stockrowWhat it does
BorgWarner makes components and systems used to move vehicles and manage their engines, temperatures and electricity. Its products serve combustion-engine, hybrid and electric vehicles. Customers include vehicle manufacturers, suppliers of vehicle systems and distributors selling replacement parts.
The company’s products include turbochargers, which increase the power available from an engine, and transmission and drivetrain components that help transfer power to a vehicle’s wheels. It also makes inverters, electric motors, electronic controllers and battery systems. Its thermal products help manage temperatures in propulsion systems and vehicle cabins.
Most of BorgWarner’s sales are for passenger cars and other light vehicles, but its products also go into trucks, buses, agricultural and construction equipment, and marine applications. It operates manufacturing facilities serving customers in Europe, the Americas and Asia.
BorgWarner is also developing products for data centers and other industrial uses, including turbine generators, battery energy storage systems and microgrid inverters. The company expects its energy storage system to be production-ready in 2027 and has begun quoting a microgrid inverter to a customer.
BorgWarner was founded in 1880 and is headquartered in Auburn Hills. Joseph F. Fadool is president and chief executive officer.
How it makes money
BorgWarner earns revenue primarily by manufacturing components and selling them to vehicle manufacturers. It generally sells directly under negotiated annual contracts, long-term supply agreements or other agreed terms. Customers authorize deliveries periodically based on their production schedules, and BorgWarner typically ships from its plants to their facilities. Repeat deliveries therefore depend on customers continuing to produce the vehicles for which BorgWarner supplies parts.
The company reports four segments. Turbos & Thermal Technologies makes turbochargers, emissions and thermal systems, ignition products, sensors and heaters. Drivetrain & Morse Systems supplies transmission controls and clutches, transfer cases, chain systems and other components that manage or transfer power.
PowerDrive Systems makes inverters, onboard chargers, electric motors, controllers and integrated drive modules that combine an inverter, motor and gear reducer. Battery & Charging Systems makes battery packs and battery management systems for electrified commercial and off-highway applications. BorgWarner exited its charging business, and production operations ceased during the second quarter of 2025.
For the year ended December 31, 2025, net sales were $14,316 million; in the third quarter of 2026, net sales were under $3.5 billion.
In 2025, eProducts generated approximately $2.6 billion, or 18% of total revenue. The category includes products used on electric vehicles and related products used in hybrid powertrains. Foundational products generated approximately $11.7 billion, or 82% of total revenue; these include combustion-engine products and related products also used in hybrids.
Customers expect annual price reductions, and BorgWarner seeks supplier savings, more efficient production and product design changes to help maintain margins. Its ability to pass increased material and other inflationary costs to customers is limited.
Customers and how it sells
BorgWarner sells primarily to original equipment manufacturers, or OEMs: companies that build vehicles. It also sells to certain suppliers of vehicle systems and to the aftermarket, where distributors provide replacement parts. Its sales teams work directly with customers’ purchasing and engineering employees, including during product launches.
For the year ended December 31, 2025, approximately 82% of net sales were for light-vehicle applications, approximately 10% for commercial vehicles, approximately 5% for off-highway vehicles and approximately 3% for aftermarket replacement-parts distributors.
Volkswagen accounted for 13.0% of revenue in FY2025 and Ford for 12.0%. BorgWarner’s top ten customers represented 71% of sales for the year ended December 31, 2025. No other single customer accounted for more than 10% of consolidated net sales that year.
For the year ended December 31, 2025, approximately 16% of net sales were generated in the United States and 84% outside it. BorgWarner operates facilities serving customers in Europe, the Americas and Asia. It also participates in joint ventures, including ventures making transmission components, turbochargers and inverters in Asia. Its unconsolidated joint ventures’ sales are not included in BorgWarner’s reported segment sales.
Suppliers and costs
BorgWarner uses aluminum, copper, nickel, plastic resins, steel, magnets, alloy elements and semiconductor chips in its products. Its manufacturing operations also depend on natural gas, fuel oil and electricity. The company says raw materials are available from multiple sources to support its manufacturing requirements.
Its global procurement organization works on cost reductions and supply risks. The company also uses measures such as long-term contracts, cost-sharing arrangements, design changes, dual sourcing and customer buying programs. It uses limited financial instruments to help control costs.
Cost of sales was $11,642 million for the year ended December 31, 2025. BorgWarner’s net research and development spending is primarily included in selling, general and administrative expenses; customer reimbursements are deducted from gross research and development expenditures. Net R&D expenditures were 5.0% of net sales for the year ended December 31, 2025.
Tariffs increased the cost of materials and components BorgWarner purchased. The company has also experienced inflation in its electronics business in 2026. It seeks to recover some increased costs from customers, but recovery can be incomplete or delayed.
