Powertrain Strategies for the 21st Century: Revolution and Evolution John Shutty Chief Engineer July 22 nd, 2015
Agenda BorgWarner Company Background Forecasts and Technology Trends Advanced Components for Fuel Economy Outlook Copyright 2015 BorgWarner Inc. 2
BorgWarner at a Glance 2014 Sales: $8.3 Billion ($9B unconsolidated) Employees: 22,000 Operations: Products: Market Drivers: 58 Locations 19 Countries Engine, Transmission and Driveline systems Fuel Economy, Emissions, Performance Copyright 2015 BorgWarner Inc. 3
Customer and Geographic Diversity 2015 Sales Outlook* Hyundai/Kia 6% VW/Audi 11% Daimler 6% Ford 4% Renault 3% BMW 3% Toyota 4% Nissan 1% Honda 1% China 13% Other 5% Fiat 2% PSA 1% GM 1% Commercial 2% Vehicles Ford 8% Chrysler 5% GM 3% Asian OEMs 2% Other 11% *NSK-Warner included ** NSK-Warner excluded Americas ~27%* Asia ~30%* Europe ~43%* 29%** 26%** 45%** Commercial 4% Vehicles Other 5% Copyright 2015 BorgWarner Inc. 4
Where Advanced Engineering fits James Verrier President and Chief Executive Officer Julie Watts Senior Executive Assistant Turbo Systems Thermal Systems TorqTransfer Systems Ron Hundzinski Vice President, Chief Financial Officer Scott Gallett Vice President Marketing & Public Relations John Gasparovic Vice President General Counsel & Secretary Emissions Systems Transmission Systems Chris Thomas Vice President Chief Technology Officer Kim Jenett Vice President Human Resources Morse TEC Advanced Engineering Tom Tan President BorgWarner China Copyright 2015 BorgWarner Inc. 5
Corporate Advanced Engineering - Functions Core Functions Activities which support the goals of BUs and BW Corporate, but are not tied to a specific product or technology offering. New Product Development Development of new market leading products/technologies that do not currently fit into an existing BU. BU Support Demonstrating advanced BU technologies which require system integration for maximum benefit. Internal resource for sim. & controls work. System Engineering Projects Investigating new operating regimes and system configurations to identify product and technology trends which cross BU boundaries. Copyright 2015 BorgWarner Inc. 6
Diversification: Many solutions will be required for the future % of 2014 Vehicles meeting future regulation Strategy used to mitigate risk A way to deal with uncertainty Risk & Uncertainty Source: 2014 EPA Trends Report Copyright 2015 BorgWarner Inc. 7
Hybrid and Electric Vehicle Segments INCREASING ELECTRIFICATION Internal Combustion Engine (ICE) + Electrification Electric Motor + ICE Electric Motor Only ENHANCED ICE HYBRID ELECTRIC HEV ELECTRIC DRIVE Stop/Start Mild HEV Parallel Full HEV Parallel/Series Range Extended Electric Vehicle Battery Electric Vehicle BMW 328i Buick Regal eassist Toyota Prius GM Chevy Volt Nissan Leaf % of Total LV 2020 ~47% 2025 ~50% % of Total LV 2020 ~2% 2025 ~9% % of Total LV 2020 ~5% 2025 ~6% % of Total LV 2020 ~1% 2025 ~2% Source: IHS Automotive, BorgWarner forecasts (January 2015) Copyright 2015 BorgWarner Inc. 8
I.C. Engines will continue through 2025 What technology will be in the IC Engine of the future? Source: BorgWarner forecasts, IHS Automotive (January 2015) Copyright 2015 BorgWarner Inc. 9
Powertrain Trends Electrification Stop/Start 48 Volts Thermal Management Downsizing and boosting Downspeeding Light-weighting Cost Reduction Fuel Diversification Emissions Reduction Copyright 2015 BorgWarner Inc. 10
Fuel Economy Driving Component Growth LV Transmissions 89.6 103.8 LV Turbocharged Systems 89.6 103.8 6.4 32.4 2.0 9.4 3.7 2015E 89.6 10.8 32.8 13.0 2020E LV EGR Systems 103.8 Manual Transmissions DCT (11%)* Step ATs (1%)* CVT (7%)* AMTs and EVTs (13%)* Fuel Economy Non-Turbocharged (13%)* Gasoline (3%)*Diesel 15.6 19.3 22.1 2015E LV VCT Systems 89.6 28.5 2020E 103.8 Non-EGR Non-VCT 3.6 15.9 17.6 21.2 Gasoline (35%)* Diesel (4%)* (6%)* VCT Systems 53.5 72.4 2015E 2020E Global light vehicle industry volumes; units in millions (January 2015) * CAGRs are shown in parentheses 2015E 2020E Copyright 2015 BorgWarner Inc. 11 11
2025 / 2030 Technology Projections Supercharging Turbocharging 25.0 29.9 Multiturbo 4.3 2.5 Boosting ebooster eturbo 2.3 0.6 0.3 0.0 0.0 0.0 Turbo- & Supercharging 0.0 0.0 units 2030 units 2025 0 M 5 M 10 M 15 M 20 M 25 M 30 M 35 M 40 M Copyright 2015 BorgWarner Inc. Source: BorgWarner forecasts, Schlegel & Partners 12
2025 / 2030 Technology Projections Exhaust Recirculation Cooled EGR (Gasoline) Dual Loop (Diesel) HP-EGR (Diesel) Dedicated EGR (Gasoline) 1.1 0.3 5.8 4.7 4.3 5.1 8.5 12.3 units 2030 units 2025 0 M 5 M 10 M 15 M 20 M 25 M 30 M 35 M 40 M Copyright 2015 BorgWarner Inc. Source: BorgWarner forecasts, Schlegel & Partners 13
Expanding Component Set for Fuel Economy VCT Variable valvetrain Timing chain Timing system ephaser Fans/fan drive EGR cooler Exhaust heat recovery system Solenoid Control module Eco-Launch TM solenoid valve Friction Clutch module Wet clutch for manual transmissions Transfer case AWD coupling FXD Permanently Engaged Starter Turbocharger R2S turbocharger ebooster turbocharger Diesel cold start Gasoline ignition coils Cabin heater for EVs EcoFlash high frequency ignition Copyright 2015 BorgWarner Inc. 14
What will the Future Hold for the I.C. Engine? 1. There is an exciting future for the IC Engine 2. All eggs wont be in one basket, a diverse range of strategies will be used 3. Joint effort from OEMs, Suppliers, and Governments working together Copyright 2015 BorgWarner Inc. 15
Thank You For Your Attention Our Vision A Clean, Energy-Efficient World Our Mission Deliver Innovative Powertrain Solutions that Improve Fuel Economy, Emissions & Performance Fuel Economy Emissions Performance Copyright 2015 BorgWarner Inc. 16