Eaton forms electric vehicle business unit
KALAMAZOO, Mich. — The company we mostly know as a transmission manufacturer is set to capitalize on the growing vehicle electrification market. The Michigan-based outfit has created a new business unit called eMobility that will focus on intelligent power electronics, power systems, and advanced power distribution and circuit protection.
In a telephone interview with Scott Adams, senior vice president, product management and sales, for the new enterprise, we asked a somewhat provocative question: Given how much activity there has been in this space in the last few years, is Eaton late to this game? The answer was a good-natured “No.” What’s happening with the new business unit is really a straightforward combining of capabilities to bring greater focus on an emerging opportunity.
The fact is, Adams told us, that Eaton derives about the same revenue from the electrical side of its business as it does from the vehicles side. The company’s electrical products and expertise are used all over the place in the truck and passenger-car worlds, and it’s active with all OEMs to one extent or another, he said.
“From a trucking perspective, you may remember our hybrid-electric solutions that we had seven or eight years ago,” he said, noting that Eaton dropped that effort here in North America. “But we’ve actually been active ever since then, mainly in China in the bus market. We’ve actually been selling hybrid systems there for the last eight or nine years and we now have about two billion miles on them. So we’ve been continuing that under our vehicle group, and then our electrical business has been working in the vehicle markets as well… in commercial vehicles and in some cases automotive too.”
The company says it has more than 15,000 hybrid systems on the road in the U.S., Europe, China, and other Asia-Pacific markets
Eaton’s power systems include electric vehicle transmissions for a variety of medium- and heavy-duty applications, as well as a 48-volt regenerative accessory drive system for heavy-duty trucks. The power distribution and protection category includes fuses, supercapacitors, and power distribution units, while converters and on-board chargers fall under the power electronics umbrella.
The new entity was formed by combining products, expertise and global manufacturing capabilities from Eaton’s electrical and vehicle businesses. It will be headquartered in Southfield, Mich., with design centers and manufacturing locations in Asia, Europe, and the Americas. Eaton runs nine R&D facilities worldwide.
Eaton’s existing line of electrified products – which includes DC/DC converters, PDUs, hybrid and battery-electric transmissions, and high-voltage fuses – serve as the foundation for eMobility to grow as electrification increases. Eaton projects its current electrified portfolio will account for approximately $300 million in revenue in 2018, and forecasts revenues of $2 billion to $4 billion by 2030 as new products and customers are added to the eMobility portfolio.
Eaton said eMobility is poised to capitalize on a global vehicle electrification market projected to grow to 15 million pure battery-electric vehicles and another 30 million hybrids, from mild to plug-in, by 2030. It plans to invest more than $500 million over the next five years in eMobility to develop new intelligent electrification products and solutions for passenger car, commercial vehicle, and off-highway customers.
“Our understanding of the unique needs of vehicle customers, along with our experience in transmissions and power electronics in the hybrid space, gives us a distinct advantage versus other suppliers,” said Jeff Lowinger, president, eMobility.
Asked when we might see the tipping point where light- and medium-duty, short-haul battery-electric trucks are as plentiful as gas and diesel types, Adams said it could come as early as 2025. With battery costs coming down and fleets already assessing the electric option, the key issue will be product availability. Volumes are still very low. He also sees a point coming soon when government incentives won’t be required to convince buyers to take the electric leap.
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