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===== SIDA 1 =====

Annual Report 
2025
Saving More Lives

===== SIDA 2 =====

2
This is Autoliv
Year in Brief............................................... 04
CEO Message  .......................................... 06
Financial Summary  ................................... 10
Sustainability Highlights  ...........................  11
Autoliv Inside  ............................................ 12
New Safety Solutions Powering Growth .... 14
Important Launches  .................................. 16
Annual Report 
2025 
Training Center in Aguascalientes, Mexico
 Testlab in Bengaluru, India

===== SIDA 3 =====

3
Perform and Transform
Creating Growth  ........................................ 20
Driving Profitability  .................................... 22
Shareholder Value  .................................... 24
Automation and AI Solutions Driving
Productivity and Quality  ............................ 26
Asia a Major Growth Engine  ...................... 28
Board of Directors  .................................... 30
Executive Management Team  ................. 31
Locations and Capabilities  ....................... 32
Contacts and Calendar  ............................ 33
Multi- Year Summary ................................. 34
Form 10-K  ................................................ 35
FORWARD-LOOKING STATEMENTS
Except for historical information, matters discussed in the annual report are forward-looking statements and are based on management’s estimates, assumptions 
and projections. Actual results could vary materially . Please review the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and 
Results of Operations” sections in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025, and subsequent SEC filings, for  
factors that could affect the Company’s performance and cause results to differ materially from management’s expectations. The information in this report reflected 
management’s estimates, assumptions and projections as of January 30, 2026. Autoliv has not made updates since then and makes no representation, express 
or implied, that the information is still current or complete. The Company is under no obligation to update any part of this document. 
This report includes content supplied by S&P Global. Copyright © Light Vehicle Production Forecast, January 2026. All rights reserved.
Cover: Photographed in a major roundabout in central Brașov , Romania, this image represents the intersection of people, mobility , and safety , connecting the city 
center’s main traffic arteries.
Airbag production in Ogden, USA
Autoliv is the Official Automotive Safety  
Awareness Partner of ABB FIA Formula E

===== SIDA 4 =====

4
The World’s Leading  
Automotive Safety Supplier 
Our Vision
Saving  
More Lives
Our Mission
Providing World-Class  
Life-Saving Solutions for  
Mobility and Society
Autoliv is the clear worldwide leader in automotive safety 
systems. At Autoliv, we challenge and redefine the standards 
of mobility safety to sustainably deliver leading solutions. 
We supply protective systems, such as airbags, seatbelts, 
and steering wheels, for more than 1,400 vehicle models,  
delivering to all major vehicle manufacturers in the world.  
Autonomous driving, connected cars and electric vehicles  
are changing the automotive industry. Our superior global  
footprint and RD&E capabilities make us well-positioned  
to adapt to the new business opportunities this transforma -
tion brings. By leveraging our technological expertise and 
operational capabilities, we are also exploring new growth 
opportunities, such as safety for commercial vehicles and 
electrical safety solutions including pyro safety switches.
/ This is Autoliv

===== SIDA 5 =====

5
AMERICAS
32%
EUROPE
29%
ASIA
20%
CHINA
19%
Share of Global Sales 2025
$10.8b 
net sales
10.3% 
adj. operating margin*
44% 
market share
$1.2b 
operating cash flow
$589m 
shareholder returns
64,000 
associates worldwide
40,000
Our products saved approximately: 
lives
600,000
Our products reduced around:
injuries
Key Figures 2025
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC.

===== SIDA 6 =====

/ This is Autoliv
To succeed, we must  
perform and transform  
while delivering on  
today’s commitments and  
preparing for tomorrow’s  
opportunities”
6

