BorgWarner Signs International Strategic Relationship Agreement with FinDreams Battery for LFP Battery Packs

Rhea-AI Summary

BorgWarner has entered into a strategic relationship agreement with FinDreams Battery, a subsidiary of BYD Company Limited, to be the exclusive non-OEM localized manufacturer of LFP battery packs for commercial vehicles in Europe, the Americas, and select regions of Asia Pacific. The agreement, lasting 8 years, allows BorgWarner to utilize FinDreams Battery's blade cells and intellectual property for battery pack design and manufacturing. This partnership aims to meet the increasing demand for LFP cells and further electrify the commercial vehicle market segment.

Insights

Automotive Industry Analyst

The strategic relationship between BorgWarner and FinDreams Battery signifies a substantial move within the automotive sector, particularly in the commercial vehicle segment. The decision to partner with FinDreams Battery for the manufacturing of LFP (Lithium Iron Phosphate) battery packs could position BorgWarner as a key player in the transition towards electric commercial vehicles. LFP batteries are known for their safety, long life cycle and cost-effectiveness compared to other lithium-ion batteries, which can be a game-changer in the cost-sensitive commercial vehicle market.

The eight-year duration of the agreement suggests a long-term commitment that could lead to stable revenue streams for BorgWarner. It's also indicative of the confidence in LFP technology's future market share. Given that BorgWarner will have access to FinDreams Battery's intellectual property, this could enhance their competitive edge in battery pack design and manufacturing processes.

Market Research Analyst

From a market perspective, this collaboration has the potential to disrupt the commercial vehicle market in multiple regions. The benefits of LFP battery packs, such as lower costs and increased safety, align with the growing demand for environmentally friendly and economically viable commercial transportation solutions. BorgWarner's established presence in Europe, the Americas and parts of Asia Pacific coupled with FinDreams Battery's technological expertise could lead to increased market share and influence in the electric vehicle (EV) space.

Investors should note the timing of this agreement, which comes at a point where there is a heightened focus on supply chain localization and geopolitical concerns. The ability to produce these battery packs locally may reduce dependency on specific markets and mitigate risks associated with international trade tensions or supply chain disruptions.

Financial Analyst

Financially, the agreement between BorgWarner and FinDreams Battery could have significant implications for BorgWarner's revenue growth and profitability. The exclusive rights to manufacture and localize LFP battery packs using FinDreams Battery's blade cells could lead to a unique market position and potentially higher profit margins due to intellectual property licensing. However, it is crucial to monitor the capital expenditures associated with setting up manufacturing capabilities for these new battery packs, as well as the adoption rate of LFP technology in the commercial vehicle sector.

It is also important to consider the possible impact on BorgWarner's stock performance. The announcement could be perceived positively by the market, reflecting BorgWarner's proactive approach to capturing a share of the growing EV market, which may lead to an uptick in investor confidence.

• BorgWarner to be the preferred manufacturer of LFP battery packs for commercial vehicle markets (class 3 and above) in Europe, the Americas, and parts of Asia Pacific 

AUBURN HILLS, Mich., Feb. 8, 2024 /PRNewswire/ -- BorgWarner Inc. (NYSE: BWA) today announced a strategic relationship agreement with FinDreams Battery, a subsidiary of BYD Company Limited. Under this agreement, BorgWarner will be the only non-OEM localized manufacturer, unaffiliated with FinDreams Battery, with rights to localize LFP battery packs for commercial vehicles utilizing FinDreams Battery blade cells in Europe, the Americas, and select regions of Asia Pacific. The duration of the agreement is 8 years.

In addition to receiving state-of-the-art blade cells for manufacturing LFP battery packs in the covered geographies, BorgWarner will receive a license from FinDreams Battery to use FinDreams Battery's intellectual property related to its battery pack design and manufacturing process.

"The lithium iron phosphate battery chemistry is an exciting technology that is becoming increasingly important globally due to its cost competitiveness. We have seen increased demand from our customers for packs with LFP cells," said Frédéric Lissalde, President and CEO of BorgWarner. "We believe FinDreams Battery is right for BorgWarner in this area, with its 20-plus years of experience and success in LFP batteries for the mobility sector across China and Europe. We are excited to work together to develop cutting-edge cell and battery pack technology to further electrify this market segment."

Micheal He, President and CEO of FinDreams Battery, said, "At the key timing of complicated geopolitics and starting point of lithium ion phosphate electrification for overseas commercial vehicles, the overseas localization cooperation with BorgWarner on battery packs using FDB blade cells in the territory takes the advantages of each other's strengths, provides diversified and flexible options for overseas customers, and also offers extra access to localized battery packs using FDB blade cells for overseas customers. Devoted to the vision of 'let people use batteries carefree', FDB will cooperate with BorgWarner to make joint efforts for the speedy electrification of the overseas commercial vehicle market."

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 strategic relationship agreement between BorgWarner and FinDreams Battery about?

BorgWarner has entered into a strategic relationship agreement with FinDreams Battery to be the exclusive non-OEM localized manufacturer of LFP battery packs for commercial vehicles in Europe, the Americas, and select regions of Asia Pacific.

How long is the duration of the agreement between BorgWarner and FinDreams Battery?

The duration of the agreement is 8 years.

What technology is BorgWarner focusing on for the commercial vehicle market?

BorgWarner is focusing on lithium iron phosphate (LFP) battery chemistry for the commercial vehicle market.

Who is the President and CEO of BorgWarner?

The President and CEO of BorgWarner is Frédéric Lissalde.

Who is the President and CEO of FinDreams Battery?

The President and CEO of FinDreams Battery is Micheal He.