BorgWarner Solidifies Extended Wastegate Turbo Contracts with Major OEM

Rhea-AI Summary

BorgWarner (BWA) has extended its contracts with a major North American OEM for wastegate turbocharger programs targeting midsized gasoline engines. The extension will continue through 2028 and beyond, supplying turbochargers for the automaker's midsized and large SUVs, and truck applications.

The wastegate turbo technology features electrically actuated wastegate actuators that enable precise boost level control, improving fuel efficiency and reducing emissions. The robust design focuses on lightweighting and durability while delivering quick boost response and powerful performance.

The partnership, spanning over 10 years, involves supplying one to two turbochargers per engine platform, depending on specifications. The turbochargers amplify engine output by generating more horsepower in a smaller, more compact package, with each unit optimized for specific performance requirements.

Positive

• Contract extension secured through 2028 and beyond with major North American OEM
• Technology improves fuel efficiency and reduces emissions
• Versatile application across multiple vehicle platforms (SUVs and trucks)

Negative

• None.

Insights

Automotive Technology Analyst

This contract extension carries significant strategic and financial implications for BorgWarner's market position. The deal secures a stable revenue stream through 2028 and beyond, particularly valuable in the cyclical automotive components sector. The extension with a major North American OEM - likely one of the Big Three automakers - suggests annual revenues in the hundreds of millions given the application scope across multiple SUV and truck platforms.

The technology aspect is particularly noteworthy from a competitive standpoint. The electrically actuated wastegate design represents a premium positioning in the turbocharger market, offering superior boost control compared to pneumatic alternatives. This technological edge helps defend against pricing pressure from lower-cost competitors, especially from Asian manufacturers.

Most crucially, this extension demonstrates BorgWarner's successful navigation of the auto industry's transition period. While the company is investing heavily in electrification, this contract shows how traditional ICE components can remain profitable through the 2020s. The focus on fuel efficiency and emissions reduction with these turbochargers also aligns with tightening regulations, providing automakers a cost-effective way to meet standards without full electrification.

The extension's timing through 2028 is strategically significant, as it bridges the gap during the gradual EV transition while providing steady cash flow to fund BorgWarner's electric mobility initiatives. This balanced approach to portfolio management should resonate well with investors concerned about the company's ability to manage the ICE-to-EV transition.

• Wastegate turbocharger technology to be deployed on midsized gasoline engines
• Robust design enables quick boost response and powerful performance
• Extension highlights BorgWarner's longstanding and trusted relationship with OEM

AUBURN HILLS, Mich., Feb. 6, 2025 /PRNewswire/ -- BorgWarner, a global product leader in delivering innovative and sustainable mobility solutions for the vehicle market, is continuing its partnership with a major, North American-based OEM by extending contracts on several wastegate turbocharger programs for midsized gasoline engines. The turbocharged engines will continue to power several of the automaker's midsized and large SUVs, as well as truck applications, with production to continue through 2028 and beyond.

The reliable wastegate turbo technology features a robust design that enables lightweighting and durability, and delivers a quick boost response and powerful performance. All turbochargers making up the extension feature wastegate actuators to help release excess built up energy within the engine. Additionally, they are all electrically actuated, allowing for more precise control of boost levels, improving fuel efficiency and reducing emissions.

"BorgWarner has a longstanding and trusted relationship with this OEM, having supplied them with our turbochargers for more than 10 years," said Volker Weng, Vice President of BorgWarner Inc. and President and General Manager, Turbos and Thermal Technologies. "These platform extensions are a testament to the strong collaboration between our engineering teams and we look forward to continuing our work together through the rest of this decade and beyond."

BorgWarner's wastegate turbochargers significantly amplify output of the engine, generating more horsepower, which enables a more powerful engine in a smaller, more compact package. The number of turbos needed per engine varies – some of the OEM's platforms need only one, while two are needed for others. Though there are no major technology adjustments required for the contract extensions, BorgWarner put extensive effort into the initial designs ensuring each turbo was supplying the optimal air flow to meet performance specifications.  

About BorgWarner

For more than 130 years, BorgWarner has been a transformative global product leader bringing successful mobility innovation to market. With a focus on sustainability, we're helping to build a cleaner, healthier, safer future for all. 

Forward-Looking Statements: This release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current outlook, expectations, estimates and projections. Words such as "anticipates," "believes," "continues," "could," "designed," "effect," "estimates," "evaluates," "expects," "forecasts," "goal," "guidance," "initiative," "intends," "may," "outlook," "plans," "potential," "predicts," "project," "pursue," "seek," "should ," "target," "when," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained or incorporated by reference in this release that we expect or anticipate will or may occur in the future regarding our financial position, business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading "Critical Accounting Policies and Estimates" in Item 7 of our most recently filed Annual Report on Form 10-K ("Form 10-K"), are inherently forward-looking. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company's actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.

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, 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 original equipment manufacturer ("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; future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; potential disruptions in the global economy caused by wars or other geopolitical conflicts; 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 2023 tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended benefits; 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; impacts of any future strikes involving any 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; 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.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/borgwarner-solidifies-extended-wastegate-turbo-contracts-with-major-oem-302370109.html

SOURCE BorgWarner

FAQ

What is the duration of BorgWarner's (BWA) new turbocharger contract extension?

The contract extension runs through 2028 and beyond for wastegate turbocharger programs.

Which vehicles will use BorgWarner's (BWA) wastegate turbochargers?

The turbochargers will power the OEM's midsized and large SUVs, as well as truck applications.

What are the key benefits of BWA's wastegate turbocharger technology?

The technology offers lightweighting, durability, quick boost response, powerful performance, improved fuel efficiency, and reduced emissions.

How many turbochargers are required per engine in BWA's new contract?

The number varies by platform - some engines require one turbocharger while others need two.

What makes BWA's wastegate turbochargers more efficient?

They feature electrically actuated wastegate actuators that allow more precise control of boost levels, improving fuel efficiency and reducing emissions.