Garrett Motion Inc. introduced an oil‑free centrifugal compressor at the AHR Expo in Las Vegas, a product that can operate across a cooling range of 7 to 500 tons (25 to 1,750 kW). The compressor uses the company’s high‑speed electric motor and air‑foil bearing technology that was originally engineered for automotive turbochargers, allowing it to deliver high efficiency and low maintenance in commercial HVAC applications.
The launch marks a deliberate shift for Garrett, which has long dominated the automotive turbocharger market. By targeting the HVAC sector, the company aims to capture a share of the growing demand for energy‑efficient, low‑maintenance compressors in data‑center backup power, rooftop units and modular chillers. Management estimates that the new HVAC line could generate up to $1 billion in revenue outside the turbocharger business by 2030, a figure that underscores the strategic importance of this diversification.
Garrett’s partnership with Trane Technologies will embed the new compressor into Trane’s unitary rooftop units, modular chillers and large‑capacity chillers. Field testing and production are slated to begin in 2026, giving Garrett early access to Trane’s global distribution network and a platform to demonstrate the compressor’s ability to support ultra‑low global‑warming‑potential refrigerants. The collaboration positions Garrett as a preferred supplier for ultra‑efficient HVAC systems that meet tightening sustainability regulations.
Garrett’s most recent quarterly results, released in October 2025, showed revenue of $2.89 billion and earnings per share of $0.21, beating consensus estimates of $0.17 by $0.04 (a 24% beat). The revenue increase was driven by a 4% rise in the turbocharger segment, offset by a 2% decline in the automotive aftermarket. Operating margin expanded to 9.9% from 9.6% in the prior year, reflecting cost discipline and a favorable mix shift toward higher‑margin electric‑motor‑based products. The new HVAC line is expected to add a new revenue stream that will help sustain growth as the turbocharger market faces pricing pressure and supply‑chain constraints.
On the day of the announcement, Garrett’s stock dipped 1.15%. Analysts noted that the modest reaction was likely due to the market’s focus on the company’s recent earnings beat and its $250 million share‑repurchase program, rather than the strategic announcement itself. Investors appear to be weighing the long‑term upside of the HVAC venture against short‑term headwinds in the core turbocharger business.
Management remains optimistic about the outlook. CEO Olivier Rabiller emphasized that the HVAC compressor portfolio “will deliver unique value to system manufacturers and their customers” and is a key step toward the $1 billion revenue target. While the company acknowledges ongoing pricing volatility in the automotive sector, it cites strong demand for energy‑efficient HVAC solutions and the partnership with Trane as tailwinds that should offset short‑term challenges. The company’s guidance for 2026 maintains a revenue growth trajectory that reflects confidence in the HVAC market’s expansion and the scalability of its high‑speed motor technology.
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