Strategic Positioning &

Launching Innovation

February 14, 2018

Scott D. Gallett

© BorgWarner Inc. 2

Vehicle Mobility Trends

POINT A POINT B

There will ALWAYS be a NEED for a

PROPULSION SYSTEM

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VEHICLEPROPULSION SYSTEM

CATEGORIES

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▪ Timing system

▪ Variable cam timing

▪ Exhaust gas recirculation

▪ Clutch plates

▪ All-wheel drive systems

▪ Enhanced starters

▪ Fans & fan drives

▪ Pictured products and many more…

$100

Combustion Products:

$250 $350

Boosting

Technologies

Exhaust Gas

Management

Transmission

Technologies

Combustion Propulsion** Includes engines, transmissions and all-wheel drive systems with no electrification, includes stop/start. All prices are estimates, actual prices will vary.

Variable Cam Timing

$45

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$300 $700 $900 $1200$200

Hybrid Propulsion** Includes mild, full and plug-in hybrid. All prices are estimates, actual prices will vary.

Combustion ProductsPLUS Hybrid Specific Products

▪ Exhaust heat

recovery systems

▪ Electric drive motors

▪ Disconnect clutch and

controls

▪ Pictured products and

many more… eBooster® iBAS SystemsP2 Hybrid Module

On/Off AxisPower Electronics Electric All-Wheel Drive

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▪ Electric all-wheel drive

▪ Liquid heater

▪ Auxiliary coolant pump

▪ Fuel Cell air supply

▪ Transmission Chain

▪ Friction Products

▪ Pictured products and

many more…

Electric Vehicle Products:

$500 $700 $1100

Cabin Air Heater eGearDrive® Electric Drive Motor Electric Drive Module

$200

Electric Propulsion** Includes battery electric vehicles, range extenders and fuel cells. All prices are estimates, actual prices will vary.

Power Electronics

$700

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Excellent Balance Across Propulsion Systems

Note: Participation Rate

$285

$200

50% 36% 26%

$240

CO

MB

US

TIO

N

HY

BR

ID

EL

EC

TR

IC

Estimated 2020

Average Content

Per Vehicle

Note: Excludes Sevcon

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We Must Always Satisfy All Three

ConsumerGovernment Regulations

Profitable Business

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Getting Innovation to the Road

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All Product Launches are NOT Equal

1. Both parties have experience

launching similar technology

2. One party has experience…

3. Neither party has experience…

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Working Framework

▪ Recognition by Both Parties

▪ Trust / Leap of Faith

▪ Management Involvement

▪ Relationships

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A Different Approach

Transparency

ExecutiveProgram

ManagementTone

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Conclusions

▪ Leading propulsion suppliers must

operate on a higher level

▪ Position product portfolio for

success no matter how markets

evolve

▪ Not all launches are equal

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Thank you!