On May 17, Vitesco Technologies, a powertrain technology and sustainable mobility supplier, held its 2023 Annual General Meeting of Shareholders at its German headquarters in Regensburg. Andreas Wolf, CEO of Vitesco Technology, said in his speech that the total order value of Vitesco Technology in 2022 will reach 14 billion euros, of which electrification-related products will account for 10.4 billion euros. Vitesco Technology has a savings order of about 60 billion euros, of which products related to electric mobility account for 46%.
As the former Continental Group’s powertrain business group, Vitesco Technology provides the market with key components and intelligent system solutions suitable for electric, hybrid and internal combustion engine drive systems. The company’s products include electric drive systems, electronic control units, sensors and actuators, and exhaust aftertreatment solutions.
On September 16, 2021, after three years of adjustments, Vitesco Technologies was officially split from Continental and successfully listed on the Frankfurt Stock Exchange in Germany at an issue price of 59.8 euros. An Lang once pointed out that with the completion of the listing, Vitesco Technology has stronger flexibility, a clearer market positioning, and a strategic focus on electrification.
Previously, Gregoire Cuny, President of Vitesco Technology China, said in an interview with a reporter from the 21st Century Business Herald that it is expected that a turning point will be reached in 2027, when the total number of pure electric vehicles and plug-in hybrids will exceed the total number of fuel vehicles. Vitesco Technology is optimistic about the long-term development of electrification and accelerates its transformation, and regards Europe, the United States, and China as the three key markets for its efforts.
In Gu Ruihua’s view, among the three major components of electrification – motors, battery management systems and inverters, battery management systems and inverters are mainly purchased from outside. Although the motor manufacturers tend to self-develop, 40% still come from External supply, which also presents an opportunity for Tier 1.
“No matter how much the OEM’s self-developed parts are, from the perspective of external procurement, this cake is very large. From the current scale of external procurement, we estimate that it will increase by 8-11 times by 2030. Furthermore, OEMs In the process of self-development, some key components are also needed, and the market for the superposition of the two is very huge for us.” Gu Ruihua said.
At the 2023 Annual General Meeting of Shareholders, Anlang emphasized that his plan for 2023 is to further increase sales and EBIT despite ongoing global challenges. According to Vitesco Technology’s forecast, the sales of the electrification business will reach 5 billion euros by 2026, and it is expected to reach 10 billion to 12 billion euros in 2030; at the same time, it plans to achieve climate neutrality in the production process by 2030.
On May 12, Vitesco Technology released its financial report for the first quarter of 2023. According to the financial report, Vitesco Technology’s sales in the first quarter were 2.31 billion euros, a year-on-year increase of 2.5%. After adjusting for changes in the scope of consolidation and foreign exchange effects, sales increased by 1.4 percent. Adjusted EBIT was €37.1 million, down 22.2 percent year-on-year. The quarter’s net loss widened by 348.7% to 50.7 million euros due to the impact of one-off charges.
At the same time, Vitesco Technologies’ free cash flow was negative EUR 41.1 million due to the increase in inventories required by the market and continued investments related to new orders placed in previous quarters. Capital expenditures amounted to EUR 98 million. As of March 31, 2023, Vitesco Technologies’ net asset ratio was 39.1%.
In addition, in the first quarter, Vitesco Technology’s new orders reached 1.4 billion euros, of which electrification-related products accounted for 839 million euros. So far, the total order value from the electrification business in 2023 has exceeded 4 billion euros.
Vitesco Technology expects that the market environment in the second quarter of 2023 will still be full of challenges and uncertainties. While the situation is expected to improve slightly, supply bottlenecks are likely to continue to drive down production.
Gu Ruihua said that the biggest bottleneck still lies in the problem of semiconductors. “After the epidemic, China’s economy has rebounded rapidly, resulting in a shortage of silicon wafers that is more obvious than other regions. The chip shortage two years ago has continued to this day. Some important suppliers Due to the shortage of chips, the supply of customers has been affected.”
However, he also pointed out that the chip shortage is both a challenge and an opportunity, which shortens the distance between Tier 1 and OEMs. “We have to communicate closely with customers about the chip situation every day, which is why we have more obvious problems in new orders. growth. On the one hand, there are bottlenecks, and on the other hand, our mutual trust has been consolidated.”
In addition, the relationship between OEMs and Tier 1 is also undergoing strategic changes. OEMs hope that their influence and market can gradually advance to the front end of the supply chain. Some OEMs also have strong interests in mining and other aspects. 1, it is also necessary to actively integrate into the new concepts of OEMs.
According to Gu Ruihua, since 2019, Vitesco Technology has invested more than 500 million euros in China, which is used in production lines, R&D centers, quality laboratories, etc.; the R&D team in China has more than 600 engineers and is constantly expanding. “At the same time, we are also strengthening cooperation with new forces. For example, in terms of software, we are closely carrying out horizontal learning with new forces. We have expertise in systems and manufacturing. In the field of software, we hope to cooperate with new forces to achieve a win-win situation.”