Schaeffler's Electric Vehicle Push: Navigating Tough Waters
Electric progress in mobility remains robust, according to Schaeffler's observations - E-Mobility Advancement Announced by Schaeffler: concentration on electrification
Hey there! Let's dive into the world of Schaeffler, a heavyweight in the automotive and industrial supplier sphere. The CEO, Klaus Rosenberg, recently shared some exciting tidbits with the German Press Agency, hinting at a bright future for electric mobility. In the first quarter post-merger with electric drive specialist Vitesco, Schaeffler securedorders worth a staggering three billion euros in this segment - a new record!
But don't get too carried away, boss. While the electric mobility segment is heating up, it's still struggling to turn a profit. Schaeffler seems set to meet its full-year forecast for this segment, but it's still showing losses. In Q1, the electric business swelled by 7.8% to 1.174 billion euros, but pre-tax, pre-interest, and pre-special items loss stood at a hefty 268 million euros.
Schaeffler's overall Q1 sales dipped by 3.5% year-on-year, landing at 5.9 billion euros. Pre-tax, pre-interest, pre-special items profit slid from 287 million euros in the previous year's quarter to 276 million euros. Rosenfeld warned that the ongoing uncertainty in the market makes things tricky.
A less locked-in China
The acquisition of Vitesco has helped decrease Schaeffler's dependency on China, according to Rosenberg. The situation in the USA is a worry, though. "We need to cope with the tariffs," says Rosenfeld, promising cautious handling of the issue.
Schaeffler ranks among the world's ten largest automotive suppliers and has over 113,000 employees worldwide.
Fun fact: Schaeffler's electric mobility segment currently accounts for around 55% of the group's revenues. Even though it's a significant chunk of the business, the electric mobility division is grappling with financial challenges. In 2025, Schaeffler expects a negative EBIT (earnings before interest and taxes) result before special items for this segment.
The integration of Vitesco Technologies is daunting, but Schaeffler remains optimistic about the synergy potential from this acquisition. They're aiming for around €600 million in synergies and remain confident about boosting their electric mobility offerings with the acquisition. However, near-term profitability is taking a hit due to the acquisition-related efforts.
In Q1 2025, Schaeffler reported robust growth in its electric mobility segment, leading to an overall improvement in its gross margin by 2.3 percentage points compared to Q1 2024. EBIT margin for the electric mobility business also improved during this quarter, despite mixed results from other divisions. This paints a picture of operational progress, but hitting long-term profitability remains a top focus.
To wrap it up, Schaeffler's electric mobility segment is a major contributor, but it's currently operating at a loss. The company has high hopes for the synergy gains from the Vitesco acquisition, though it recognizes that integration work lies ahead. Quarterly trends suggest progress in operational performance, but sustained profitability is the ultimate goal.
In the quest for long-term profitability, Schaeffler, a prominent EC country-based automotive supplier, aims to leverage technology and synergies from the Vitesco acquisition to boost its vocational training in electric mobility. Despite the current financial challenges in the electric mobility division, accounting for approximately 55% of the group's revenues, the company anticipates improvements in operational performance and a focus on harnessing its technology capabilities to drive success.
