Schaeffler Revs Up in E-Mobility: Bullish Signs Ahead
Electronic mobility remains a persistent progression, according to Schaeffler. - Electric mobility taking the road ahead, as per Schaeffler's announcement
No doubt about it, Schaeffler's going hard on the electric highway! Klaus Rosenberg, CEO of Schaeffler, eyeballed the speedometer and declared there's definite hype brewing in the electric mobility (E-Mobility) scene. E-Mobility sales surged, hitting a whopping three billion euros in the initial quarter - all thanks to a quadruple alliance with electric drive specialist Vitesco. That's a record-breaker, first-quarter score after the Vitesco merger.
E-Mobility: profiting to perdition, or just a temporary glitch?
Banking on Schaeffler's foreseen annual projections, the E-Mobility segment is still expected to end up red, with losses steering the steering wheel. In the very first lap of 2025, the electric business went up by 7.8% to a colossal 1.174 billion euros, yielding a pre-tax, pre-interest, and pre-special items burden of 268 million euros. That's a steep climb, but nothing Schaeffler can't handle.
Schaeffler's overall first-quarter takings descended by 3.5% year-on-year to a respectable 5.9 billion euros. The pre-tax, pre-interest, and pre-special items profit slipped from 287 million euros in the previous year's quarter to a more modest 276 million euros. As Rosenfeld put it, the environment's a rollercoaster, reckless and perilous!
Lighter China Shackles
The marriage with Vitesco buoyed Schaeffler, reducing the yoke of dependency on the Chinese market substantially. The convoy in the USA continues to cause anxiety, though. "We'll fashion a cushion for those tariffs," Rosenfeld said, sizing up the challenge forthrightly.
An Auto Titan Among Giants
Schaeffler reigns among the world's ten longest, most powerful automotive suppliers. This heavyweight behemoth employs a staggering 113,000-strong workforce worldwide.
- Shaeffler Group
- Electric Mobility (E-Mobility)
- Vitesco Technologies
- Herzogenaurach
- Rosenfeld
- Deutsche Presse-Agentur
Reeling in the E-Mobility Reality:
Even while witnessing robust growth driven by flagships like the 4th generation e-axle for Hyundai Motor Group, Schaeffler's E-Mobility segment grapples with a thorny issue - profitability. To outline the financial landscape and profitability struggles:
Financial Forecast
- Sales Soar: Q1 2025 witnessed a remarkable 9.6% yoy sales boom in the E-Mobility segment, clocking EUR 1,174 million[1].
- Sales Prediction: Schaeffler projects the E-Mobility division to rake in sales between EUR 5.0 billion and EUR 5.5 billion in 2025[1].
Profitability Pinch Points
*E-Mobility division's anticipated negative EBIT margin: -17% to -14% for 2025[1] and -22.9% in Q1 2025[1] - Explanations for this pinch include a weak market and volume development, as well as conservative accounting principles concerning R&D expenditures[1].
Aiming High: Despite these financial snags, Schaeffler's charting a course to optimize E-Mobility profitability, targeting sustainable profitability as soon as possible[1].
- The Schaeffler Group, a prominent automotive supplier, is making significant strides in electric mobility (E-Mobility) with Vitesco Technologies, as evidenced by their Q1 2025 sales of 1.174 billion euros, demonstrating a healthy 9.6% year-on-year growth.
- Despite this growth, the E-Mobility division continues to struggle with profitability, anticipating a negative EBIT margin of -17% to -14% for 2025, due to factors like a weak market, conservative accounting principles, and volume development.
- Schaeffler's CEO, Klaus Rosenberg, acknowledges the challenges ahead, citing the highly volatile environment and the prospect of tariffs in the USA as concerns.
- However, the alliance with Vitesco has helped decrease Schaeffler's dependency on the Chinese market, offering some relief.
- Schaeffler, with its vast workforce of 113,000 employees worldwide, ranks among the top ten global automotive suppliers.
- The German automotive industry is investing heavily in renewable energy and electronic mobility, offering potential opportunities for businesses and real-estate development in this sector.
- Tariffs, transportation, and the automotive industry are all factors that will influence Schaeffler's future financial performance as they navigate the challenging landscape of electric mobility.
