BorgWarner Inc. (NYSE: BWA) FY2025 revenue ~$13.8-14.4B (-3 to -1%) with adj. EPS ~$4.20-4.55 reflecting continued post-2024 ~$10.5-11.0B aggregate Air Management revenue (~76% aggregate revenue mix; selected primary turbochargers + emissions + thermal management) + selected continued post-2024 ~$2.7-2.9B aggregate Drivetrain & Battery Systems revenue (~20% aggregate revenue mix; selected primary all-wheel drive + transmission) + selected continued post-2024 ~$0.6-0.7B aggregate ePropulsion + Power Electronics revenue (~4-5% aggregate revenue mix; selected continued post-2024 selected various e-mobility scale-up loss) + selected continued post-July 2023 PHINIA spinoff separation focus under continued President + CEO Joe Fadool since February 2024 (~2-year tenure as BorgWarner CEO). One of the largest US + global propulsion + drivetrain + e-mobility automotive Tier 1 suppliers. Founded 1928 as Borg-Warner Corporation in Chicago Illinois (~97-year heritage); selected post-1980s NYSE listing; selected post-2000-2024 ~$15B+ cumulative tuck-in M&A platform expansion; selected post-July 2023 PHINIA spinoff separation; selected post-February 2024 Joe Fadool CEO appointment. Headquartered in Auburn Hills Michigan; ~50,000+ employees globally with ~$13.8-14.4B revenue. Three primary business segments: Air Management (~76% ~$10.5-11.0B), Drivetrain & Battery Systems (~20% ~$2.7-2.9B), ePropulsion + Power Electronics (~4-5% ~$0.6-0.7B). Geographic mix: Europe ~38% + North America ~32% + Asia ~28% + selected various ~2%. Propulsion cycle (Air Management + Drivetrain): ~$10.5-11.0B Air Management revenue; ~$2.7-2.9B Drivetrain revenue; ~3-4M+ aggregate annual turbocharger units delivered. e-Mobility backlog + post-2023 PHINIA spinoff focus: ~$5-6B aggregate e-mobility backlog (~$1.5-2.0B aggregate annual revenue ramp toward ~$3B+ aggregate FY2027 e-mobility); selected post-July 2023 ~$3B+ PHINIA aftermarket + fuel systems spinoff separation. President + CEO Joe Fadool since February 2024 (~2-year tenure); CFO Craig Aaron. Capital return: ~$0.44 annual dividend FY2025 (~10-year continuous dividend track post-2010s); ~$300-400M aggregate FY2024-2025 buyback program (~$100-200M aggregate FY2025); aggregate capital return ~$200-300M; net leverage ratio ~1.5-2.0x; investment-grade Baa1/BBB+ credit rating. FY2026 thesis: Propulsion cycle + e-mobility backlog conversion + selected post-July 2023 PHINIA spinoff focus + ~$0.44 annual dividend + ~10-year continuous dividend track + ~$200-350M aggregate annual capital return + selected potential post-2024 dividend acceleration. Risks: Bosch + Continental + ZF + Magna + Aptiv + Denso + Chinese EV component competition, BEV transition acceleration, automotive OEM cycle, e-mobility scale-up loss.

[BWA] BorgWarner Thesis 2026: Propulsion Cycle Drives e-Mobility Backlog Conversion

Key Takeaways

BWA FY2025 revenue ~$13.8-14.4B (-3 to -1% YoY) with adj. EPS ~$4.20-4.55 reflecting continued post-2024 ~$10.5-11.0B aggregate Air Management revenue (~76% aggregate revenue mix) + selected continued post-2024 ~$2.7-2.9B aggregate Drivetrain & Battery Systems revenue (~20% aggregate revenue mix) + selected continued post-2024 ~$0.6-0.7B aggregate ePropulsion + Power Electronics revenue (~4-5% aggregate revenue mix; selected continued post-2024 selected various e-mobility scale-up loss) under continued President + CEO Joe Fadool since February 2024 (~2-year tenure). One of the largest US + global propulsion + drivetrain + e-mobility automotive Tier 1 suppliers.
Propulsion cycle (Air Management + Drivetrain): ~$10.5-11.0B Air Management revenue (~76% revenue mix; selected primary turbochargers + emissions + thermal management) + ~$2.7-2.9B Drivetrain revenue (~20% revenue mix; selected primary all-wheel drive + transmission); selected continued post-2024 selected various ICE + hybrid + selected various propulsion content per vehicle; selected ~3-4M+ aggregate annual turbocharger units delivered.
e-Mobility backlog + post-2023 PHINIA spinoff focus: selected continued post-2024 ~~$5-6B aggregate e-mobility backlog (~~$1.5-2.0B aggregate annual revenue ramp toward ~$3B+ aggregate FY2027 e-mobility); selected post-July 2023 ~$3B+ aggregate PHINIA aftermarket + fuel systems spinoff separation creating selected pure-play propulsion + e-mobility focus; selected post-February 2024 Joe Fadool CEO appointment.
Capital return + balance sheet: ~~$0.44 annual dividend FY2025 (~~$0.11/quarter; ~+0% growth; ~10-year continuous dividend track post-2010s); ~~$300-400M aggregate FY2024-2025 buyback program (~~$100-200M aggregate FY2025); aggregate capital return ~$200-300M FY2025; net leverage ratio ~1.5-2.0x; investment-grade Baa1/BBB+ credit rating.
FY2026 thesis catalysts: Propulsion cycle + e-mobility backlog conversion + selected post-July 2023 PHINIA spinoff focus + ~$0.44 annual dividend + ~10-year continuous dividend track + ~$200-300M aggregate annual capital return + selected potential post-2024 dividend acceleration.

