(AOF) – Valeo and the CEA have signed an agreement to collaborate on the next generations of power electronics, which are at the heart of the challenges of tomorrow’s electric mobility. The Valeo and CEA teams will together carry out advanced research on innovative electronic technologies, in order to improve the efficiency of electric vehicles (gain in autonomy), to optimize the traction chain and to reduce the weight of the vehicle. on-board power electronics.
Xavier Dupont, President of Valeo’s Powertrain Systems division, said: “The world of mobility is undergoing an unprecedented transformation, which is reflected in a considerable acceleration of electrification. Valeo is at the heart of these transformations, and this new cooperation with the CEA in the field of power electronics will enable us to further accelerate in the field of electrification, by offering the best technologies while meeting the challenge of carbon neutrality.”
For its part, the CEA brings its expertise in the fields of microelectronics and materials, but also its skills in the definition and design of a digital twin to optimize the conversion systems studied.
For Sébastien Dauvé, Director of CEA-Leti, “this agreement confirms the mobilization of the CEA teams on the important issues related to the electrification of vehicles. This partnership is completely in line with our mission to support industry, which is establishes from the design of innovative power components to the development of high-performance conversion systems.”
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Key points
– “Tier 1” automotive supplier, world leader in electrification and driving assistance;
– Activity of €17.4 billion, divided into 4 areas – visibility, propulsion, thermal and comfort & driving assistance, activity 1
time
mounts bringing 84% of sales;
– Strong exposure to Asia (34% of sales of 1
time
rising, including China, the leading market with 16%), behind Europe and Africa (45%) but ahead of the Americas (21%);
– Business model taking advantage of automotive market trends: electrification, acceleration of ADAS and reinvention of life on board (comfort and driving assistance) and lighting;
– Open capital with strong shareholders (5.13% for the bpi and 5.16% for the Harris fund), Jacques Aschenbroich chairing the 14-member board of directors, Christophe Périllat being managing director;
– Cleaned up balance sheet -€3.3 billion in net debt, i.e. 89% of shareholders’ equity- and financial visibility -€4.9 billion in cash.
Challenges
– 2022-25 “Move up” strategy: average annual outperformance of original equipment sales of more than 5 points / operating margin of 14.5% / generation of free cash flow of $800 to & billion / disposals of non-strategic assets of 500 M€ over the duration of the plan;
– Innovation strategy in 2 axes, industrial organization and the offer of ecological and safe solutions, innovation bringing 65% of order intake:
– dynamic R&D policy for the 3
th
French patent agent and 1
er
French worldwide (9.9% of sales), with a portfolio of nearly 35,000 patents and 5,000 software engineers, including 200 in artificial intelligence,
– global open innovation with start-up incubations, equity investments and industrial partnerships, as with Safran, and pure research, for Valeo.ai;
– “CAP 50” environmental strategy aiming for carbon neutrality by 2050:
– “CAP 50” plan for carbon neutrality in 2050, with, for 2030: – 75% for emissions linked to operational activities, – 15% for those linked to supply and – 15%, for those linked to use end of the products;
– 2/3 of the sales of 1
time
assembly incorporating products that limit their impact, circular economy integrated into production, launch of green loans;
– Strong ambitions for Valeo Siemens eAutomotive, specialized in high-voltage electrification and now integrated into the group (8% then 12% operating margin in 2022 and 2024 and €2.9 billion in order intake);
– Spin-offs from the joint venture with the Korean Kapec, destined to be the world leader in torque converters (gearboxes) with 21% of the market
– Order intake of €13.1 billion at the end of June -1.7 times original equipment sales-, driven by ADAS and electrification.
Challenges
– 4 major challenges – weak market growth, inflation of raw materials, shortage of electronic components and wiring harnesses and the indirect impact of the Russian-Ukrainian conflict on car manufacturers, and therefore by consequence on equipment suppliers – having led to a loss net at 1
er
semester ;
– Difficulties in the Visibility Systems division, affected by an unfavorable product mix in China and Europe and declining profitability in the Thermal Systems division, despite an increase in sales;
– After a 5% increase, 3 points higher than market growth, confirmation of 2022 objectives: sales of €19.2 to €20 billion, operating margin of 3.2 to 3.7% and negative free cash flow at €320 M€.
Negotiations with builders
On average, equipment manufacturers represent between 60 and 85% of the manufacturing cost of a vehicle. According to the Federation of Vehicle Equipment Industries (Fiev), negotiations are very tense with manufacturers regarding the passing on of increased costs. The price increases concern both electronic components, raw materials, such as steel, nickel, lithium or palladium, energy and transport. Equipment manufacturers mainly negotiate with Stellantis and Renault to set up indices to pass on increases. They are also betting on innovation, differentiation, upgrading and internationalization.