===== SIDA 7 =====

Shaping a Safer ,  
Sustainable Future  
Together
We continued to navigate a rapidly evolving automotive 
landscape in 2025 with resilience and flexibility . Our teams 
delivered strong results by staying true to our priorities:  
customer centricity , operational excellence, and innovation, 
with dedication to quality in all respects. 
Our strategy is built on anticipating and leveraging op -
portunities that come with change. We collaborate closely 
with regulators, our customers, and research institutes to 
develop life-saving solutions to shape future standards.
Market development
In 2025, global Light Vehicle Production (LVP) returned to its
long-term growth trend with a 4% increase, exceeding ex -
pectations earlier in the year despite geopolitical challenges.
The automotive industry continued to evolve, particularly in
China, where Chinese vehicle brands expanded rapidly both
at home and in export markets. Rising incomes and stricter
regulations also fueled demand for advanced safety fea -
tures, exemplified by India, where safety content per vehicle 
grew by close to 20% in 2025.
According to S&P Global, the global automotive in -
dustry is projected to grow steadily through 2030 with LVP  
increasing about 1% annually on average to reach close to 95 
million units. Electrification will accelerate, with battery elec -
tric vehicles expected to represent almost a third of global LVP 
by 2030. Autonomous technologies are also set to expand  
rapidly , reshaping mobility and business models. At the 
same time, the industry is expected to continue its transition 
towards software-defined vehicle platforms, localized supply 
chains, and new revenue streams, driven by evolving con -
sumer preferences.
Financial performance and shareholder value creation
2025 was a strong year for Autoliv . We delivered solid organic
sales and improved profitability , despite tariffs and geopoliti-
cal challenges. Our ability to adapt quickly and stay close to 
our customers made a difference. Thanks to our close col -
laboration with customers, we successfully managed the im -
pact of new US tariffs and secured compensation for nearly
all related costs.
We’ve seen record sales and earnings, driven by success- 
ful product launches, cost reductions, and improved operatio- 
nal efficiency . Our adjusted operating margin* reached 10.3%, 
and our return on capital employed climbed to over 26%.
Our organic sales grew faster than LVP across all regions 
except China, where vehicles with lower safety content from 
Chinese Original Equipment Manufacturers (OEM) saw sig -
nificant growth. This is a segment where we traditionally have 
had a lower market share. Our investments in our Chinese op-
erations and engineering capabilities have led to many new 
customer partnerships and regulatory collaborations. Conse-
quently , our sales to Chinese OEMs increased by 23%, sur-
passing their LVP growth rate.
We continue to focus on shareholder returns. In 2025,  
operating cash flow set a new record, and we have continued 
to invest in the business while returning significant value to 
our shareholders.
We paid a dividend of $3.12 per share, an increase of 14% 
compared to the previous year , and repurchased shares for 
$351 million. During the year , to remain a shareholder friend-
ly company , we launched a new share repurchase program 
through the end of 2029, with the ambition of average annual 
share purchases of $300-500 million.
The automotive industry is rapidly transforming. Several trends are shaping the
industry such as autonomous technologies, electrification, advancement of safety  
ratings, and a growing emphasis on equity in safety . These developments reflect  
society’s growing demand for safer mobility as well as ongoing technical innovation.
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC.
7

