Schaeffler says EV boom gives way to rise in hybrid demand

Schaeffler is slowing the ramp-up for components for full-electric vehicles as drivers in the U.S. and China prefer to buy hybrid vehicles with growing uncertainty around the speed of EV uptake.

“The EV boom has slowed down and there is clearly a renaissance of hybrid drivetrains,” CEO Klaus Rosenfeld said Tuesday in an interview. “As carmakers have to comply with emissions targets, the trend toward electrification is intact.”

The industry is revamping strategies due to the slowdown in EV demand.

French auto parts supplier OPmobility has warned that EV production is running at just under half the level of automaker expectations.

General Motors last month walked back a goal of building 1 million EVs annually and Volkswagen Group started talks to potentially shut a plant in Brussels that makes the electric Audi Q8 E-tron SUV due to poor demand.

Schaeffler, which makes ball-bearings and a range of auto and industrial components, isn't going back to the drawing board on supplying EVs, though the trajectory for full-electric drivetrains has slowed, Rosenfeld said.

The company's EV parts plants are still ramping up with “significant” order books for those parts, he said.

Revenue from e-mobility rose 10.3 percent during the first half of the year driven by demand from China and the U.S. for a range of powertrains and new products becoming available.

Order intake through June amounted to €2.1 billion ($2.3 billion), reaching early a target of €2 billion to €3 billion for the full year.

The company is also pushing ahead with a merger of car parts supplier Vitesco Technologies to bolster its position in EVs.

Schaeffler in October made a €3.64 billion offer to buy the company as part of efforts by the Schaeffler billionaire family to reshape its industrial empire comprising Schaeffler, Continental and Vitesco.