German supplier ZF Friedrichshafen is treating China’s electric truck boom as a significant growth opportunity while adoption in Western markets lag behind, Chief Executive Mathias Miedreich told reporters on 9 September. Electric trucks already account for roughly 30% of China’s truck market, a share ZF now expects to climb toward 50% in the coming years; meanwhile, lagging infrastructure and limited incentives constrain European adoption, which remains in the low single digits. 

“Is the centre of gravity for electric-drive technology in China? The answer is clearly yes,” Miedreich said. “That’s where the action is and where the technology is being developed.” According to Andreas Moser, who heads up ZF’s commercial vehicle business, two of China’s three largest truckmakers are expected to present vehicles fitted with ZF electric powertrains at the upcoming IAA Transportation show in Hanover. The display, which will take place during the event scheduled 15-20 September, is another sign of Chinese OEMs turning their attention towards Europe. 

ZF has tempered expectations for China and anticipates that most of the trucks sold there will ultimately run on electric drives from domestic suppliers rather than its own. However, it has identified a clearer opportunity supporting Chinese manufacturers as they expand overseas, a relationship management says would lower costs for components it still produces in Germany and generate cash for its wider European operations. 

The company has taken a parallel approach on the passenger-vehicle side, securing project nominations from two Chinese automakers for its Coaxial eVD system, an 800 V drive unit delivering up to 300 kW and 5,000 Nm of torque. The supplier has also committed to localising research, production and supply chains inside China to keep pace with the market’s faster development cycles; like the rest of the Western automotive cohort, it too is chasing ‘China speed’.

Localisation increasingly extends to where ZF chooses to debut its most advanced technology. The company has begun premiering some of its most critical future components, including magnet-free electric motors and entirely fluid-free brake-by-wire systems, directly in Shanghai rather than in its native Germany. This might indicate where the supplier sees the bulk of demand for its most advanced engineering coming from.

Like the rest of German automotive, ZF is reckoning with a difficult financial backdrop. The supplier posted a €1bn (US$1.16bn) net loss in 2024 on sales down 11% to €41.4bn, and its debt pile has subsequently climbed to €10.5bn (US$11.6bn), largely the result of roughly US$20bn spent acquiring electric and software-defined vehicle capabilities. Refinancing costs on its recent bonds have risen to around 7%, up from around 2% in 2019. ZF took a further €1.6bn (US$1.9bn) charge in 2025 specifically to unwind an earlier, slower-than-expected bet on electric passenger-car drivetrains, terminating some programmes early.

The resulting restructuring campaign has been severe: ZF plans to cut up to 14,000 jobs in Germany by 2028, or roughly a quarter of its domestic workforce, and had already reduced its global headcount by more than 11,200 full-time positions as of mid-2025. Plans to sell or list its passive safety systems division covering airbags and seatbelts have stalled amid weak market conditions. 

There are early signs that the cuts are working: its first-half 2026 adjusted operating margin rose 0.7pts year-on-year to 5%, and the company has begun generating positive cash flow again through cost discipline and reduced research and capital spending. However, management continues to describe the broader European market as highly volatile and challenging.

There are also reasons for concern about ZF’s China-first calculation. The same OEMs it is now courting for revenue and faster development cycles are the same ones causing what Germany’s own auto association has called a structural crisis for ZF’s largest traditional clients. Volkswagen alone has confirmed 100,000 job cuts by 2030, and European car production capacity now exceeds demand by more than five million vehicles a year.

Whether ZF’s China strategy rescues or merely postpones its European reckoning is ultimately a gamble. Revenue and technological momentum gained by supplying Chinese players as they expand into Europe will need to offset the damage they do to ZF’s oldest customers once they arrive.