BorgWarner Inc. (BWA)

BorgWarner reported second-quarter 2026 net sales of $3,648 million on 5 August, about 0.3 percent more than a year earlier 3. Net earnings were $277 million, against $224 million in the second quarter of 2025 3.

The company said stronger foreign currencies offset lower market production volumes and lower battery segment sales 3. Without a battery sales decline of about $60 million, it said, organic sales were up modestly 3.

It raised its 2026 adjusted earnings per share guidance to a range of $5.05 to $5.30 and added $1 billion to its share repurchase authorization 3. It also said it plans to raise 2026 research spending to speed products for data center and industrial markets 3.

The open question is how car production holds up, because the company expects its weighted light vehicle markets to be down 3 percent to about flat in 2026 3.

BorgWarner is a Delaware company incorporated in 1987 1, and its own release says it has been a product leader for more than 130 years 3.

It makes parts for engines, transmissions and electric drives, and sells them mostly to carmakers under negotiated annual contracts or long-term supply agreements 1. Its fortunes therefore follow how many vehicles carmakers build 1.

The company acquired Delphi Technologies in 2020 1. On 3 July 2023 it spun off its Fuel Systems and Aftermarket segments as a separate company, PHINIA, by giving PHINIA shares to its own holders 1.

Revenue, which the company calls net sales, was $14,198 million in 2023, $14,086 million in 2024 and $14,316 million in 2025 1.

The 2025 rise of $230 million came mostly from stronger foreign currencies, about $154 million, and about $80 million of customer recoveries for tariffs 1.

In February 2025 it decided to exit its charging business, and production stopped in the second quarter of 2025 1. The exit cut sales by about $56 million that year 1.

Profit fell as the company wrote down businesses it had bought: net earnings attributable to BorgWarner were $338 million in 2024 and $277 million in 2025 1.

Goodwill impairments, the write-down of what was paid for past purchases above their book value, were $577 million in 2024 and $423 million in 2025 at its electric drive and battery segments 1.

In 2023 it announced a $130 million to $150 million plan to cut structural cost in its combustion-engine businesses 1. In June 2024 it announced a $75 million plan for PowerDrive Systems 1.

On 19 September 2024 the company sued PHINIA over about $120 million of value added tax refunds 1. The two settled on 15 October 2025, with PHINIA agreeing to pay $78 million 1.

Turbos and thermal

Turbos & Thermal Technologies had 2025 sales of $5,772 million, 40.3 percent of the total, down from $5,887 million in 2024 1. It makes turbochargers, which give an engine more power for its size, plus emissions and thermal systems 1.

Turbochargers for light vehicles made up about 21 percent of company net sales in 2025 1.

Drivetrain and Morse

Drivetrain & Morse Systems had 2025 sales of $5,654 million, 39.5 percent of the total, up from $5,577 million 1. It makes transmission clutches, chains, four-wheel-drive transfer cases and variable cam phasing products that time engine valves 1.

PowerDrive Systems

PowerDrive Systems had 2025 sales of $2,347 million, 16.4 percent of the total, up from $1,937 million 1. It makes inverters, onboard chargers, electric motors and integrated drive modules for electric and hybrid vehicles 1.

Battery systems

Battery & Charging Systems had 2025 sales of $590 million, 4.1 percent of the total, down from $729 million 1. It makes lithium-ion battery packs for buses, trucks and off-highway machines 1.

After the charging exit the segment was renamed Battery Energy Systems in the first quarter of 2026 2. Its second-quarter 2026 sales fell $59 million, or 37 percent 2.

Customers and rivals

About 82 percent of 2025 sales were for light vehicles 1. Volkswagen was 13 percent of sales and Ford 12 percent in 2025, and the top ten customers were 71 percent 1.

The company names Robert Bosch, Denso, Garrett Motion, Hitachi, Magna Powertrain, Valeo, Schaeffler and Contemporary Amperex Technology as its major non-carmaker competitors 1. It says many are larger and have greater resources 1.

Plants and people

At the end of 2025 it had 81 manufacturing, assembly and technical locations, with its headquarters in leased space in Auburn Hills, Michigan 1. Its workforce was 37,500, with 14,800 in Europe 1.

Joseph Fadool has been president and chief executive since 2025, and Craig Aaron chief financial officer since 2024 1. Alexis Michas is the non-executive chairman of the board 4.

On 31 July 2026 the board added Rajesh Kalathur, a retired president of John Deere Financial and chief information officer of Deere & Company 4.

Current problems

Tariffs cut both ways in 2025: they added about $108 million to cost of sales, while customer recoveries added about $80 million to sales 1.

The company expects its battery segment sales to fall about $250 million in 2026 3. The 2023 PHINIA spin-off could still fail to deliver its intended tax benefits, the company warns 3.

The umbrella, in words

The company owns the BorgWarner trade name and numerous trademarks, and sells under that single brand 1. It also says it holds interests in nine joint ventures that are less than wholly owned 1.

Three joint ventures are not consolidated, and it owns 50 percent of NSK-Warner in Japan and China, 32.6 percent of Turbo Energy Private Limited in India and 49 percent of an inverter venture in China 1.

Among six consolidated ventures, it owns 70 percent of BuradaWarner in Korea and 80 percent of BorgWarner TorqTransfer Systems in Beijing 1.

It bought 100 percent of Drivetek AG, a Swiss engineering firm, on 1 December 2022 2. Of the facilities it lists, 37 have leased land rights or a leased facility 1.

For 2026 the company expects net sales of $14.0 billion to $14.3 billion, against about $14.3 billion in 2025 3. It expects free cash flow of $900 million to $1,100 million 3.

It expects a GAAP operating margin of 9.6 to 9.8 percent in 2026, and an adjusted margin of 10.7 to 10.9 percent 3.

Its board has authorized share repurchases through 2029, with $1.35 billion remaining as of the second quarter report 2.

The company announced new business awards on 5 August 2026 3. A transfer case for a Chinese carmaker is due to start production in the fourth quarter of 2026, and integrated drive modules with a global carmaker in 2027 3.

Production of a new eTurbo for a hybrid car and of two inverter extensions is expected to begin in 2029 3.

From restructuring, the company expects savings of about $100 million a year in PowerDrive Systems by 2026 1.