Schaeffler's Electric Mobility: A Rollercoaster Ride of Profits and Woes
Electrification in Mobility Remains Robustly Progressive, According to Schaeffler - E-mobility advancement, as per Schaeffler's perspective.
Wagon-maker giant Schaeffler, headed by CEO Klaus Rosenberg, is feeling the electric vibes. In a candid chat with the German Press Agency, he declared, "Somethin's brewin'!" The corporate titan is riding high after scoring an impressive €3 billion in orders for the e-mobility section in Q1. This is a record-breaking figure, particularly since it's the first quarter following the merger with electric drive specialist Vitesco.
The Loss-Making Electric Adventure
Though the company is gearing up to meet its full-year forecast, the waters aren't entirely clear yet. The electric division is still bleeding money, as highlighted by a pre-tax, pre-interest, pre-special-items loss of €268 million in Q1. The division's revenue climbed steadily to €1.174 billion, up 7.8% since last year, but the negative vibes are evident.
Struggling with the Currents
In Q1, Schaeffler's overall sales took a 3.5% dip compared to the previous year, sliding down to €5.9 billion. The pre-tax, pre-interest, pre-special-items profit also dipped from €287 million in the last year's quarter to €276 million. Rosenfeld was candid about the unpredictable environment they're navigating.
Reducin' Dependence and Dealin' with Tariffs
Rosenberg confirmed that the acquisition of Vitesco has successfully reduced Schaeffler's reliance on China. However, the tense situation in the US is causing concern. Rosenberg stated, "We gotta bail ourselves out from tariffs, but we'll do it with tact."
Headquartered in Herzogenaurach, Schaeffler is one of the world's top 10 automotive suppliers. It boasts over 113,000 employees globally.
For the Tech-Savvy:
- INA Holding Schaeffler
- Electric Mobility
- Vitesco Technologies
- Herzogenaurach
- Rosenberg
- German Press Agency
A Deeper Dive:
The loss-making nature of Schaeffler's E-Mobility division is concerning, with the EBIT margin before special items at a negative -29.8% in Q1 2023 and an overall FY 2023 EBIT margin of -22.1%. Despite surging sales, the segment has struggled with profitability[1][4]. The losses are attributed to weaker market and volume development, as well as conservative accounting practices for R&D expenditures[2].
Moving forward, Schaeffler anticipates another tough year for the E-Mobility segment in 2025 due to ongoing challenges. However, the firm aims to boost profitability as swiftly and sustainably as possible[2]. They're focusing on integrating recent acquisitions and streamlining operations to improve performance across all divisions[2]. The company is also eyeing synergy potentials, which could positively impact the segment's future performance[2].
External factors such as tariffs announced by the U.S. government and potential countermeasures could influence the sector's dynamics and profitability. Schaeffler is monitoring these developments closely[2].
In essence, Schaeffler's electric mobility segment faces challenges but is part of broader strategic efforts to enhance profitability and capitalize on synergy opportunities.
- Schaeffler, a leading EC countries-based automotive supplier, anticipates another challenging year for its E-Mobility segment in 2025, due to ongoing difficulties.
- Despite the struggles with profitability in Schaeffler's E-Mobility division, the firm aims to boost profitability as quickly and sustainably as possible by integrating recent acquisitions and streamlining operations.
- Schaeffler's CEO, Klaus Rosenberg, confirmed that the acquisition of Vitesco has successfully reduced the company's reliance on China, but the tense situation in the US with potential tariffs remains a concern.
- Schaeffler's E-Mobility division, despite having a record-breaking €3 billion in orders in Q1, is still facing losses and is working on improving performance by focusing on synergy potentials and integrating recent acquisitions.
- The company's electric product line, Vitesco Technologies, saw a significant boost following the merger with Schaeffler, securing impressive €3 billion in orders for the e-mobility section in Q1, a record-breaking figure.