===== SIDA 8 =====

These results reflect the strength of our team, our strategy 
and our strong execution as well as our commitment to val -
ue creation. We remain focused on delivering sustainable 
growth and maintaining a strong financial foundation.
Optimizing efficiency and quality across the value chain
In 2025, we made significant progress in strengthening our 
entire value chain by driving profitable and capital-efficient 
growth through end-to-end operational excellence. Our 
product development process is designed to ensure the 
highest quality and that every solution we deliver is robust, 
scalable, and seamlessly integrated into our customers’ sys -
tems. We’ve reduced variation through standardized work, 
enabling consistent, high-quality performance across our 
operations. This approach has helped us regain productivity 
momentum, with direct labor efficiency meeting our updated 
target of over 8% annually .
Automation and digitalization play a central role in this 
transformation. In 2025, we accelerated the deployment 
of flexible automation across our sites, including the rollout 
of modular airbag assembly lines. Digitalization is now fully  
embedded in our production system, supported by AI-driven  
inspection technologies that enhance quality and reduce var -
iability . Our teams are empowered with real-time feedback 
and smarter tools, enabling faster learning and better results.
Our global industrial footprint remains a competitive 
advantage. It gives us the flexibility to respond to regional 
sourcing shifts, inflationary pressures, and tariff impacts to
ensure we deliver value efficiently and consistently .
Growing need for safety innovations
During the year , we advanced smarter , more adaptive safety 
solutions and strengthened our role in shaping global safety 
standards.
Safety ratings and regulations are evolving across the 
globe to cover more real-life scenarios. These changes are 
increasing safety content per vehicle and driving demand 
for innovative solutions that meet stricter and more diverse  
requirements. 
We’ve accelerated our work in virtual testing, which 
is transforming how crash tests are evaluated. By using  
Human Body Models (HBM), we can simulate real-life crash 
scenarios with greater precision, accounting for diverse  
occupant sizes, seating positions, and restraint interactions. 
This approach is becoming a standard in global rating pro -
tocols and regulations, and Autoliv is actively engaged in 
shaping these frameworks. Virtual testing also offers greater  
possibilities to implement an increased number of evalua -
tions, which will also drive content growth.
Another example of our leadership in advancing safe -
ty regulations is our strategic partnership with CATARC,  
China’s leading automotive research and standards organ -
ization. This collaboration gives Autoliv the opportunity to 
support shaping how safety standards are set in China, the 
world’s largest automotive market. It allows us to raise vehi -
cle safety expectations in China, as well as support vehicle  
manufacturers as  they expand globally .
As the automotive industry evolves rapidly , our ability to  
develop world-leading safety technologies depends on 
Repurchased over 13 million shares  
in the past five years, corresponding  
to ~15% of outstanding shares
/ This is Autoliv
Shareholder Returns  
US$ (millions)
Share repurchase
0
100
200
300
400
500
600
700
800
20252024202320222021
Dividend
165
224
115
225
352
219
552
238
351
8

===== SIDA 9 =====

strong research and development capabilities. With 13 tech -
nical centers across the globe, Autoliv continues to invest in
expanding its innovation footprint. One example is the sec -
ond tech center currently under construction in China. This 
new facility will play a critical role in advancing automotive 
safety technologies. It will further support our growing part -
nerships with Chinese vehicle manufacturers, serving their 
needs both domestically and as they expand globally .
As autonomous driving and new interior concepts evolve, 
there is an increased demand for new innovative solutions. In 
response to this Autoliv , launched Omni Safety™, the world’s 
first proven safety solution for protecting occupants in re -
clined seating positions while driving.
Sustainability is integrated into everything we do
At Autoliv , sustainability is fundamental to our vision of Sav -
ing More Lives. It shapes our decisions and actions every 
day . Our sustainability framework is based on four focus ar -
eas with broad ambitions and near-term targets aligned with 
the UN Sustainable Development Goals and guided by the 
principles of the UN Global Compact.
When it comes to climate and circularity , we made signif -
icant progress during the year . Renewable electricity usage 
rose to 40% in 2025 and we signed two 12-year virtual power 
purchase Agreements in Europe. We continued our efforts to 
increase the amount of low carbon materials in Autoliv prod -
ucts, including recycled content, and to work with suppliers 
with capacity building programs on greenhouse gas emis -
sions tracking and target setting.
 
 
These actions support our long-term ambition: carbon neu -
trality in our own operations by 2030 and net-zero emissions 
across our supply chain by 2040.
Perform while transforming
As I look ahead, I am confident in our capability to deliver 
sustainable value through innovation, operational excel -
lence, and strong partnerships. Effective customer engage -
ment will continue to be at the heart of our approach, ensur -
ing we understand and anticipate the industry’s future needs. 
By accelerating growth initiatives and reducing product and 
process complexity , we will sharpen our competitive
edge while remaining agile in a rapidly evolving industry . 
Our leading position and strong performance in Asia, es -
pecially China and India, are instrumental to our continued 
progress. Together with our ability to improve profitability 
even in a low-growth environment, as shown in recent years, 
we have a solid foundation for continued attractive share -
holder returns and a clear path towards our 12% adjusted 
operating margin* target. 
To succeed, we must perform and transform while deliv -
ering on today’s commitments and preparing for tomorrow’s 
opportunities. I strongly believe in our shared purpose and 
determination. Through collaboration and collective effort by 
Team Autoliv , we are turning ambitions into achievements,  
always guided by our vision of Saving More Lives.
Mikael Bratt
President & CEO
Autoliv Inc.
Together with our ability to improve profitability even  
in a low-growth environment, as shown in recent years,  
we have a solid foundation for continued attractive  
shareholder returns and a clear path towards our 
12% adjusted operating margin* target”
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC.
9

