Research · Sep 3, 2026
[BWA] BorgWarner Thesis 2026: Propulsion Cycle Drives e-Mobility Backlog Conversion
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.