Following its 2020 acquisition of Delphi Technologies, BorgWarner now has a vast portfolio of internal-combustion engine (ICE) foundation components, everything from fuel- and air-handling systems to ignition and boosting and powertrain controllers. A multinational supplier with massive ICE “exposure.” Yet vice president and chief strategy officer Paul Farrell is facing the rush of “death of ICE” developments with a palpable equanimity.

It’s the calm of an engineer who knows with certainty that nothing in automotive changes overnight – despite the brassy headlines and 15-years-from-now promises, there will be a protracted transition from ICE to electric vehicle (EV). Better still, Farrell said, is the confidence that BorgWarner’s business is built to navigate the evolution, regardless of the twists it takes. The pace of the transition, he admits, will be difficult to project, but he expects no substantial reactions from the ICE universe will be required until the latter part of the decade.

“There’s clearly a lot of regulatory pressures that would drive towards much higher levels of electrification in the back end of the decade. I think that that part of it is pretty clear. On a global basis, I don’t think we expect the ‘death’ of the IC engine at the end of the decade,” Farrell said in an interview with SAE International. “From that perspective, is there increasing amounts of EVs? Yes, for sure. I guess right now, if we looked at it, we will come to different answers. Nobody’s crystal ball is perfect, but we might say it’s [EV production] 20 percent, could be as high as 30%. And obviously that varies a lot geographically.”

But because of the global-regulatory-market matrix complexity of it all, OEMs and their suppliers will have to be adaptable in terms of committing to the long-timeline investments typical of ICE propulsion, he projected. “If we think the demand and the volumes are there, we’ll continue to make the investments,” Farrell said. “But at some level, I think the OEMs also have the similar challenge of how to apply their resources. I think it actually is happening kind of naturally, where they’re saying, ‘I’ve got to put my attention over here.’ For us, we’re really delivering on the needs of our customers as they come – and then we’ll manage that transition over time.”

Farrell said the diesel engine’s days clearly are coming to a close and gasoline fueling will carry the ICE into the uncertain near to midterm. “You’ll see a shift to gas and frankly, that movie’s already played out a lot. There’s probably that one last gen [eration of gasoline engine design]. As we look towards the middle of the decade – which from an engineering perspective really is now – there’s probably one more turn on the gasoline engines. Whether it’s high-pressure GDI, variable-geometry turbochargers, cooled EGR, there’s kind of that one last generation that are being worked on now that will come out.

Most of the significant ICE improvements and enhancements now will come “more by ‘add-ons’ on the electrification side,” that underlay the gradual evolution to full-electric propulsion, Farrell noted. “If you think about it meeting the challenges, you’ve got this base engine – and then you’re solving those added challenges that you’re calling out by hybridization around it. So, it becomes less about the technology specifically around the ICE engine and more about how you enhance it from an electrification perspective to beat those next bars of regulations.

“You could think of hybridization at some level as a transitional technology, and then you’ve got [more discrete electrification] coming in over time. We still have this strong base in combustion technologies. And that’s not going to go away. I don’t think in the next eight or nine years, anyway.” He does project there will be inevitable consolidation of suppliers, however, as ICE development is geared down. 

“If there’s, I don’t know, 15 fuel-injection players right now, you’ve got to assume that there won’t be [as many] in 2027 or whatever. So, I think having a strong market position and obviously solid market share in these various technologies is probably going to be not the worst place to be when all this starts to shake out.”

Pathways to electrification
The perspective of BorgWarner’s CSO is from an engineering foundation blended with business acuity. Farrell holds a doctorate in mechanical engineering from MIT, as well as master’s degrees in business administration and mechanical engineering. He said from the larger standpoint of the industrial equation, BorgWarner has been preparing and setting up its business for the sunsetting of ICE. Just prior to this interview, for example, BorgWarner announced a wholly owned subsidiary of the company would launch a voluntary public takeover of Akasol AG, German developer and manufacturer of lithium-ion battery systems for use in all manner of industrial vehicles, as well as ships.

Farrell said the Akasol acquisition forms a solid pathway for BorgWarner’s entry into electrification for the commercial-vehicle market, which has fewer market-influenced complications that many believe will enable a speedier electrification transition than that of the passenger-vehicle market. Purchasing Akasol and BorgWarner’s organic expansion on electrification and software development are the long “plays” that are happening concurrently with studying the prospects for ICE, he said.

Transitioning to electrification in all transportation segments “isn’t an epiphany that happened this year,” Farrell quipped. “It’s something we’ve been working for five, six years – maybe longer than that. Very steadily building capabilities, obviously with Remy [Delco Remy, acquired in 2015] in the rotating machinery categories. We’ve got Romeo power, again, a foothold in batteries. We’ve now added the announcement around the Akasol acquisition coming up, obviously the Delphi Technologies [acquisition] with a big focus there around electronics software and power electronics.

“We’ve been on this journey already for quite some time,” he continued. “We really feel like we’ve built a strong foundation and our task is, as the industry evolves, to make sure we’re evolving and positioned to stay ahead of it. It’s something we’ve been working and will continue to work throughout the next decade.”