BAE Systems (LON: BA) and Eaton Boost EV Offerings for Trucks

BAE Systems and power management company Eaton have announced an expansion of their strategic partnership, under which they will develop enhanced electric vehicle (EV) systems for heavy-duty trucks. This move will intensify the companies’ efforts in supporting the transition to electrification in the medium- and heavy-duty commercial vehicle market.

The collaboration now extends to heavy-duty applications, enabling the delivery of a full line of electric drive systems for commercial trucks that exceed the weight threshold of 19 tons. This integrated approach combines BAE Systems' expertise in electric motors and power electronics with Eaton's proficiency in commercial vehicle transmissions. The core of the expanded solution pools BAE Systems' electric motor and power electronics with Eaton's heavy-duty 4-speed EV transmission.

The targeted applications for these systems span a range of heavy-duty commercial vehicles such as pick-up and delivery trucks, school and transit buses, and fleets involved in material handling, refuse collection, and regional haulage. The commercial sector's burgeoning demand for robust and reliable electric propulsion technologies has been a key driver in this initiative.

The power electronics supplied by BAE Systems are notable for their use of advanced material technology, leading to a compact and modular design that is not only more reliable due to fewer parts but also more adaptable across a range of vehicle platforms. Eaton complements this with its medium-duty (MD) and heavy-duty (HD) EV transmissions, specifically built to bolster the range, climbing capabilities, and acceleration of commercial electric vehicles.

Underscoring the extensive experience BAE Systems brings to the table, the company boasts over 16,000 propulsion systems currently in operation across the globe. These have cumulatively covered more than five billion miles, providing a solid track record of performance on a variety of low- and zero-emission vehicle platforms.

BAE shareholders have enjoyed a strong start to 2024, with gains of 23.03% putting the BA.L shares at the top end of performers. Despite this, analysts have yet to make adjustments in recent periods, and the consensus price target sits pretty close to the current mark (1398p against 1373p current). Moving further into ‘growth' areas usually does no harm to a firms prospects, and with a dividend offered, there could be scope for interest.

BAE share price ended today up by 0.92% to continue the positive trend.

As the demand for electric transportation solutions continues to grow, collaborations like that of BAE Systems and Eaton are crucial in fostering the development of technologies that address the unique needs of the commercial vehicle sector.

Both partners expect that their combined strengths will significantly contribute to the efficiency and flexibility required for widespread adoption of electric drive technologies in medium and heavy-duty trucks, ultimately supporting environmental goals and fueling the progress toward a more sustainable future for freight and passenger transport.