Electrifying the Future: A Tier 2 Supplier’s Smart Shift to EV
In the dynamic world of automotive evolution, a Tier 2 auto supplier found themselves at a crossroads. With the electrification wave surging, they sought a bold, capital-intensive strategy. Under our team’s guidance, they not only adapted but flourished, paving the path for an electrifying future in the industry.
Snapshot
The Challenge
Riding the EV Wave Amidst Global Turbulence
For our Tier 2 supplier, the automotive landscape was brimming with challenges. With global disruptions, from unpredictable trade scenarios to the global health crisis, supply chain reliability was at risk. The EV revolution demanded incessant product evolution and the stringent environmental norms further exacerbated the situation. With competition globally intensifying, a game-changing strategy was imperative.
How We Helped
Strategic Acquisitions and the Electric Steel Advantage
With a focused strategy, the supplier earmarked an impressive $100mm for bolt-on acquisitions, primarily eyeing businesses deep-rooted in the EV arena. This wasn’t just about expansion; it was a strategic move to capture and amplify crucial EV capabilities.
In addition, an ambitious $30mm was invested in pioneering electric steel production in Mexico. This wasn’t any steel; electric steel is renowned for its impeccable efficiency, becoming an essential element for EV motors. Through this dual approach, the supplier was not merely reacting to the market, but preemptively setting industry benchmarks.
The Result
Accelerating Ahead with Electric Momentum
Financially, the supplier’s EBITDA margins soared from 10% to 18% and its revenue journey doubled. But the real success lay in the narrative shift. With its electric steel endeavor, it established itself as a pioneer in EV component supply. The acquisitions broadened its expertise, making it the go-to for diverse EV needs. Through strategic capital use, the supplier didn’t just weather industry storms; it emerged as a major player in the Tier 2 automotive space.
It’s Time to Get Strategic with Capital Use and Acquisitions
Does your firm need another set of eyes on its strategic use of capital? Let Bellwether help ensure your acquisitions and other investments are firing on all cylinders.