Company Background

BorgWarner Inc. (NYSE: BWA) is one of the largest US + global propulsion + drivetrain + e-mobility automotive Tier 1 suppliers, founded 1928 as Borg-Warner Corporation in Chicago Illinois (~97-year heritage; selected pioneer US automotive component supplier; selected post-1928 selected various Borg & Beck Clutch + Warner Gear + Marvel-Schebler + selected various consolidations). Selected post-1980s NYSE listing transition; selected post-2000-2024 selected various ~$15B+ aggregate cumulative tuck-in M&A platform expansion (selected post-2003 ~$1.6B+ Honeywell turbocharger + selected post-2015 ~$1.7B+ Remy + selected post-2017 selected various Sevcon + selected post-2020 ~$3.3B+ Delphi Technologies); selected post-2020 selected various ~$1.6B+ AKASOL battery systems + selected various Hubei Surpass + Rhombus Energy electrification acquisitions; selected post-July 2023 ~$3B+ aggregate PHINIA aftermarket + fuel systems spinoff separation creating selected pure-play propulsion + e-mobility focus; selected post-February 2024 Joe Fadool CEO appointment (succeeded post-February 2024 Fred Lissalde retirement); HQ Auburn Hills Michigan; ~50,000+ employees globally.

BWA operates 3 primary business segments: Air Management ~~76% revenue (~~$10.5-11.0B — selected primary turbochargers + emissions + thermal management + selected various ICE + hybrid propulsion components) + Drivetrain & Battery Systems ~~20% revenue (~~$2.7-2.9B — selected primary all-wheel drive + transmission components + selected various battery systems) + ePropulsion + Power Electronics ~~4-5% revenue (~~$0.6-0.7B — selected primary EV traction motors + inverters + power electronics + selected various commercial vehicle e-mobility). Geographic mix: Europe ~~38% revenue (~~$5.3-5.5B) + North America ~~32% revenue (~~$4.4-4.6B) + Asia ~~28% revenue (~~$3.9-4.0B) + selected various ~~2% (~~$280-290M).

Capital return: ~~$0.44 annual dividend FY2025 (~~$0.11/quarter; ~+0% growth; ~10-year continuous dividend track post-2010s); ~~$300-400M aggregate FY2024-2025 buyback program (~~$100-200M aggregate FY2025); aggregate capital return ~$200-300M FY2025; net leverage ratio ~1.5-2.0x; investment-grade Baa1/BBB+ credit rating; selected ~$0.4-0.5B aggregate cash balance.

Propulsion Cycle (Air Management + Drivetrain)

The propulsion cycle is BWA's foundation thesis: ~$10.5-11.0B Air Management revenue (~76% revenue mix; selected primary turbochargers + emissions + thermal management + selected various ICE + hybrid propulsion components) + ~$2.7-2.9B Drivetrain & Battery Systems revenue (~20% revenue mix; selected primary all-wheel drive + transmission components) + selected continued post-2024 selected various ICE + hybrid + selected various propulsion content per vehicle + selected ~3-4M+ aggregate annual turbocharger units delivered. Selected primary BWA platform: turbochargers (selected post-2003 Honeywell turbocharger acquisition foundation) + emissions + thermal management + AWD + transmission + selected various global automotive Tier 1 supplier.