===== SIDA 10 =====

Financial  
Summary
Autoliv achieved record operating income and operating 
cash flow , as a result of effective cost reductions and  
commercial recoveries, despite continued market  
headwinds from geopolitical challenges and volatile  
Light Vehicle Production (LVP).
• Record sales, driven by strong growth in India and with 
Chinese OEMs
• LVP increased by 4%, exceeding 90 million  for the 
first time since 2018
• Adjusted operating margin* improved by 60 bps   
Strong development due to productivity and  
structural cost saving activities, partly offset by tariffs 
that had a ~20 bps negative impact
• Record free operating cash flow * of $734 million   
and cash conversion* of 100%
• Record Earnings Per Share (EPS)  as a result of  
fewer outstanding shares and higher earning s. Adjust -
ed EPS* rose by 18% to $9.85
• Continued high shareholder returns.  Repurchased  
shares for $351 million and paid $238 million  in 
dividends
/ This is Autoliv
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC.
Adjusted Operating  
Profit & Margin*
US$ (millions) and in relation to  
sales %
0
200
400
600
800
1,000
1,200
20252024202320222021
0
2
4
6
8
10
12
Adjusted operating income
Adjusted operating margin
Sales and Global LVP
US$ (millions) and Units (millions)
0
2,000
4,000
6,000
8,000
10,000
20252024202320222021
15
35
55
75
95
Sales
LVP
Organic Growth*  
vs. LVP Change
Percentage points
0
2
4
6
8
20252024202320222021
Outperformance Gross profit
Gross margin
Gross Profit & Gross  
Margin 
US$ (millions) and in relation to  
sales %  
 
0
500
1,000
1,500
2,000
2,500
20252024202320222021
10
12
14
16
18
20
Return on Equity  
%
0
5
10
15
20
25
30
20252024202320222021
Operating Cash Flow  
& Cash Conversion * 
US$ (millions) and in %
Operating Cash Flow
Cash Conversion
Market Share by Market  
%
0
10
20
30
40
50
60
70
IndiaJapanChinaNorth 
America
Europe
Global average
500
600
700
800
900
1,000
1,100
20252024202320222021
0
50
100
150
200
250
300
Renault 4%
Hyundai 7%
 
Stellantis 10% 
Toyota 10%
VW 9% 
Honda 8% 
Ford 7% Nissan 5%
GM 5%
BMW 4%
Mercedes 5%
Geely 2%
Others 11%
Suzuki 2%
Subaru 2%
Other EV maker 4%
Volvo 2%
Great Wall Motor 2%
Mitsubishi 1%
Sales by Customer
%
10

===== SIDA 11 =====

Sustainability  
Highlights
Sustainability is integrated into everything we do and  
is an important driver for market differentiation and  
stakeholder value creation. In 2025, we made signifi -
cant progress on several key metrics and targets in  
our focus areas. Further information on our perfor -
mance is available in our 2025 Sustainability Report 
(to be published in March 2026). 
Copyright Autoliv Inc., All Rights Reserved Internal
Sustainability 
integrated into 
everything 
we do
Our commitment:
We make mobility safer for all by staying at the forefront of research, 
innovation and technology , with a relentless focus on quality .
Long-term ambition:
• 100,000 lives saved annually
Our commitment:
We provide a safe, healthy and inclusive workplace for all, respecting labor
rights and continuously enhancing the employee experience.
Long-term ambitions:
• Lowest Recordable Incident Rate among automotive suppliers
• Employee experience in the top quartile of the automotive industry
• Create positive social impact across our supply chain through
engagement and risk -based due diligence
Our commitment:
We support the industry’s green transition and minimize our own
environmental impact , focusing on greenhouse gas emissions 
reduction, resource efficiency and circularity .
Long-term ambitions:
• Carbon neutrality in own operations by  2030
• Net-zero emissions across the supply chain by 2040
Our commitment:
We do business in a responsible manner through strong corporate governance, 
and by fostering a culture of leading with integrity and speaking up.
Long-term ambitions:
• Leading with Integrity and Speaking Up fully embedded in our culture
• Compliance framework rooted in Autoliv’s strategy ,
shaping industry best practice
Saving More Lives A Safe and Inclusive Workplace
Climate and Circularity Business Integrity
Building a Sustainable Value Chain
Sustainability cuts across our entire value chain. Through risk -based human rights and environmental due diligence and close col laboration 
with suppliers and partners, we create shared value and mitigate negative social and environmental impacts.
Recordable incident rate
(Incidents per 200,000 hours worked)
0.23
2023 2024 2025
0.38
0.32
0.23
Share of renewable electricity
40%
2023 2024 2025
30%
23%
40%
100.5 99.7 93.8
2023 2024 2025
Energy intensity
(MWh per million USD)
93.8
In 2025, we revised our sustainability framework as part of Autoliv’s updated business strategy for 2026-2028, taking into account 
growing expectations and requirements from customers, investors and emerging legislation. 
358
2023
2024
2025
306
241 kton
Greenhouse gas emissions  
from own operations  
(Scope 1+2)
241
11

