Conti Begins Slow Pivot from Piston to Electric Tech

Continental AG says it will invest another €300 million ($328 million) on its electric powertrain business by 2021.

The spending, which will go primarily to product research and development, is part of Conti’s new Powertrain Strategy 2020+. The two-pronged plan will further develop advanced combustion engine technology according to customer demand. But the company also intends to slowly redirect product development spending to electrification, sensors and software systems—technologies needed to meet increasingly stringent emission laws.

Conti says global demand for combustion engines won’t peak until sometime after 2025. Over that period company will continue to support that market with such innovations as 48-volt electrical systems and advanced hybrid powertrains.

Longer term, adds Jose Avila, president of the Powertrain Div., “We have to expect gradually falling demand for newly developed mechanic and hydraulic engine components.” He notes that slumping demand for diesels has little impact on Conti’s bottom line because diesel-related sales contribute less than 2% of corporate revenue.

Conti figures it has invested €1 billion over the past five years in hybrid and all-electric powertrains. The company forecasts EVs and hybrids will capture 10% and nearly 30%, respectively, of the global car market by 2025.