The premature end to electric car projects is depressing the crisis Auto supplier ZF Friedrichshafen into the red. ZF has agreed with various customers to terminate several projects early that did not achieve the expected profitability due to the slower ramp-up of e-mobility, the company announced on Friday.
This decision will lead to a one-off charge and an accounting loss in 2025. A spokesman did not provide any specific information. The figures were already in the red in 2024. At that time the loss was just over a billion euros.
CFO Michael Frick (59) said that the step now frees ZF from legacy issues and “is the basis for new scope for action and sustainably improved profitability in the coming years.”
Operationally, the past financial year went better than expected, thanks to austerity measures. At significantly more than 4 percent, the adjusted profit margin is above the self-imposed range of 3 to 4 percent, it said, citing preliminary figures. At more than one billion euros, the cash inflow is around twice as high as expected. As a result, the debt level was reduced at the end of the year. ZF boss Mathias Miedreich said that this was cause for confidence. “Our measures to realign ZF are taking effect.”
The situation in Division E has improved
The group’s current problem child is Division E. The core division, which develops and produces combustion engines in addition to electric and hybrid drives, is at the center of the restructuring. The division’s operational development has improved significantly compared to the previous year and is in line with the plan of the restructuring program, which will be consistently continued in all its elements in 2026, the group also announced.
The company believes it is on the right track in its restructuring course. CEO Mathias Miedreich said the increased operational performance and the debt level, which was reduced faster than planned, gave cause for confidence.
At the beginning of October, management and employees reached an agreement an alliance that includes comprehensive austerity measures. These should lead to cost savings of more than 500 million euros by 2027. According to previous information, up to 14,000 jobs will be cut at ZF in Germany by the end of 2028. Thousands of jobs have already been lost. The working hours of many employees were also reduced.