managing propulsion strategies for global regulatory complexity · 2017-07-21 · july 19, 2017...

July 19, 2017

Managing Propulsion Strategies for Global Regulatory Complexity

Erika Nielsen – Director Global Government Affairs, BorgWarner, Inc.

© BorgWarner Inc. 2

Text in overlaying boxes, black, between 14pt and 18pt

Our Vision:

A clean, energy-efficient world


BorgWarner at a glance

27,000employees

2016 Sales

$9.07 Billion

consolidated

Financial and Employee information as of December 31, 2016. Locations as of November 21, 2016

62 Locations

17 Countries


Vehicle Mobility Trends

autonomousdriving

shared cars and rideshare

connected cars

efficiency/CO2emissions


Core Purpose Remains Unchanged

POINT A POINT B

THERE WILL ALWAYS BE A NEED FOR APROPULSION SYSTEM


Vehicle Propulsion System Categories


Production Mix Continues to Evolve

2023 IHS UNITS*2016 IHS UNITS*

93M

90M

3M

0.5M

83M

107M

21M3.4M

ElectricHybridCombustion

*Source market data: IHS Light Vehicle Forecast (May 2017). All values are

approximate

11M

89M

2.2M 102M

2020 IHS UNITS*


Combustion – Strategy1. Efficient combustion propulsion systems will play a key role in meeting government regulations

2. Continued pressure for innovation Making incremental improvements, $/% fuel economy

3. Industry penetration rates continue to grow

Technology Penetration % - Combustion Only (includes S/S) - Gas & Diesel

2016 2026

Turbochargers 42% 55%

Exhaust Gas Recirculation 29% 47%

Variable Cam Timing 54% 70%

Dual Clutch Transmission 8% 10%

Stop/Start 35% 65%


Hybrid – Strategy

2. Hybrids are additive to our business BorgWarner expects content on 42% of the market by 2023

Our portfolio includes a wide variety of products for all hybrid architectures

Mild hybrids will dominate because they offer 70 – 80% of the benefit of a full hybrid at 20% of the cost

1. Hybrids use highly efficient internal combustion engines

Technology Penetration % - Hybrid Only - Gas & Diesel

2016 2026

Turbochargers 18% 56%

Exhaust Gas Recirculation 12% 41%

Variable Cam Timing 52% 68%

eBooster® electrically driven compressor

Belt Alternator Starter

P2 Motor/Clutch Module

Electric All-Wheel Drive


Electric – Strategy

We supply products in four of five main electric propulsion areas: Electric Motor

Transmission

Power Electronics

Thermal Management

Battery


Balanced Across Propulsion SystemsEstimated 2023 Average Content Per Vehicle

Note: Participation Rate

$285

$215

53% 42% 29%

$225

CO

MB

US

TIO

N

HY

BR

ID

EL

EC

TR

IC


Select Global Customer Awards

Americas

Europe

Asia Stop/Start accumulator Asia (2) (2019, 2019)

EGR module EU (2017), Asia (2) (2018, 2019)

Variable cam timing Americas (3) (2017, 2018, 2019)

48V iBAS for P0 Asia (2017)

eBooster® EU (2017, 2017)

Exhaust heat recovery system N. America (2019)

Electric Drive ModuleAsia (2017)

Transmission friction plates EU (2019)

Cabin air heater N. America (2017, 2019)


Focus of BorgWarner Government Affairs

Legislation and regulation impacting our

business

Legislation and regulation impacting our

products

Economic Development Public partnerships


Our Approach to Government Affairs

Encourage long-term, predictability and stability in direction of future standards

Regulations can help drive technology innovation and jobs

Continue success of One National Program in U.S. based on factual data and real world driving performance

Stay ahead of trends and instill collaborative culture in the industry Suppliers and supplier trade associations Automakers and their trade associations Government officials Government Agencies – DG CLIMA, DG GROW, EPA,

NHTSA, DOT, CARB, CATARC, MIIT, MEP, Non-Governmental Organizations (NGO’s)

Communication is key Respond quickly to requests for information from the industry


Developing Government Affairs Strategies

Advanced Engineering

Government Affairs

Corporate Functional

GroupsBorgWarner Businesses

Legal/Compliance Executives

(CEO, CFO)


Global Emissions & Fuel Economy Standards

ExampleGovernment Affairs Strategy forU.S. Technical Assessment Report/Midterm Evaluation


Off-Cycle Credits/ Eco-Innovations

FLEXIBILITY TO FOSTERINNOVATION


Rate of Technology Introduction Is Key

BALANCETECHNOLOGYVS. COST


We Must Always Satisfy All Three

Consumer Government Regulations

Profitable Business


Summary Vehicle mobility trends are good for our business

BorgWarner is well positioned as the propulsion market evolves regardless of the mix of Combustion, Hybrid or Electric

Highly engineered propulsion systems will continue to be required for future CO2 compliance - We are still making technology innovations and incremental improvements!

Significant amount of electrification will be needed to meet 2025 standards.

Meeting standards with cost effective propulsion systems may be difficult in 2025 without significant flexibilities for automakers (e.g. off- cycle credits).

Focusing on the proper rate of improvements that result in high-volume technology solutions on the road quickly is good for consumers, the industry, governments and most importantly the environment.


Thank you!

managing propulsion strategies for global regulatory complexity · 2017-07-21 · july 19, 2017...

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