Marelli partners up to play in e-axles

As it weaves new strategies out of the combined global portfolios of the former Calsonic and the former Magneti Marelli, 2-year-old Japanese-Italian supplier Marelli Corp. has added a layer — a critical piece that will enable it to compete in electric vehicle e-axles.

Marelli said last week that it has formed a joint venture with Belgian driveline and powertrain solutions supplier Punch Motive International to develop and manufacture the systems.

Marelli will supply electric motors, inverters and software to the venture, called Marelli Electric Powertrain Strasbourg, while Punch will supply gearbox components and contribute development and manufacturing expertise.

With the JV, Marelli is working to become a fully integrated systems supplier, said Hannes Prenn, who was named CEO of Marelli's electric powertrain business in March.

"The JV with Punch is really the missing piece for us to become an e-axle supplier," Prenn told Automotive News last week. "That's the minimum requirement you need to have in order to become successful in the overall electrification market."

Marelli was born in 2019 from the Japanese heating, air conditioning and exhaust supplier Calsonic Kansei and Magneti Marelli, the former auto components business of Fiat Chrysler Automobiles. Now, it needs a partner to develop products for electrification, Prenn said, and Punch fills gaps in Marelli's portfolio.

"This is really an important milestone for us because this complements and closes the gap we have had in terms of being a complete, fully integrated e-axle systems supplier," Prenn said.

"Our vision is not only supplying an e-drive system, but it's really about managing, controlling and optimizing the complete flow of energy within an electric car, and that's what we can do now with this JV."

Marelli, which posted $14.94 billion in sales to automakers globally in its 2019 fiscal year, made leadership appointments this year with the goal of bolstering its role in electrification, advanced driver-assistance systems and electronics businesses. The Punch deal will be one of the company's most fruitful moves, Prenn said.

"We need to see what else can fit into this JV," he said. "The journey is not finished here. We are already looking at some additional new things, potential acquisitions, partnerships, alliances.

"There's more to come. You need to have a certain scale and size in this business to survive, and that's absolutely what we're going to do."

Acquisitions, joint ventures and partnerships are running rampant as automakers and suppliers steer toward electrified powertrains and more autonomous driving technologies.

It's clear that teaming up is the only way to go forward — not just for suppliers, but also automakers, Dietmar Ostermann, U.S. automotive advisory leader for PwC, said last week during an Automotive News Congress Conversations webcast.

"On the OEM side, I think partnerships are always warranted when you are trying to optimize platform leverage and architecture leverage," Ostermann said. "That is just such a big driver of profitability and costs in the automotive industry."

This month, drivetrain supplier American Axle & Manufacturing Holdings Inc. announced a partnership with Israeli electric vehicle startup Ree Automotive to develop an electric propulsion system. North America's largest supplier, Magna International Inc., of Canada, has similarly partnered with Ree as well as EV startup Fisker Inc.

Axles and transmissions supplier Dana Inc. acquired the e-powertrain business Nordresa Motors two years ago to support its own transitions to electrified propulsion.

And that's just to name a few.

All of this makes the industry more competitive, and Marelli wants to be a leader, Prenn said.

"The e-drive and electrification market is also a very investment-intensive market, and not everyone has the firepower to go through the end of this journey," Prenn said. "With this JV on hand, the whole of Marelli can input the rest of the components to make it a full system supplier."