ZF terminates several e-mobility projects prematurely

As part of the restructuring of its Electrified Drivetrain Technology division, ZF has agreed with various customers to terminate several projects prematurely, as they are not achieving the expected profitability due to the slower-than-anticipated ramp-up of e-mobility.

The automotive supplier announced its decision in conjunction with the release of its preliminary financial results for 2025. ZF did not specify which projects are affected. “The decision will result in a one-time charge and a reported loss for 2025,” the statement said.

However, the operational performance of the struggling Electrified Powertrain Technologies division has ‘improved significantly year-over-year and remains on track with the restructuring plan, which continues into 2026.’

In autumn 2025, the company’s top management reached an agreement with employees after months of negotiations on a ‘restructuring alliance.’ This agreement ended a previously reported sale of the division and ruled out site closures. Nevertheless, significant cuts were agreed, resulting in the loss of 7,600 jobs in the powertrain division alone. Despite its name, the Electrified Powertrain Technologies division is not solely responsible for electric drives but also produces conventional transmissions and hybrid systems.

The division was severely impacted when the electromobility market grew more slowly than anticipated, as the previous management had focused heavily on a rapid ramp-up. Additionally, contracts were secured at prices that were too low during customer negotiations, leading to losses.

“The improved operating performance and faster debt reduction are encouraging. Our transformation measures are working,” said ZF CEO Mathias Miedreich. “This is not a reason for complacency but an important milestone and motivation to keep pushing on our path forward.”

According to the preliminary figures, the group as a whole performed better than expected. ZF states that its adjusted free cash flow will exceed one billion euros, while the adjusted EBIT margin will be significantly above 4.0 per cent. The company had anticipated an adjusted EBIT margin in the range of 3.0 to 4.0 per cent, with adjusted free cash flow expected to exceed 500 million euros. “Strong cash generation will allow ZF to reduce financial debt by year-end 2025 – earlier than planned,” the statement reads. The final annual figures will be presented at the financial results press conference on 19 March.

“The one-time charge in electric mobility will lead to a reported loss for 2025. But it frees us from legacy burdens and creates room for sustainable profitability in the coming years,” added ZF CFO Michael Frick.

zf.com