The CEO of auto supplier BorgWarner told CNBC on Friday that the company expects nearly 50% of its revenue to be tied to electric vehicles in the next decade.
Currently, less than 3% of the Michigan-based company’s sales are related to electric vehicles.
“Our assumption is that 30% of the vehicle will be battery electric in 2030. It is already a bullish assumption. Our assumption is that we will be at 45% of our revenue,” CEO Frederic Lissalde said in an interview with Jim. Cramer in “Mad Money”.
BorgWarner’s drive to grow its electric vehicle business is in line with the moves made in the automotive industry. A range of electric vehicle startups have hit 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 exclusively offer electric vehicles by 2035, the company announced earlier this year, and to become carbon neutral by 2040. In February, the city’s rival Ford revealed intentions to nearly double its investment in electric vehicles by 2025.
BorgWarner manufactures automatic transmissions and turbochargers, among other products. Both Ford and GM are customers, as are Volkswagen and Stellantis, which makes Jeep and Dodge vehicles.
BorgWarner is investing heavily to grow its electric vehicle business and plans to spend approximately $ 8 billion on the effort between now and 2025, Lissalde told Cramer, “We are self-financing this pivot.”
“This is moving towards electrification, we believe in BorgWarner that it is really deep. It goes at different speeds and different region, but it is deep. In both light vehicles and commercial vehicles,” he added.
BorgWarner shares rose 4.7% on Friday to close at $ 45.74 each. The stock is up more than 18% so far this year and about 83% in the last 12 months.