After the supervisory board of Continental AG approved the spin-off of the powertrain division Vitesco Technologies a few days ago, the latter has now presented its current strategy. In the medium term, Vitesco wants to generate over 30 per cent of its sales in its core business with electrification.
In 2020, Vitesco was able to significantly increase sales of such components and systems compared to previous years. The order book in the electrification sector had a total value of over 13 billion euros at the end of 2020. Last year’s turnover was eight billion euros.
“In 2019, we already set our course, and are fully committed to a path, toward e-mobility. We used 2020 to drive the transformation forward, fast and focused. Now we are ready for the biggest step in our company’s history,” says Vitesco CEO Andreas Wolf with regard to the IPO. However, the Annual General Meeting at the end of April still has to approve the resolution of Continental’s Supervisory Board.
Currently, the company says it is benefiting from its broad portfolio, which ranges from mild hybrids to various stages of electrification to battery-electric cars. “The market that we are addressing with our e-mobility solutions is expected to grow very dynamically at rates of around 30 per cent per year between 2020 and 2025,” Wolf said.
By early 2021, more than 150,000 third-generation electric axle drives had been delivered to global customers. In addition, Vitesco Technologies recently won a major order from Hyundai Motor Group for 800-volt SiC power electronics. Other important large orders include the traction control unit for Volkswagen’s MEB, and PSA’s 100 kW electric drive, which is offered in a wide range of models, is also coming from Vitesco. The company expects the value contribution per vehicle for battery-electric cars to increase to five times the value for internal combustion cars in 2018 by 2025.
Vitesco Technologies is divided into three business units. The Electrification Technology division develops and produces electric motors, integrated axle drives, power electronics, battery management systems and 48-volt systems. The Electronic Controls division’s portfolio includes integrated electronic architectures and software, control units for electric, hybrid and combustion drives, and integrated high-voltage boxes. Sensing & Actuation offers solutions for precise measurement and control, e.g. in the field of thermal and energy management.
While the Electronic Controls and Sensing & Actuation divisions are already profitable, the Electrification Technology division came to an adjusted EBIT margin of -1.1 per cent “due to high start-up costs in connection with the dynamic business development”. In the medium term, the division should reach the profit zone “at the level of adjusted EBIT”.
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