Friedrichshafen, Germany – Automotive supplier ZF Friedrichshafen has secured a long-term contract with BMW Group to supply and further develop automatic transmissions for passenger vehicles, a deal valued in the “several billion euro” range. The agreement, extending into the late 2030s, underscores BMW’s continued commitment to internal combustion engine (ICE) technology alongside its electrification efforts, even as the broader automotive industry shifts towards electric vehicles.
The contract centers around ZF’s eight-speed automatic transmission (8HP), with a specific focus on optimizing it for hybrid and electric drivetrains. While the precise financial terms, production volumes and the ratio between conventional and electrified transmissions remain undisclosed, ZF emphasized the planning security the deal provides in a rapidly evolving market. “Together with BMW, we are sending a strong signal for innovation, efficiency, and sustainability in an industry undergoing dynamic change,” said Mathias Miedreich, CEO of ZF, in a company statement released on .
The agreement arrives at a critical juncture for ZF, which is currently undergoing a significant restructuring amid financial challenges stemming from past acquisitions and weakening demand from automakers. The company announced plans in early to cut up to 14,000 jobs in Germany by 2028, with thousands of positions already eliminated and others subject to reduced working hours. Division E, ZF’s Electrified Powertrain division, is particularly affected, with approximately 7,600 positions slated for reduction by 2030.
Despite the substantial BMW contract, ZF maintains that the restructuring plan will proceed as scheduled. The company reported revenue of roughly €41.4 billion in 2024, with 2025 financial results expected to be released on . The BMW deal, while a significant win for ZF’s E-Mobility division, does not alter the broader cost-cutting strategy. The contract is expected to benefit ZF’s Saarbrücken plant in Germany, where development and production will largely take place.
BMW’s decision to extend its reliance on the 8HP transmission reflects a deliberate strategy of “technological openness,” avoiding a firm commitment to an all-electric future. The company intends to continue offering vehicles with internal combustion engines for more than a decade, according to ZF. This contrasts with some automakers who have announced timelines for phasing out ICE vehicles entirely.
The long-term nature of the contract – extending into the late 2030s – provides ZF with crucial stability. “The new agreement with BMW shows how important long-term planning horizons are for technological advancements,” explained Sebastian Schmitt, Head of ZF’s Electrified Drive Technologies division. “It creates clarity and stability for both companies and enables us to align the next generation of the 8HP specifically toward efficiency, performance, and long-term viability.”
ZF currently employs around 161,600 people across 161 locations in 30 countries. The company manufactures the 8HP transmission in Saarbrücken (Germany), South Carolina (US), and Shanghai (China). The deal with BMW is the largest single order for ZF since 2019, offering a much-needed boost to the struggling supplier. However, the broader economic pressures facing the automotive industry, including high debt levels and fluctuating demand, continue to pose significant challenges for ZF and its workforce.
The agreement highlights the complex transition underway in the automotive sector. While the industry is undeniably moving towards electrification, demand for efficient and refined transmissions – particularly for hybrid vehicles – is expected to remain robust for the foreseeable future. BMW and ZF’s commitment to developing the 8HP transmission through the late 2030s underscores this reality, demonstrating that traditional powertrain technologies will continue to play a vital role in the automotive landscape for years to come.
