Electromobility's Progression Remains Steady According to Schaeffler - E-mobility progressing: Schaeffler update
Article:
Schaeffler's E-Mobility Venture Drives Record Orders, Yet Sustaining Profitability Remains a Challenge
Hey there! Let's dive into the world of Schaeffler, a powerhouse player in the automotive industry, as it navigates the surge in e-mobilityWhile there's no doubt the e-mobility segment is on the rise, it seems Schaeffler's foray into this electric realm hasn't escapes the red yet. Klaus Rosenberg, CEO of Schaeffler, confirms that the first quarter of 2025 has brought a wave of orders worth three billion euros in this electrifying sector. But, it's important to note this milestone comes post the merger with electric drive specialist Vitesco.
Despite the impressive figure, Schaeffler is still grappling with losses here. The company projects staying on target for its full-year forecast, however, the forecast paints a mixed picture with losses lingering. In Q1 2025, the e-mobility business grew a robust 7.8% to hit 1.174 billion euros, but with a heavy pre-tax loss of 268 million euros. Schaeffler's overall Q1 sales plummeted by 3.5% year-on-year to 5.9 billion euros. Pre-tax earnings before interest and special items slipped from 287 million euros in the previous year's quarter to just 276 million euros. Rosenberg isn't mincing words when he calls the environment surrounding Schaeffler "risky and uncertain".
The acquisition of Vitesco has indeed reduced Schaeffler's dependence on the mighty Chinese market, according to Rosenberg. The unpredictable landscape in the USA remains a cause for concern, though. So, Schaeffler plans to weather the tariff storm by keeping a tight rein on its expenditures, Rosenberg reassures us. Schaeffler ranks among the ten largest automotive suppliers globally, employing over 113,000 folks worldwide.
- Schaeffler
- E-Mobility
- Vitesco Technologies
- Klaus Rosenberg
- German Press Agency
Behind the Scenes
It's worth noting that while Schaeffler is reaping impressive gains in terms of e-mobility orders and revenue, achieving over 1.1 billion euros in Q1 2025, the E-Mobility division faces some challenges in terms of profitability. Factors contributing to the lack of profitability include:
- High production costs: Though Schaeffler's e-mobility segment is growing, it still might not have reached the scale required to offset its spiraling development and manufacturing costs.
- Regional challenges: The overall revenue was negatively impacted by challenges in various regions, including Europe, the Americas, and Greater China, which may have indirect effects on the e-mobility segment due to reduced production volumes or supply chain issues.
- Investment focus: Schaeffler is currently in a heavy investment phase, pumping massive amounts into expanding its e-mobility capabilities, which likely involves high upfront costs that aren't immediately recovered through sales.
- Profitability in other divisions: Although the e-mobility segment may not be profitable, other divisions like Powertrain & Chassis, Vehicle Lifetime Solutions, and Bearings & Industrial Solutions have reported double-digit EBIT margins before special items. This suggests that profitability challenges are more acute in e-mobility compared to other sectors within the Schaeffler business.
- Global market uncertainties: Despite strong growth in orders, the broader automotive market grapples with uncertainties, like technological transitions and economic fluctuations. These broader challenges can potentially dent profitability in specific segments, such as e-mobility.
In essence, Schaeffler's ongoing losses in e-mobility reflect the difficulties of scaling cutting-edge technologies while navigating volatile global market conditions. But, with persistent efforts and smart investments, the industry titan is surely aiming to conquer the e-mobility segment and make it profitable in the long run!
- Schaeffler, despite achieving record orders worth three billion euros in the electrifying e-mobility sector, faces challenges in maintaining profitability, as shown by the heavy pre-tax loss of 268 million euros in Q1 2025.
- Vitesco Technologies, an electric drive specialist that Schaeffler merged with, has helped Schaeffler reduce its dependence on the Chinese market, but the unpredictable landscape in the USA remains a concern.
- High production costs, regional challenges, heavy investment phase, profitability in other divisions, and global market uncertainties are contributing factors to Schaeffler's ongoing losses in the e-mobility segment. However, the company is determined to resolve these issues and aims to conquer the e-mobility market in the long run.
