BorgWarner said it planned to spin off its fuel systems and aftermarket segments into a separate, publicly traded company.
After the spinoff is complete, BorgWarner would consist of the e-Propulsion & Drivetrain and Air Management segments.
"The intended separation of our Fuel Systems and Aftermarket segments would be an important next step to further our pivot to EVs," CEO Frederic Lissalde said in a news release Tuesday.
BorgWarner added it believes the company would "ultimately achieve or exceed" its stated target of 25 percent of revenue from electric vehicles by 2025.
Shareholders would receive shares in the new, as yet unnamed company on a pro-rata basis. CFO Kevin Nowlan said BorgWarner hoped to complete the spinoff by the end of 2023.
Lissalde told analysts in a conference call on Tuesday that the separations was consistent with BorgWarner's strategic plan, which called for the disposition of up to $4 billion in assets by 2025.
He said that the Fuel System and Aftermarket units "would not have been prioritized under the BorgWarner umbrella, given the focus on prioritizing electrification."
"Both businesses are very strong and have great momentum," he said. "It's time to focus on accelerating the EV business even further."
A number of other suppliers have recently spun off or divested units considered to be "noncore" in order to focus on future technologies such as electrification and autonomous vehicles.
In one recent high-profile transaction, Delphi Automotive, the former GM supplier division, divested its powertrain unit in December 2017 as Delphi Technologies and renamed itself Aptiv.
BorgWarner bought Delphi Technologies in a 2020 deal that valued Delphi at about $3.3 billion.
BorgWarner, based in Auburn Hills, Michigan, ranked 15th on the Automotive News list of top 100 global suppliers, with 2021 sales to automakers of $13.99 billion.
Its main products are electric drive modules, electric motors, turbochargers, high-voltage heaters and inverters.
Through the first nine months of 2022, BorgWarner's Air Management segment generated revenue of about $5.5 billion and adjusted operating margin of 13.7 percent, BorgWarner said, while the e-Propulsion and Drivetrain segment generated revenue of about $3.9 billion and adjusted operating margin of 6.9 percent.
In the same period, Fuel Systems segment generated revenue of approximately $1.7 billion, with an adjusted operating margin of 11.3 percent, the supplier said, while the Aftermarket segment generated revenue of just under $1.0 billion and adjusted operating margin of 14.5 percent.
Reuters contributed to this report
