The CEO of auto supplier BorgWarner told CNBC on Friday that the company expects to have almost 50% of its revenues tied to electric vehicles in the next decade.
Currently, less than 3% of the Michigan-based company’s sales are related to EVs.
“Our assumption is that 30% of the vehicle will be battery powered by 2030. It is already a kind of optimistic assumption. Our assumption is that we will have 45% of our revenue,” said CEO Frederic Lissalde in an interview with Jim Cramer in “Mad Money “.
BorgWarner’s drive to expand its EV business is in line with moves across the automotive industry. A number of electric vehicle start-ups have hit the public markets in recent months, and established titans like General Motors and Ford have announced aggressive efforts to move away from internal combustion engines.
GM plans to offer EVs exclusively by 2035, the company announced earlier this year, and to become carbon neutral by 2040. In February, rival Ford revealed its intention to almost double its investment in EVs by 2025.
BorgWarner manufactures automatic transmissions and turbochargers, among other products. Both Ford and GM are customers, as are Volkswagen and Stellantis, which make Jeep and Dodge vehicles.
BorgWarner is investing heavily to expand its EV business and plans to spend around $ 8 billion in the effort between now and 2025, Lissalde told Cramer: “We are self-financing this pivot.”
“This moves towards electrification, we think of BorgWarner which is really deep. It goes at different speeds and in different regions, but it is deep. Both in light vehicles and in commercial vehicles,” he added.
BorgWarner’s shares rose 4.7% on Friday, closing at $ 45.74 each. The stock is over 18% in the year to date and around 83% in the last 12 months.