Gallett says BorgWarner decided to discuss its new business plan publicly about 18 months ago to avoid being classified on Wall Street as a company that merely supplied parts for old-line ICEs.

Roughly 50% of the supplier’s revenue still comes from engine components such as turbochargers, variable cam timing devices, exhaust-gas-management systems and transmission technologies.

But BorgWarner also has been a key supplier to Tesla ever since the first Tesla Roadster appeared in 2010. In addition, 36% of its revenue now comes from the components it supplies for hybrid systems. With the recent acquisition of Remy, General Motors’ old in-house supplier of electric motors, BorgWarner now estimates 26% of its revenue will come from electric drivetrains.

“We wanted the investment community to know we were in these markets, too,” Gallett says.

“What we’re seeing is, it’s no either-or” between IC and alternative powertrains.

The company supplies eGearDrive transmissions for EVs as well as electric-drive motors, power electronics and electric-drive modules that can be adapted for use in different vehicles. “We supply virtually an entire electric vehicle system” except for the battery, he says, adding new regulations in Europe and China have accelerated the company’s push into hybrid and electric powertrains.

At the same time, the new business follows BorgWarner’s longtime strategy to maintain a broad customer base and geographic diversity.

“There’s a part of it that’s strategic. We’re not smart enough to predict where the market will go,” he said. “We just know we want to continue to grow,” Gallett says.

Expanding into electronics has led to new ideas about how to use electrification of vehicles to improve fuel economy with conventional IC powertrains, he notes. The wider use of 48V batteries in future vehicles will only accelerate this trend because electric motors can be added at several positions along the drivetrain.

Changing regulations, particularly in China, where the push for electrification has been jump-started by new government mandates, have made a broad approach an absolute necessity, he says.

Turbocharged hybrids, electrically actuated turbochargers and electrically driven compressors to mitigate turbo lag figure prominently in powertrains’ future, company executives say. BorgWarner executives also believe engine downsizing will continue while competition in the turbocharger market from companies such as Honeywell, IHI of Japan and Mitsubishi Heavy Industries increases.

In 2006, 7.2% of light vehicles sold in the U.S. had turbocharged gasoline or diesel engines, and that figure has grown every year since, reaching 25.6% in 2016, according to WardsAuto data. The penetration rate of turbocharged engines in Europe is approaching 70%, Honeywell executives have said.

OEM customers have different levels of expertise in hybrid and electric vehicles, and suppliers such as Borg Warner should be ready to step in and help with the launch of new products. “Not all launches are equal,” Gallett says.