Diversified supplier Magna International Inc. said Thursday it expects to generate $2.5 billion in annual revenue from electric vehicle battery enclosures by 2027, up significantly from just $100 million in 2022.
The enclosures, which house high-voltage batteries and other important EV components, are seen as a major area of growth for North America's largest parts supplier as it looks to position itself for success as automakers roll out new EVs. This year, the company committed around $700 million to expand battery enclosure production at two plants in Michigan and Ontario in order to supply battery enclosures for the Chevrolet Silverado EV and the Ford F-150 Lightning electric pickup.
The $2.5 billion estimate for 2027 battery enclosure revenue is significantly higher than last year's estimate for 2027, when Magna expected around $1.5 billion. Magna expects sales of between $400 million and $500 million this year, with that figure rising to between $1.6 billion and $1.7 billion by 2025.
The battery enclosures business "has exceeded initial expectations," Magna CEO Swamy Kotagiri said during a virtual presentation to investors. "We're establishing a strong market presence in key regions and building a competitive mode, a strategy similar to the truck frame business that we initiated throughout North America in the late 1980s."
In addition to the Silverado EV and F-150 Lightning business, Magna said it has been awarded business for seven other, unnamed models: two crossovers and a sedan from Asia-based automakers, two sedans and a crossover from European-based manufacturers and a large SUV from a North American customer.
"There are others in the market, but I don't see anyone having as broad and nonconstrained a view of the product as we do," Kotagiri said.