BorgWarner (BWA) The Wells Fargo 2024 Industrials Conference summary

Strategic positioning and market trends

• Maintains a strong balance sheet with capacity for share buybacks and disciplined capital allocation.

• Holds a leading position in China, with 75% of China revenue from local OEMs and 95% for e-products.

• Guidance is considered conservative, not relying on a major second-half recovery.

• Strategy focuses on growth in e-products for hybrids and BEVs, while maximizing value in combustion products.

• 80% of business remains in combustion, where it is a global leader, but e-product revenue is scaling rapidly.

Product and technology portfolio

• Offers a robust portfolio: inverters, power electronics, motors, thermal management, and battery packs.

• E-products are fungible between BEV and hybrid, supporting flexibility in powertrain strategies.

• Content per vehicle is about 5x higher for BEV and high-voltage PHEV compared to combustion.

• Turbocharger take rates are higher in hybrids, though with slightly lower dollar content per unit.

• Maintains top global positions in drive motors, inverters, and high-voltage coolant heaters.

Regional and market dynamics

• China and Europe lead in hybrid and BEV adoption, with the U.S. lagging but expected to shift due to regulations.

• In China, high-voltage PHEVs are the fastest-growing segment; in Europe, turbo penetration is 92% vs. 44% in the U.S.

• U.S. automakers are reassessing outsourcing as EV volumes fall short of expectations, but decisions are pending.

• Local presence in China positions the company as a preferred partner for Chinese OEMs expanding globally.