===== SIDA 12 =====

Based on our extensive research into real-life crashes, 
we develop and engineer automotive safety solutions to 
save more lives and prevent injuries on the roads.
/ This is Autoliv
Driver and
Passenger Airbag
Protect the driver and front  
passenger in frontal crashes
 Cyclist-Pedestrian 
Protection Airbag
Protects pedestrians  
or cyclists outside the  
vehicle in a collision
Center Airbag
Reduces head  
injuries in side-  
impact crashes
Active Hood Lifter
Raises the hood during  
a collision to help reduce  
injury to pedestrians
Knee Airbag
Deploys below the  
dashboard to protect  
knees in a crash
Pyro Safety Switch
Instantly cut a vehicle’s  
high-voltage power during  
a crash for safety
Products and Solutions  
Autoliv Inside
12

===== SIDA 13 =====

Airbags
Airbags are critical for reducing severe injuries in 
crashes, with driver airbags lowering fatalities in frontal 
collisions by approximately 25% (for belted drivers) 
and reducing serious head injuries by over 60%. Side 
curtain airbags reduce the head injuries by half, and 
side airbags reduce chest injuries by 25%. Autoliv 
offers a wide range of airbags for protecting not only 
passengers inside the vehicle but also people outside, 
such as cyclists and pedestrians.
Steering Wheels
The steering wheel is an integral part of the vehicle’s 
safety system. Modern steering wheels incorporate 
advanced electronics, sensors, and driver monitoring 
technologies, ensuring both control and protection. 
These systems are engineered to meet stringent 
safety standards while enabling seamless integration 
with automated driving features.
Seatbelts
Keep you  
safely restrained 
in your seat to 
prevent serious 
injury during  
a crash
Side Curtain
Airbags
Deploy along  
the windows to  
shield occupants’  
heads during a  
side impact 
Rear 
Curtain  
Airbag
Protects rear  
passengers’  
heads in a rear  
or side impact
Steering Wheel
Integrating controls  
of various vehicle  
functions along with  
the driver airbag
Belt in Seat
Integrated into the 
seat to improve 
comfort and crash  
protection
Side Airbags
Deploy from the  
seat or door to  
protect during a 
side-impa ct crash
Seatbelts
Seatbelts is the primary life-saving device and can 
reduce fatalities by as much as 45%. Today’s seat -
belt systems are highly sophisticated, with a variety 
of advanced functionalities such as pretensioners 
that tighten the seatbelt in the event of a collision. To 
further improve safety , pre-pretensioners tightens the 
seatbelt before a likely collision as a precaution.
13