FY2025 propulsion dynamics ($10.5-11.0B Air Management + $2.7-2.9B Drivetrain): selected continued post-2024 ~3-4M+ aggregate annual turbocharger units delivered + ~$10.5-11.0B aggregate Air Management revenue + ~$2.7-2.9B aggregate Drivetrain revenue + selected various ~$200-280 aggregate content per vehicle + selected various ICE + hybrid mix + selected various automotive cycle. Selected post-2024 ~$0.20-0.30 incremental annual EPS contribution as propulsion cycle + selected various ICE + hybrid mix support continued automotive Tier 1 supplier profile.

FY2026 catalyst: continued propulsion cycle + ~$0.20-0.30 incremental annual EPS contribution. Selected aggregate ~$10.6-11.2B Air Management revenue + ~$2.7-2.9B Drivetrain revenue + selected various ~$220-290 aggregate content per vehicle + selected various ICE + hybrid + EV mix + selected various global automotive Tier 1 supplier scale. Risks: BEV transition acceleration (selected post-2025-2030 selected various EV penetration) + Aptiv + Magna + Continental + Bosch + ZF + Denso + selected various global automotive Tier 1 + selected various Chinese EV component competitive displacement + selected various automotive OEM cycle + global light vehicle production cycle.

e-Mobility Backlog + Post-2023 PHINIA Spinoff Focus

The e-mobility backlog + PHINIA spinoff focus is BWA's primary growth thesis: selected continued post-2024 ~~$5-6B aggregate e-mobility backlog (~~$1.5-2.0B aggregate annual revenue ramp toward ~$3B+ aggregate FY2027 e-mobility) + selected post-July 2023 ~$3B+ aggregate PHINIA aftermarket + fuel systems spinoff separation creating selected pure-play propulsion + e-mobility focus + selected post-February 2024 Joe Fadool CEO appointment + selected various AKASOL battery systems + Hubei Surpass + Rhombus Energy + Delphi Technologies + Sevcon aggregate ~$5B+ cumulative e-mobility platform expansion.

FY2025 e-mobility dynamics: ~$0.6-0.7B aggregate ePropulsion + Power Electronics revenue (~4-5% aggregate revenue mix; selected continued post-2024 selected various e-mobility scale-up loss) + ~$5-6B aggregate e-mobility backlog + selected ~$1.5-2.0B aggregate annual revenue ramp + selected various EV traction motors + inverters + power electronics + selected various commercial vehicle e-mobility. Selected post-2024 ~$0.05-0.15 incremental annual EPS contribution (selected continued post-2024 selected various e-mobility scale-up loss; selected post-2026 selected projected aggregate ~$2-3B aggregate e-mobility revenue + selected various e-mobility break-even trajectory).

FY2026 catalyst: continued e-mobility backlog conversion + ~$0.05-0.15 incremental EPS contribution. Selected aggregate ~$0.8-1.1B aggregate ePropulsion + Power Electronics revenue + ~$5-6B aggregate ongoing e-mobility backlog + selected various EV penetration + selected various e-mobility break-even trajectory. Risks: e-mobility scale-up loss (selected continued post-2024 selected various e-mobility scale-up loss) + Bosch + Continental + ZF + Magna + Aptiv + selected various Chinese EV component aggregate competitive displacement + EV adoption cycle.

Capital Return + Dividend Track

Capital return + dividend track: ~~$0.44 annual dividend FY2025 (~~$0.11/quarter; ~+0% growth; ~10-year continuous dividend track post-2010s) + ~~$300-400M aggregate FY2024-2025 buyback program (~~$100-200M aggregate FY2025) + aggregate capital return ~$200-300M FY2025 + net leverage ratio ~1.5-2.0x + investment-grade Baa1/BBB+ credit rating + ~$0.4-0.5B aggregate cash balance + selected post-July 2023 PHINIA spinoff capital allocation focus on selected pure-play propulsion + e-mobility focus.

FY2026 catalyst: continued ~~$0.44-0.50 aggregate dividend (~~+0-15% aggregate selected dividend acceleration) + selected continued ~$200-300M aggregate annual buybacks + selected continued investment-grade balance sheet. Selected ~10-year continuous dividend track + selected post-July 2023 PHINIA spinoff focus + selected ~1.5-2.0x net leverage support continued capital return discipline. Selected aggregate ~$200-350M aggregate annual capital return FY2026; selected normalization toward ~$0.50-0.60 dividend over time.

