Nexteer's Steer-by-Wire Crosses the Rubicon: First Production Launches Mark a New Era

Record revenue, rising margins, and the commercialization of Motion-by-Wire position Nexteer for long-term growth despite a turbulent auto market.

1316.HK · Earnings Call · 2026-08-12

A Strategic Inflection Point

Nexteer's first half of 2026 is more than just another record quarter—it marks the moment the company's long-brewing bet on Steer-by-Wire finally moved from development to production. As Robin Milavec noted on the call, “2026 marks an important milestone for our Steer-by-Wire commercialization. During the first half, we launched 2 Steer-by-Wire productions -- programs into production.” — Robin Milavec, Management/Executive · 2026-08-12 Those launches include a Level 4 Robotaxi application in North America and the world's first ASIL D certified full Steer-by-Wire system in a passenger vehicle in China. This is a significant validation of Nexteer's technological leadership and its ability to execute on complex, safety-critical systems. The company has been building toward this for years. In our prior conversation, Robin highlighted the evolution of the product portfolio: “We've been developing our Steer-by-Wire product for a number of years now, and we are beginning to see traction in the market, especially in the China market.” — Robin Milavec, CEO · 2026-03-24 That traction is now showing up in revenue and bookings. Nexteer secured $3.3 billion in new business awards in the first half, including another Steer-by-Wire award with a Chinese OEM and its first rack-based EPS program in Europe. The business awards are increasingly weighted toward premium and Motion-by-Wire technologies, which carry higher content per vehicle and should drive future top-line growth.

Financial Momentum Continues

The financial results reflect the same underlying strength. Revenue reached a record $2.3 billion, up 3.9% year-over-year, and adjusted EBITDA rose 14.1% to $263 million, expanding margins by 100 basis points to 11.3%. As Mike Bierlein put it, “We generated $109 million of free cash flow during the first half, demonstrating our focus on cash conversion of earnings and disciplined investments.” — Michael Bierlein, Management/Executive · 2026-08-12 This cash generation is particularly notable given the company's ongoing investments in new technologies and capacity. The company continues to grow above market, with adjusted revenue growth of 0.8% versus a market that declined, and it now expects to exceed its full-year booking target of $6 billion. The growth over market narrative is intact, even as management acknowledges that APAC pricing pressures and lower China production volumes held back the first-half growth over market to 180 basis points, slightly below the 200-300 basis point range.

We secured $3.3 billion of customer program bookings during the first 6 months of the year, including important wins in Steer-by-Wire and premium EPS applications.
Michael Bierlein, Management/Executive · 2026-08-12

Navigating Headwinds

Nexteer is not immune to the industry's challenges. The company is still negotiating recoveries from North American EV program cancellations, and it faces rising commodity costs. Mike Bierlein acknowledged the ongoing discussions: “We continue to discuss with our customers on various aspects. We did have for the second half of 2025, we had a net impact of $24 million, and that included some customer recovery of $5 million.” — Michael Bierlein, Chief Financial Officer · 2026-03-24 First-half profits were also dented by a temporary electrical outage at two Mexico plants, though insurance recovery is expected. Despite these headwinds, management sees continued margin expansion driven by operational efficiency, dual sourcing, and design-for-cost initiatives. The company's material cost management has improved, with material cost as a percentage of revenue declining year-over-year. And as Steer-by-Wire proliferates, Nexteer is positioning itself to benefit from the broader shift toward autonomous and electrified vehicles, both in China and globally. The second half is expected to see further Steer-by-Wire launches and continued above-market growth. With a strong balance sheet, net cash of $516 million, and a growing pipeline of next-generation products, Nexteer appears poised to deliver sustained value creation for shareholders.