- Allison has made it increasingly clear that they have a future in electrified commercial vehicles, but now, some analysts are unhappy about the money ALSN is spending on R&D.
- Allison's vision of electrification includes the eGen Power integrated axle product, but also potentially more elaborate integrated systems for Class 6-7 trucks that could include batteries and inverters.
- Such systems could offer 3x to 10x content growth, but the margins on the eGen Power will almost certainly be lower, and possibly lower still on the comprehensive offerings.
- There is huge modeling uncertainty with Allison now, but I believe the shares still have some worthwhile longer-term potential, even though margin pressures limit near-term fair value.
For further details see:
Allison Transmission And The Ongoing EV Paradox