Valeo completes acquisition of Siemens e-motor JV

PARIS -- Valeo has completed its acquisition of Siemens’ 50 percent share of an electric motors joint venture and will integrate it into its powertrain systems division, the supplier said Tuesday.

The JV, Valeo-Siemens eAutomotive, was established in 2016 to develop and sell electric motors, axles and powertrain electronics. Valeo said in February that it would buy the Siemens stake at a cost of 277 million euros ($288 million), increasing its net debt by 741 million euros.

The venture has been a money-loser, but Valeo CEO Christophe Perillat says he expects it to reach profitability at some point this year. 

He said he expected to reach synergies of 120 million euros a year by 2025, by combining its high-voltage activities with Valeo’s longtime strength in 48-volt mild hybrid components. 

“The technologies and the competencies for the two technologies are extremely close to each other, so to be prepared for a huge acceleration of high-voltage electrification, I can count on the people, the expertise and the knowledge that today is focused on low-voltage,” Perillat told Automotive News Europe in a recent interview. “It's going to be easy for me to put them under one roof and benefit from a scale effect.”

Valeo said last month that it had exceeded its target for the joint venture of 4 billion euros in orders in 2021-22. 

Valeo Siemens eAutomotive, now based in Germany, has 4,000 employees, with production sites in China, Germany, Hungary and Poland. Valeo has not said if there will be job reductions. 

Many automakers are bringing production of electric motors in-house to better control costs and to ensure continued employment for workers now engaged in internal-combustion activities. Perillat, however, says there will be sufficient volume for suppliers as the overall EV market grows. Valeo has recently agreed to develop and build electric motors with Renault, which has built most of its own motors.

Valeo says the overall value of the high-voltage (400 volts and up) powertrain market will grow at an annual rate of 18 percent through 2030 to a value of 92 billion euros, with 40 percent of that going to suppliers.  

By that year, 35 percent of global vehicle production will have a high-voltage drivetrain (full-electric and plug-in hybrids), the company said.