BorgWarner Secures Contract Extending High Voltage Coolant Heater Business with Global OEM

Rhea-AI Summary

BorgWarner has extended its contract to supply 400V high voltage coolant heaters (HVCH) to a major global OEM for use in electric SUVs and passenger trucks. The technology will be manufactured at BorgWarner's Cadillac, Michigan facility and is designed to regulate battery pack temperature and cabin heating in EVs. This is one of three contracts secured with North American OEMs for BorgWarner's HVCH, and the company is the only supplier producing American-made HVCH technology. The HVCH is fast-responding and compact, providing a source of heat for cabin comfort in extreme temperatures down to -40˚C. BorgWarner has also won business for its HVCH technology in other regions, including Europe.

Insights

Automotive Industry Analyst

The extension of BorgWarner's contract to supply high voltage coolant heaters (HVCH) to a major global OEM signifies the company's strengthening position in the electric vehicle (EV) component market. This development is particularly pertinent for stakeholders given the accelerating shift towards EVs in the automotive industry. The HVCH is a critical component for EV efficiency, as it regulates both the battery pack temperature and cabin heating, which are essential for optimal battery performance and user comfort, especially in extreme weather conditions.

From a market perspective, BorgWarner's ability to secure multiple contracts in North America and its expansion into European markets, reflects a growing demand for its HVCH technology. This could potentially lead to increased market share and revenue streams for BorgWarner, making it a key supplier in the EV space. Stakeholders should note the strategic significance of local production in reducing lead times and shipping costs, which can enhance the competitiveness of BorgWarner's offerings.

Financial Analyst

The announcement of BorgWarner's contract extension for HVCH technology has direct financial implications. The focus on light-vehicle platforms, specifically SUVs and passenger trucks, targets high-volume segments that are expected to grow as consumer preferences shift. The financial impact on BorgWarner's revenue growth could be substantial, considering the scale of the contract and the exclusivity of being the only American-made HVCH technology supplier.

Investors should monitor BorgWarner's capital expenditures and the efficiency of its Michigan facility's operations, as these factors will influence profit margins and the company's ability to meet increased demand. Additionally, BorgWarner's collaboration with OEMs in proximity to its technical center may lead to cost savings and innovation benefits, potentially improving its long-term profitability and stock performance.

Supply Chain Expert

The localization of BorgWarner's HVCH manufacturing in Cadillac, Michigan is a strategic move that could have a positive impact on the company's supply chain dynamics. By aligning its production facility close to the customer's technical center, BorgWarner is likely to achieve more efficient logistics and better synchronization with the OEM's production schedules. This proximity can lead to quicker turnaround times and enhanced collaboration, which is particularly important when dealing with high-technology components for EVs.

Furthermore, the focus on local manufacturing of American-made HVCH technology could resonate with both consumer preferences and potential trade policies favoring domestic production. This approach may reduce risks associated with international supply chains, such as tariffs and transportation disruptions, thereby providing a more stable and controlled supply chain environment.

• High voltage coolant heaters (HVCH) will be incorporated on electric SUVs and passenger trucks
• Technology regulates battery pack temperature and cabin heating in EVs
• To be manufactured at BorgWarner's Cadillac, Michigan facility

AUBURN HILLS, Mich., Feb. 8, 2024 /PRNewswire/ -- BorgWarner has extended its contract to supply 400V high voltage coolant heaters (HVCH) to a major global OEM. The technology will be used on the automaker's battery-electric light-vehicle platforms, specifically SUV and passenger truck programs. The business win is one of three contracts secured with North American OEMs for BorgWarner's HVCH. 

"We are thrilled to extend our contract with this OEM and to supply our robust HVCH technology to the company's largest vehicle platforms," said Joe Fadool, President and General Manager, BorgWarner Emissions, Thermal and Turbo Systems. "BorgWarner prides itself on providing in-depth technical expertise for our partners and delivering exceptional local production support to reduce lead times and shipping costs, ultimately accelerating our customers' electrification initiatives." 

The robust 400V HVCH is designed to effectively manage the battery pack's temperature to achieve optimal charging efficiency, battery life, durability performance and driving range. It also provides a source of heat for cabin comfort in outside temperatures down to -40˚C. BorgWarner's HVCH is a fast-responding, compact solution for pure BEVs, featuring a high power density and low ripple current. This specific HVCH technology is more powerful than those on smaller vehicle types to support the application to larger SUVs and passenger trucks.

The HVCH was developed at BorgWarner's technical center in Auburn Hills, Michigan near the customer's technical center, allowing for seamless collaboration. The HVCH will be manufactured at BorgWarner's facility in Cadillac, Michigan. Currently, BorgWarner is the only supplier producing American-made HVCH technology.

In addition to North America, BorgWarner has recently won business for its HVCH technology in other regions, including a premium European OEM's mid-size electric vehicle platform in Europe and a global OEM's European light vehicle program.

About BorgWarner
For more than 130 years, BorgWarner has been a transformative global product leader bringing successful mobility innovation to market. Today, we're accelerating the world's transition to eMobility – to help build a cleaner, healthier, safer future for all. 

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You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: supply disruptions impacting us or our customers, such as the current shortage of semiconductor chips that has impacted original equipment manufacturer ("OEM") customers and their suppliers, including us; commodity availability and pricing, and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; competitive challenges from existing and new competitors including OEM customers; the challenges associated with rapidly changing technologies, particularly as they relate to electric vehicles, and our ability to innovate in response; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; disruptions in the global economy caused by wars, including the wars in Ukraine and the Middle East; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis; the possibility that our recently-completed tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended benefits for us; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; our dependence on automotive and truck production which is highly cyclical and subject to disruptions; our reliance on major OEM customers; the extent, duration, and impact of the recent and any future strikes involving some of our OEM customers and any actions such OEM customers take in response; fluctuations in interest rates and foreign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the outcome of existing or any future legal proceedings, including litigation with respect to various claims, or governmental investigations, including related litigation; future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; impacts from any potential future acquisition or disposition transactions; and the other risks noted in reports that we file with the Securities and Exchange Commission, including Item 1A, "Risk Factors" in our most recently filed Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.

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SOURCE BorgWarner

FAQ

What is the technology that BorgWarner has extended its contract to supply to a major global OEM?

BorgWarner has extended its contract to supply 400V high voltage coolant heaters (HVCH) to a major global OEM.

Where will the HVCH technology be manufactured?

The HVCH technology will be manufactured at BorgWarner's Cadillac, Michigan facility.

What are the main features of the HVCH technology?

The HVCH technology is designed to regulate battery pack temperature and provide a source of heat for cabin comfort in outside temperatures down to -40˚C.

In which regions has BorgWarner recently won business for its HVCH technology?

BorgWarner has recently won business for its HVCH technology in other regions, including Europe.

What types of vehicles will the HVCH technology be used on?

The HVCH technology will be used on the automaker's battery-electric light-vehicle platforms, specifically SUV and passenger truck programs.

What is the power source of the HVCH technology?

The robust 400V HVCH is designed to effectively manage the battery pack's temperature to achieve optimal charging efficiency, battery life, durability performance, and driving range.