Automotive News - Traverse City - August 6, 2019 - 12

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TUESDAY, AUGUST 6, 2019

Why BorgWarner expects hybrids to fuel growth
Published June 24, 2019,
in Automotive News

RANKFURT - BorgWarner
Chief Technology Officer
Hakan Yilmaz says the propulsion specialist is poised to
gain from a rapid shift to electrified
powertrains, a move driven in part by
tougher European emissions standards that start to take effect next year.
Yilmaz, 41, who joined BorgWarner in
2018 after more than 15 years with
Robert Bosch, says the supplier's
products will help automakers reach
this short-term and longer-range targets. He explained why in an interview

last month with Automotive News Europe Managing Editor Douglas A.
Bolduc during BorgWarner's media
day here. Here are edited excerpts.
Q: Which BorgWarner products
offer the greatest hope for the
company's future?
A: If you are talking about immediate impact, we see a massive volume
shift toward 48-volt and high-voltage
hybrids, driven by the tougher CO2
legislation [that starts to take effect
next year in Europe]. There, our primary focus is on the 48-volt side.
Secondly, we are seeing great demand for our P2 on-axis drive mod-

ule [that converts a combustion-powered vehicle
into a hybrid without
changing the engine or
transmission]. It is an easy
way of achieving hybridization, because all you need
to do is open up a space of
about 6 inches between
your engine and transmission and package it in.

&
QA

can upgrade that to a
high-voltage solution. For
2030, you can upgrade that
system by adding some
batteries and downsizing
your transmission to come
up with a plug-in hybrid.
That means if you add the
P2 architecture to your
propulsion system now, it
is there to stay for at least a
decade. This is why we are
seeing such strong growth.

Is the product scalable?
HAKAN
Yes. You can start with a
YILMAZ
48-volt hybrid P2 on-axis
Could you quantify that?
for the 2020-22 time frame, and on
Eighteen customers have ordered
the same architecture in 2025 you or are in development with us on

pieces of the P2 that they will integrate in-house. Two of those customers have bought the complete P2
module. Our first launch is in China
at the end of next year. And we are
not talking about a few thousand
units. We are talking about multiple
hundreds of thousands of units.
How is BorgWarner positioned
for providing components for
full-electric vehicles?
With the addition of our planned
partnership with battery module and
pack supplier Romeo Power Technology, we will have the entire ecosystem
- all the way from plug to wheel.
How does BorgWarner decide
what to add and cut from its
parts portfolio?
We have a very structured and systematic portfolio management team
that looks at the market potential
and the market growth. Then we ask
ourselves: Can we keep the lead position in the market? Is the market
growing?
We are investing heavily in areas
where we think we can grow with the
market or beat the market. And we
have some products moving down,
completing their life cycles, like our
thermostat business, and we decide
to divest. As a publicly traded company we cannot get emotionally attached to our products. We have to
be very pragmatic. If we don't see the
growth and it doesn't fit our future
portfolio, we find a better owner for
that business.
What spaces does BorgWarner
need to fill?
Our primary focus is to build up our
scale and capabilities in power electronics. This includes inverters, onboard chargers, the entire power electronics system. We are looking at organic and inorganic options every day.
How do BorgWarner's turbochargers fit into this electrified
future?
We are seeing a massive move
toward high-volume hybridization.
This is great for us because we're
growing about two times faster than
the market itself. And the hybrid architectures with the biggest growth
are very synergistic with turbos.
Therefore, in Europe especially, turbochargers seem to be here to stay
and will continue to grow with the
hybrid market.
Is that true even with plug-in
hybrids and electric vehicles?
You might need fewer turbos. But
even so, most of the automakers are
announcing that they will keep their
turbo engines even with plug-in hybrids because customers are used to
the performance they get with a turbo.
Do these changes require new
Tier 2 and Tier 3 suppliers?
The products that we have today
are very different than the product
we had five years ago. And the products that we will have in the next five
years will be very different than what
we have now. Therefore, we have to
adapt our supplier base continuously, otherwise we will be behind. In
the electrification market, if you are
not one of the first three in the market before the market consolidates,
you're out. It is very competitive. m

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Automotive News - Traverse City - August 6, 2019

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