DETROIT—Power management supplier Eaton Corp. is joining the growing list of global suppliers restructuring their business portfolios to compete in the electric mobility segment.
Eaton, in a statement released Tuesday, said it is forming a new unit called eMobility, with plans to invest $500 million into the business by 2023.
The supplier said eMobility will develop intelligent power electronics, smart diagnostic technologies and predictive health monitoring. The unit will serve passenger car, commercial vehicle and off-highway customers on a global level.
The eMobility unit will combine resources from Eaton's electrical and vehicle groups, and will include about 1,200 employees, based in suburban Detroit.
Eaton produces converters, power distribution units, hybrid and battery-electric transmissions and high-voltage fuses. The company has more than 15,000 hybrid and plug-in hybrid vehicle systems on the road globally through Eaton's electrical and traditional vehicle arms.
Scott Adams, senior vice president of product management and sales for eMobility, told Automotive News the creation of the new business bridges the company's separate operations.
"We felt that the electrical part of the business could benefit from the knowledge that our vehicle groups has," Adams said.
Power distribution and protection includes fuses, supercapacitors and power distribution units, while the power electronics includes converters and on-board chargers. Power systems include "electric vehicle transmissions for a variety of medium- and heavy-duty applications, as well as a 48-volt regenerative accessory drive system for heavy-duty trucks," according to the company's release.
The global vehicle electrification market is projected to grow to 15 million pure battery-electric vehicles and another 30 million hybrids, from mild to plug-in, by 2030, according to Eaton.
"We are accustomed to dealing with very high voltage and very high power levels," Adams said. "That enables us to better develop product for higher voltage, higher power applications."
Eaton follows several major suppliers that have reworked their business structures to better compete in the markets for autonomous and electric vehicles.
In the last 20 months, big names such as Delphi, Johnson Controls, Autoliv, Honeywell and Faurecia have sold or spun off entire divisions. Others, including Continental and GKN, are pondering similar moves, Automotive News has reported.
But such moves face risks. A recent AlixPartners consumer survey found that while $255 billion in research and development and capital expenditures will be spent globally on more than 200 electric vehicle models by 2023, only 23 percent of Americans are "likely" to purchase a plug-in electric vehicle as of now.
Adams said Eaton plans to navigate consumer adoption with electrification—which often varies by region depending on charging infrastructure availability, incentives and regulations—while still providing solutions for internal combustion engines.
"Our view on the market is that even though there may be some variation in the short term, that over the long term this is going to happen," Adams said. "We think it's a good balance for us. Regardless of exactly the rate of adoption, we play in both spaces."
Eaton projects its current electrified portfolio will account for about $300 million in revenue in 2018, and forecasts $2 billion-$4 billion in revenue by 2030 as new products and customers are added to the eMobility portfolio.
Eaton reported sales of $20.4 billion in 2017.