As tiremakers jockey for position in the North American EV tire market, the latest earnings results from Goodyear Tire & Rubber Co. provide a glimpse of what makes this corner of the market so attractive.
Goodyear’s original equipment tire sales were a bright spot for the tiremaker, which reported a loss of $101 million for the first quarter and a 7.1% drop in overall tire sales.
Chairman, CEO and President Rich Kramer told investors, “I feel better about our OE portfolio now than I have in a long time.”
He continued, “I think if you look at our mix right now, we’re trending much higher towards EV fitments across all our regions, and particularly in China, where the EV business is growing faster than probably any other region in the world.”
And those OE tires for EVs are sold at a premium.
“In that business, we have higher revenue as well as higher margin per tire on the EV fitments that we’re getting. So all that bodes well.”
How much higher is that revenue?
Christina Zamarro, executive vice president and chief financial officer, said in the first quarter “the revenue per tire on our OE wins for EV was more than double the revenue on ICE (internal combustion engine) fitments that we won.”
Zamarro said Goodyear’s EV gains in OE were driven by the “strong growth” in Asia Pacific and Europe, where the EV markets are growing faster and ahead of the U.S.
Overall, Goodyear said its revenue per tire was up 12% in the first quarter of 2023 compared to the year prior. And that increase came despite a 7.1% drop in tire units sold — 41.8 million units, down from 45 million units a year ago.
For the quarter, Goodyear’s OE units were up 8.2% — a gain of 0.8 million tires. But that wasn’t enough to overcome replacement tire unit volume which dropped by 4 million tires, or 11.2% year-over-year.
