WirtschaftsWoche Exclusive

Continental Sees Electric Car Losses

  • Why it matters

    Why it matters

    If it can’t turn the corner with electric driving technologies, Continental will not be able to offset an expected decline in demand for traditional combustion engine products.

  • Facts

    Facts

    • Continental is the world’s second-largest car parts maker after domestic rival Bosch and ahead of ZF Friedrichshafen, Canadian-Austrian firm Magna and Japan’s Denso.
    • The Hanover-based firm, 46-percent owned by Frankfurt-listed rival Schaeffler Group, is also the world’s fourth-largest tire maker after after Bridgestone, Michelin and Goodyear.
    • The blue-chip DAX-listed company issued a profit warning in October due to additional development costs, anti-trust expenses and operational problems in Japan, forecasting an adjusted operating profit margin of more than 6.5 percent, down from more than 8.5 percent previously.
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Continental's CEO Elmar Degenhart. Source: Arne Dedert / DPA

Continental has invested more than one billion euro in electric car technologies the past few years, but has little to show for it so far. The auto parts maker expects losses to last until at least 2019, Chief Executive Elmar Degenhart told WirtschaftsWoche, a business weekly and sister publication of Handelsblatt.

Mr. Degenhart, who confirmed the Frankfurt-listed company’s full-year outlook, said in an interview that the world’s second-largest car parts maker would not make money with electric car products “before 2020.”

“Investments are increasing. The necessary development costs are the biggest challenge for our industry,” Mr. Degenhart said about e-car technologies. “The shift from combustion engines to electro-mobility will only massively take off between 2025 and 2030.”

Electric driving is seen as one of the biggest transformations affecting the car industry, in addition to self-driving vehicles. U.S. firms Google, Apple and Tesla as well as Chinese rivals such as BYD have made inroads in the industry.

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