Dana buys majority stake in Canada's TM4 to expand EV reach

Dana Inc. is buying a majority stake in Canada’s TM4 Inc. for $127 million, allowing the automotive supplier to become more vertically integrated in producing components for electric vehicles, and to increase its reach in China.

Dana, based in the Toledo suburb of Maumee, Ohio, already makes electric gearboxes and thermal-management technologies for batteries, motors, and inverters. 

TM4 is a subsidiary of Canada’s largest electricity producer, Hydro-Quebec, based in Montreal. TM4 makes electric motors, power inverters, and control systems for light vehicles as well as for commercial vehicles, marine, mining, rail, motorsports, and recreational-vehicle applications. Hydro-Quebec retains 45 per cent of TM4, based in Boucherville, Que.

Bigger reach in China

TM4’s current management team and its 130 employees remain in place, the companies said in a joint announcement on Friday.

The new TM4, a 55-45 joint venture between Dana and Hydro-Quebec, also includes a 50 percent stake in Prestolite E-Propulsion Systems. PEPS is a joint venture in China between TM4 and supplier Prestolite Electric Beijing Ltd. that was formed in 2012.

The China joint venture makes electric motors, inverters, generators and vehicle control units for electric buses and trucks, plus marine uses. In 2015, Zhongshan Broad-Ocean Motor Co. acquired Prestolite Electric, based in Plymouth, Mich.

Growth opportunity

On a global basis, buses and medium-duty trucks represent a huge opportunity in terms of electrification, Dana said in a presentation that accompanied the announcement.

Electric and hybrid powertrains account for about 5 percent of medium-duty trucks today versus an estimated 20 percent come 2023, Dana said. For buses, electrification is expected to grow to 45 percent from 25 percent in the same time frame, the company said.

At the same time, electrification for passenger cars is expected to grow to around 12 percent from 3 percent today; for light-duty trucks, that number will grow to about 3 percent from less than 1 percent today, Dana said.