Garrett Motion (NASDAQ:GTX) used its Technology and Investor Day to outline a broader growth strategy centered on turbocharging, zero-emission mobility products and industrial applications, with management emphasizing that the company expects growth to come from both its legacy turbo business and newer technology platforms.
Olivier Rabiller, Garrett Motion’s director, president and CEO, said the company is targeting a revenue compound annual growth rate of about 5% over the next five and 10 years. He said Garrett now expects a higher revenue trajectory than it presented at its prior investor day in October 2023, citing slower-than-previously-expected battery electric vehicle adoption, increased demand for plug-in hybrids and range-extended vehicles, and rising power generation needs.
Management Says Turbo Business Remains Resilient
Garrett executives pushed back against the notion that turbocharging is a declining business. Rabiller said the company expects turbo revenue in 2035 to be higher than in 2025, while Mark Norton, director of engineering and new product introduction for motorsport and aftermarket, said Garrett sees the turbo industry benefiting from increased hybrid penetration and recovery in commercial vehicles.
Norton said Garrett now expects the industry to require 9 million more turbos per year by 2030 than the company forecast at the end of 2023. He said hybrid vehicles are a key driver because they are turbocharged and increasingly require higher-technology solutions, including variable nozzle turbine technology and e-boosting.
Norton also said Garrett’s diesel exposure has changed materially since the company’s 2018 spin-off, with most of the declining passenger diesel business now gone. The remaining diesel business is concentrated in light commercial vehicles, which he described as globally relevant, highly turbocharged and more resilient.
Industrial and Zero-Emission Products Target New Markets
Nils Martens, senior vice president of strategy, business development and advanced technologies, highlighted Garrett’s zero-emission portfolio, including high-speed E-Powertrains, fuel cell air compressors and E-Cooling compressors. He said the company has won multiple production awards across passenger vehicle and commercial vehicle applications, with products entering production in 2027.
Martens said Garrett expects more than $2 billion in sales from these zero-emission vehicle products by 2035. He said Garrett’s high-speed E-Powertrain uses an electric motor that spins twice as fast as the industry average, allowing for more power in a smaller package and lower material content, including reduced copper, aluminum, magnet and rare earth material use.
In industrial markets, Garrett said it expects more than $500 million in revenue by 2030 and $850 million by 2035. Martens said Garrett is already generating more than $100 million in industrial revenue in 2025, primarily through turbos used in industrial engines and generator sets.
The company also described its expansion into industrial HVAC cooling compressors and industrial air compressors. Martens said the HVAC product uses a centrifugal, oil-free design based on Garrett’s foil bearing technology and can deliver at least 10% higher energy efficiency than existing solutions. He said Garrett is working with Trane Technologies and Yutong in related cooling applications, including battery energy storage systems.
Martens also discussed Garrett’s recently announced work with Ingersoll Rand on industrial air compression. He said the product is designed to provide oil-free compressed air and can reduce energy use for air compression by 20% in manufacturing settings.
Technology Platform Emphasized as Competitive Advantage
Craig Balis, Garrett’s chief technology officer, said the company’s expansion is built on five core technology pillars: turbo compressors, oil-free foil bearings, high-speed electric motors, high-speed power electronics and advanced control software. He said Garrett has developed these capabilities organically over more than 15 years and has already industrialized them at scale.
Balis said Garrett uses more than 50 proprietary design, simulation and artificial intelligence tools to support product development. He said those tools allow the company to move faster and reuse core technology across different products, including fuel cell compressors, industrial air compressors and E-Cooling compressors.
Balis also said Garrett has more than 500 engineers working on electrical products and expects to keep research, development and engineering spending below 5% of revenue.
Financial Framework Includes Cash Flow and Shareholder Returns
Sean Deason, senior vice president and CFO, said Garrett expects its growth strategy to remain within its existing financial framework, with profitable growth and cash generation. He said the company continues to operate with a variable cost structure of more than 80% and capital expenditures of less than 3% of sales.
Deason said Garrett expects to generate more than $2 billion of free cash flow through 2030. He also said the company plans to continue returning 75% of adjusted free cash flow to shareholders through buybacks and dividends. Garrett has repurchased 44% of its shares since 2023, according to Deason, and is operating below 2 times net leverage.
During the question-and-answer session, Deason said the company could see margin expansion as its mix shifts, particularly as industrial revenue increases after 2030, though he said management remains cautious. Rabiller said the new product areas are expected to be at or accretive to the company’s current margin profile.
About Garrett Motion (NASDAQ:GTX)
Garrett Motion Inc is a technology leader specializing in the design, development and manufacture of turbocharging systems and related technologies for the global automotive industry. Its product portfolio includes conventional exhaust gas turbochargers, variable-geometry turbochargers, electric and e-boost turbochargers, as well as electronic actuators, sensors and thermal management systems. The company’s solutions are engineered to improve engine efficiency, reduce emissions and support automakers’ efforts to meet evolving regulatory standards for fuel economy and air quality.
Garrett Motion traces its roots to the founding of AiResearch by Cliff Garrett in 1936, a pioneer in aircraft and automotive turbocharging technologies.
