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DETROIT — To establish a foothold in the growing electric-vehicle space, power management company Eaton Corp. is leaning heavily on its “bread and butter” electrical business.
Eaton brought new offerings from its eMobility business to showcase to the industry on the main floor of the Detroit auto show this week, including advanced power management and distribution technology, EV gearing and inverters — all of which are scheduled to be released in the next year or two.
At the core of much of Eaton’s EV systems is a lot of “legacy technology,” said Kevin Calzada, Eaton’s eMobility global product strategy and marketing manager. Some of that legacy tech stems from the company’s traditional automotive business, but a large share of it is adapted from Eaton’s electrical business, which accounts for roughly two-thirds of the supplier’s revenue.
“That’s our bread and butter,” Calzada told Automotive News. “That’s the story of how we formed our eMobility business. We have the right to win in that automotive space because of what we have on the vehicle side combined with the product coming from our electrical group.”
Eaton is betting big on establishing a strong foothold in the increasingly competitive EV supply chain. It launched its eMobility unit in 2018 with an initial investment commitment of $500 million over five years.
Revenue from eMobility is on the rise, accounting for about $136 million in revenue in the second quarter of 2022, up 54 percent from $88 million a year earlier, according to Eaton’s latest earnings report. Still, the unit accounted for only 2.7 percent of the supplier’s total revenue for the quarter and has a long way to go to achieve the annual sales target of between $2 billion and $4 billion the company set in 2018.
But Eaton has continued to invest in recent months, most notably by acquiring electric connectivity components supplier Royal Power Solutions for $600 million in January.
Many of Royal Power’s components were on display at Eaton’s auto show booth and are integrated into the systems the supplier is showcasing. The acquisition will help Eaton to differentiate its systems from others in the marketplace, Calzada said.
“A lot of the content that goes into our solutions is now Eaton content,” he said. “It helps us to be competitive in the market by owning our own products and streamlining the design cycle and time-to-market.”