- Revenue$14.3B
- Cost of revenue−$11.6B
- Selling, general and administrative−$1.3B
- Other operating costs−$834.0M
- Operating income$536.0M
Competitive position
BorgWarner competes worldwide with manufacturers and distributors of similar automotive products. Its major non-OEM competitors include Robert Bosch, Denso, Garrett Motion, Hitachi, Magna Powertrain, Valeo, Schaeffler Group and Contemporary Amperex Technology. It also competes with electrification startups and with some vehicle manufacturers that make competing products for themselves or others.
Competition centers on technology, engineering for particular applications, quality, price, delivery and support when a customer launches a vehicle program. Some competitors have greater resources, while some suppliers benefit from lower costs or subsidies. BorgWarner’s customers can also choose to make components internally.
BorgWarner works with OEMs to develop proprietary components and systems and operates testing facilities. It has approximately 5,000 active domestic and foreign patents and patent applications pending or under preparation, although it does not consider any single patent or related group essential to the company’s operations as a whole.
Our reading: Customer engineering relationships and launch support provide a meaningful competitive foothold, but they do not prevent customers from making components themselves or seeking other suppliers.
Our reading: BorgWarner’s product development and intellectual property support its position, but the protection is limited by competitors’ ability to develop similar technologies or design around patents.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Robert Bosch GmbH | Automotive components and systems | High |
| Denso Corporation | Automotive components and systems | High |
| Garrett Motion | Automotive components and systems | High |
| Hitachi, Ltd. | Automotive components and systems | High |
| Magna Powertrain | Automotive components and systems | High |
| Valeo | Automotive components and systems | High |
| Schaeffler Group | Automotive components and systems | High |
| Contemporary Amperex Technology Co., Limited | Automotive components and systems | High |
Growth opportunities
BorgWarner’s strategy is to grow its portfolio across combustion, hybrid and electric vehicles through internal investment and technology-focused acquisitions. The company expects adoption of electrified-vehicle products and increasingly stringent emissions standards to support long-term demand for products that improve vehicle efficiency.
For the third quarter of 2026, BorgWarner reported that light-vehicle eProduct sales were $630 million, a 33% increase from a year earlier, primarily due to growth in Europe. During the quarter, it announced awards for engine control modules, turbochargers, electric motors in China and an inverter for future battery-electric vehicles.
The company is also developing products for data centers and other industrial customers. It has completed construction of a turbine-generator final assembly plant in North Carolina and expects production trials by year-end. Its go-to-market partner, Endeavour, serves customers directly. BorgWarner expects $300 million of turbine generator revenue in 2027.
For battery energy storage, BorgWarner is engaging customers using different cell types and expects to be production-ready in 2027. It has shipped microgrid inverter samples to seven customers and begun an initial quote for a customer. The company is also developing a power supply unit intended for use inside data centers.
For 2026, BorgWarner expects a decline in battery sales because of a lack of North American incentives and weaker European demand. It projects total sales of $14.0 billion to $14.2 billion for the year.
- $11.8BFY2021
- $12.6BFY2022
- $14.2BFY2023
- $14.1BFY2024
- $14.3BFY2025
- $14.0BFY2026 guidance
Structural risks
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Vehicle production: Automotive and truck production is cyclical and sensitive to economic conditions, credit, interest rates and consumer preferences. A reduction in customers’ production would reduce BorgWarner’s sales to vehicle manufacturers.
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Technology transition: BorgWarner may not recover expected returns on electric-product investments if adoption is slower than it expects. New technologies could also make existing products obsolete, and investments with the wrong customers or in the wrong markets may not earn expected returns.
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Pricing and input costs: Customers expect annual price reductions, while BorgWarner faces fluctuating commodity, energy and labor costs. Its recovery of higher costs from customers is often incomplete or delayed, which can affect margins.
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Competition and insourcing: Independent suppliers and some customers make competing products. Customers could choose to manufacture components themselves, while competitors may adapt more quickly to technology or customer requirements.
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Trade and supply chains: Tariffs have increased costs for purchased materials and components. Changes in trade policy or retaliatory measures could disrupt supply chains, raise costs or reduce demand.
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Acquisitions and joint ventures: Acquired businesses may not deliver expected benefits, and integration can be costly or disruptive. Joint venture partners may have different objectives or fail to meet contractual obligations.
Bottom line
Our reading
BorgWarner is a global vehicle-parts supplier whose business rests on customer production programs and products used across combustion, hybrid and electric vehicles. [item1]
Its engineering relationships and portfolio support opportunities in both vehicle electrification and industrial power, but pricing pressure, production cycles and the pace of technology adoption affect the returns it can earn. [item1, item1a, call_prepared]
The industrial expansion is still moving through customer engagement, certification and production preparation. [call_prepared]