Interview with EV drivetrain specialist GKN Automotive

An engineering firm has become the world’s premier supplier of automotive driveline systems. We speak to the man in charge…

If there were a car company in existence today, with a workforce of 27,000 people in 20 countries, that harboured so much design capability that its expertise were evident in half of the 80 million cars made last year globally, its brand would be a household name, right?

Well, there is a car company that fits the bill, but for the insertion of one extra word: components. This UK-based global business is actually a car components manufacturer, but because its core products don’t actually roll on their own wheels, it sits somewhat below the radar compared with a Land Rover or even an Aston Martin, all of which are puny by comparison.

The company is GKN Automotive, a London-based technology group that bills itself as the global leader in automotive driveline and e-drive systems. It has six R&D sites and 51 factories around the world, made 80 million driveshafts last year, is a “trusted supplier” to 90 per cent of the world’s car makers, generated annual sales worth almost $9 billion in 2019 and aims to do even better this year, buoyed by rapid growth in demand for its electric drive systems, which can mean motors, gearboxes, axles, inverters and power electronics.

But even this isn’t enough for GKN’s ambitious CEO of the past three years, British-born Liam Butterworth, who recently unveiled plans to double the firm’s size by 2030 by staying at the leading edge of the rush towards electrification.

Already the leader in integrated e-drive systems (1.5 million EV propulsion systems delivered to date), GKN recently announced a move into advanced 800V tech, honed via a partnership with Jaguar Racing in Formule E. According to Butterworth, this will “create faster-charging cars with improved driving performance, battery range and even greater efficiencies.” Experimental 800V GKN systems are already undergoing advanced development in real-world applications.

Unlike other EV specialist companies whose progress is often geared to the uncertainties of battery progress, GKN’s driveshaft-plus-edrive business promises relatively hassle-free expansion, as long as it can continue to handle the need for rapid change. In 2019, around 90 per cent of GKN’s products went into internal combustion vehicles, but by 2025 the company forecasts that the ICE proportion will have halved, with mild hybrids making up 29 per cent of its market, full hybrids accounting for 11% and battery EVs taking 15 per cent.

Meanwhile, the global car market continues expanding as emerging markets accelerate: GKN believes 102 million cars will be made in 2030, compared with 89 million in 2019.

Oddly, the GKN name was better known half a century ago than it is now. A company that began life in 1759 with the founding of a Welsh ironworks, it became Guest, Keen and Nettlefold (GKN) at the beginning of the last century, then came to prominence in the car world around 1950 as a supplier of components for the game-changing Jaguar XK120 and its Le Mans-winning siblings. In the 1960s, GKN won plaudits for developing and supplying constant velocity (CV) joints for Minis and the many transverse front-drive models that followed.

In recent times, GKN was a somewhat fusty industrial group divided into several divisions, until in 2017 it was acquired and completely reorganised by the venture capital group Melrose. Butterworth, who had been running the US-based Delphi business (a specialist in fuel systems for internal combustion engines), was hired to carry out a root-and-branch reorganisation of the most promising parts of the business, newly titled GKN Automotive.

Butterworth is an engineer by training who began his career as a shop-floor apprentice, working in the old Burnley-based Lucas electric components business while acquiring his qualifications. He sees starting at the bottom as a key aid to modern management: “It helps you relate to the people in our plants; to understand what they need to know about our business.”

While he was eyeing the opportunity to join GKN from Delphi, Butterworth says he was impressed by how “bulletproof” the new business was as the automotive world moved towards electrification. “We had a core business based on anything that turned a vehicle’s wheels, which wasn’t going to die,” he says. “But then there was this rapidly expanding e-drive opportunity: the question was how to reorganise and invest to take best advantage of a huge opportunity.”

The scale of the potential business is clear from the greater value of EV components in a new car compared with driveline parts in an old one: GKN’s parts in a typical ICE 4×4 might have run to $2300 before 2019, but the value of its contribution to a new BEV 4×4 is likely to be closer to $6000. Apply such thoughts to 50 per cent of the world’s cars and you’re looking at a remarkable opportunity.

Many European component giants have suffered at the hands of lower-cost, faster-acting Chinese rivals, but Butterworth believes GKN can maintain its record of supplying components for 50 per cent of the world’s cars to 90 per cent of the world’s car makers.