or #2 market positions in its foundational products, providing a strong base for its expansion into electric vehicle technologies.
The company’s electric vehicle system portfolio demonstrates its comprehensive approach to electrification:
BorgWarner’s electric vehicle offerings span the entire powertrain, from energy storage and management to electric propulsion, thermal management, and power electronic auxiliaries. This integrated approach allows the company to offer OEMs complete solutions rather than just individual components.
Forward-Looking Statements
Looking ahead, BorgWarner outlined three key focus areas for 2025 and beyond:
1. Outgrowing end markets by leveraging core competencies
2. Building on the existing product portfolio through organic and inorganic investments
3. Driving enhanced financial performance through margin expansion and cash generation
The company also highlighted its sustainability commitments, including a 32% reduction in scope 1 and 2 emissions since 2021 and a goal to reduce scope 3 emissions by 25% by 2030 versus a 2021 baseline.
These forward-looking statements come as BorgWarner navigates a challenging market environment. In its Q3 2024 earnings call, the company revised its 2024 sales forecast to between $14.0-14.2 billion, reflecting lower market production and modestly reduced eProduct sales. However, the company also raised its full-year margin outlook to 9.8%-10.0% and increased its adjusted EPS forecast to $4.15-$4.30 per diluted share.
BorgWarner’s presentation demonstrates a company in transition, balancing the maintenance of its traditional business with strategic investments in electrification. While market headwinds persist, the company’s diversified product portfolio, global manufacturing footprint, and strategic focus on both combustion and electric technologies position it to navigate the industry’s ongoing transformation.
Full presentation:
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