Key Core Metrics

FY2025 revenue ~$13.8-14.4B (-3 to -1% YoY) vs $14.0B FY2024; adj. EPS ~$4.20-4.55
3 segments: Air Management ~76% ($10.5-11.0B), Drivetrain & Battery Systems ~20% ($2.7-2.9B), ePropulsion + Power Electronics ~4-5% ($0.6-0.7B)
Geographic mix: Europe ~38% + North America ~32% + Asia ~28% + selected various ~2%
~3-4M+ aggregate annual turbocharger units delivered
~~$5-6B aggregate e-mobility backlog (~~$1.5-2.0B aggregate annual revenue ramp toward ~$3B+ aggregate FY2027 e-mobility)
~220M diluted shares; ~$200-300M total capital return FY2025
~$0.44 annual dividend FY2025 (~10-year continuous dividend track)
~~$300-400M aggregate FY2024-2025 buyback program (~~$100-200M aggregate FY2025)
Net leverage ratio ~1.5-2.0x
Investment-grade Baa1/BBB+ credit rating
President + CEO Joe Fadool (since February 2024); CFO Craig Aaron
Selected post-July 2023 ~$3B+ aggregate PHINIA aftermarket + fuel systems spinoff separation

Market Evaluation

BWA trades as a propulsion + e-mobility focused automotive Tier 1 supplier levered to propulsion cycle + e-mobility backlog conversion + selected post-July 2023 PHINIA spinoff focus. Bull case: ~$10.5-11.0B Air Management + ~$2.7-2.9B Drivetrain + ~$5-6B e-mobility backlog + selected post-February 2024 Joe Fadool CEO + selected post-July 2023 PHINIA spinoff focus + ~$200-300M capital return + ~10-year dividend track drive ~$4.55-5.00 adj. EPS FY2026 (+8-10% YoY). Bear case: BEV transition acceleration + Bosch + Continental + ZF + Magna + Aptiv + Chinese EV component competitive displacement + automotive OEM cycle + global light vehicle production cycle + e-mobility scale-up loss + EV adoption cycle trigger material EPS compression. Base case: propulsion cycle + e-mobility backlog conversion + selected post-July 2023 PHINIA spinoff focus + ~10-year continuous dividend track + ~1.5-2.0x net leverage discipline support continued ~$4.55-5.00 adj. EPS + ~$200-350M aggregate capital return FY2026.

Propulsion Cycle Drives e-Mobility Backlog Conversion Deep Dive

Selected continued post-2024 ~$10.5-11.0B aggregate Air Management revenue (~76% revenue mix; selected primary turbochargers + emissions + thermal management) + selected continued post-2024 ~$2.7-2.9B aggregate Drivetrain revenue (~20% revenue mix; selected primary all-wheel drive + transmission) + selected continued post-2024 ~3-4M+ aggregate annual turbocharger units delivered + selected continued post-2024 ~$0.6-0.7B aggregate ePropulsion + Power Electronics revenue + selected continued post-2024 ~~$5-6B aggregate e-mobility backlog (~~$1.5-2.0B aggregate annual revenue ramp toward ~$3B+ aggregate FY2027 e-mobility) + selected continued post-July 2023 PHINIA aftermarket + fuel systems spinoff separation creating selected pure-play propulsion + e-mobility focus + selected ~$0.44 annual dividend (~10-year continuous dividend track post-2010s) + selected ~$100-200M aggregate annual buybacks + selected ~1.5-2.0x net leverage + investment-grade Baa1/BBB+ credit rating drive BWA's primary FY2026 thesis. President + CEO Joe Fadool (~2-year tenure) leadership continues post-February 2024 CEO appointment focus on propulsion cycle + e-mobility backlog conversion + capital return discipline. Selected ~10-year continuous dividend track + selected post-July 2023 PHINIA spinoff focus + selected investment-grade Baa1/BBB+ credit rating + selected aggregate ~$200-350M aggregate annual capital return support continued BWA compounding profile. Risks: BEV transition acceleration (selected post-2025-2030 selected various EV penetration) + Aptiv + Magna + Continental + Bosch + ZF + Denso + selected various global automotive Tier 1 + selected various Chinese EV component aggregate competitive displacement + selected various automotive OEM cycle + global light vehicle production cycle + e-mobility scale-up loss + EV adoption cycle + selected post-July 2023 PHINIA spinoff considerations + selected aggregate post-2003 Honeywell turbocharger + post-2015 Remy + post-2017 Sevcon + post-2020 Delphi Technologies + selected various AKASOL + Hubei Surpass + Rhombus Energy aggregate ~$5B+ cumulative tuck-in M&A integration considerations.