BOSCH e-axle expansion strategy

Abstract

The E-Axle combines a motor, an inverter, and a transmitter, which can be installed in traditional ICE, hybrid, or electric vehicles. When electricity is supplied toE-axle, it helps in generating torque from the drive shaft connected to tires and also helps in driving the vehicle. The market for Eaxles is valued at $7.21 billion in 2020 and is expected to grow at a CAGR of 31.4% from 2020 to 2028, reaching $65.73 billion by 2028. OEMs are attempting vertical integration and in-house production of e-axles, but it will take four to five years to develop the necessary capabilities. Bosch intends to capitalize on this opportunity as OEMs seek local solutions for e-axles to decouple from Chinese suppliers. Bosch must investigate the available options to increase the market fore-axles with margin in the status quo and value-added services in a cost-competitive market. Additionally, examine all other e-vehicle industry verticals for sustainable expansion opportunities. In this report, we examine these options, the competition, incentives for Bosch, and whether or not Bosch should enter the market. The derivative projects for two-wheeled vehicles, heavy motor vehicles, three-wheeled vehicles, and fleets used by last-mile delivery partners are also investigated. Charging infrastructure, battery management system, product differentiation, product & organizational restructuring, and the impact of backward integration on global operations have been discussed. According to the analysis, it appears that for Bosch, the two-wheeler option in derivative projects is not profitable. In the case of heavy-duty motor vehicles, Bosch is capable of re-engineering, but OEMs are unwilling to experiment with the current architecture. The 3-wheeler market size in India is insufficiently lucrative for Bosch to enter. Nevertheless, Bosch is currently working on a pilot project for fleet management, which will continue if successful. According to the current competitor's analysis, very few companies have the ability to develop connectors that can be established in accordance with Indian standards. The remainder, however, is a commodity that Bosch does not wish to enter. As one of Bosch's most profitable businesses, the battery management system will undergo incremental changes over the next 8 to 10 years; however, it is a commodity product. For product differentiation in e-axle inverters, the German division of Bosch is developing semiconductors with Silicon carbide as a base material, which provides energy efficiency in the range of 5 to 8 percent and has the potential to be profitable. In addition, Bosch is reducing its overhead costs from 18% to 8% by product and restructuring its organization to remain competitive with Chinese companies. In accordance with this, the Bosch engineering team is developing a few major components of the e-axle that can further increase the company's margins.