===== SIDA 14 =====

New Safety  
Solutions  
Powering  
Growth
Autoliv’s core light vehicle products - seatbelts,  
airbags and steering wheels - remain the foundation  
for the company . To complement this strong base and 
support our future growth ambition, we are expanding  
our focus to meet safety needs in adjacent areas.
Autoliv’s Mobility Safety Solutions targets high-potential 
safety opportunities in other mobility forms, such as com -
mercial vehicles, motorcycles and bikes, as well as electri -
cal safety . We are also introducing advanced functionalities, 
initially for our light vehicle customers, such as seat-centric 
solutions, Human Body Models for virtual testing, and adap -
tive safety for personalized protection.
These innovations strengthen our position in next-  
generation mobility and autonomous driving. By expand -
ing our proven expertise into these emerging adjacencies,  
Autoliv aims to diversify its revenue streams. The markets 
for identified adjacent areas are expected to grow substan -
tially the coming decade.
Mobility Safety Solutions
Electrical safety solutions  
As electrification accelerates across mobility and society , 
electrical safety is becoming increasingly critical. Autoliv 
delivers fast-acting safety devices that cuts the high-voltage 
energy during crashes or electrical faults, preventing fires, 
short circuits, and electrical shocks. Our Pyro Safety Switch -
es and related solutions perform reliably under demanding 
conditions and are primarily used in electric vehicles, but we 
also supply them to industries outside the automotive sector . 
We are scaling this business by leveraging our industrial ca -
pabilities, safety expertise, and cost-efficient manufacturing 
to meet growing demand.
Commercial vehicle safety  
Commercial vehicles have distinct safety challenges due 
to their size and operating conditions. Autoliv meets these 
needs with customized solutions, including airbags, seat -
belts, steering wheels, and electrical safety components. 
Our technologies are tailored for trucks, buses, and off-  
highway vehicles.
 
Motorcycle and bike safety  
There is significant potential for growth in the market for  
motorcycle and bike safety solutions. Autoliv is committed  
to enhancing rider protection, focusing on the most severe 
injuries. We offer two complementary sets of solutions; 
On-Motorcycle Safety Solutions, such as integrated airbags,  
and On-Rider Safety Solutions, including airbag vests and 
jackets.
Components for safety solutions 
Autoliv’s component technologies extend our leadership in 
safety beyond traditional automotive applications. Building 
on decades of expertise, we deliver inflators, cushions and 
advanced pyrotechnic solutions, initiators, gas generators, 
and pyro-actuated mechanisms, that provide fast, compact, 
and reliable activation. Our component portfolio is a stra -
tegic enabler for growth. We primarily offer our products to 
the automotive industry , while also supporting various other  
industries.
 
/ This is Autoliv
14

===== SIDA 15 =====

New Functionalities  
and Products 
Safety for new flexible seating
Seat-centric solutions integrate restraint systems directly 
into the seat structure, enabling protection across a wide 
range of seating orientations, including reclined and rotated 
positions. Omni Safety™ exemplifies this approach by ad -
dressing risks in reclined seats through advanced seatbelt 
and airbag integration. These innovations provide greater 
interior design flexibility while ensuring superior occupant 
protection in autonomous and next-generation vehicles.
Virtual testing
Virtual testing uses advanced simulations to evaluate crash 
scenarios without physical prototypes. This approach accel -
erates development, reduces costs, and enables thousands 
of tests in a fraction of the time. From a safety perspective, 
virtual testing improves injury prediction accuracy , supports 
optimization of restraint systems for diverse occupants, and 
enables analysis of complex crash conditions that are diffi -
cult to replicate physically . As regulations and consumer rat -
ing programs increasingly adopt virtual methods, Autoliv is 
leading the way by leveraging new technology and predictive 
models to deliver safer vehicles and protect all road users.
Human Body Model Safety Suite
Autoliv’s Human Body Model (HBM) Safety Suite is an  
integrated virtual safety platform that combines a world-  
leading HBM with dedicated software tools to support the 
full virtual testing workflow , from simulation to analysis and 
decision-making. At its core, the HBM provides a detailed 
digital representation of human anatomy , en -
abling more precise injury prediction than 
physical crash dummies. Surrounding the 
model, the Safety Suite transforms com -
plex simulation data into clear , actionable 
insights, improving productivity , consistency , 
and confidence in virtual testing. By integrat -
ing validated models, software, and safety 
expertise into a single solution, Autoliv  
is helping customers meet evolv -
ing regulatory requirements 
while accelerating inno -
vation and setting new 
benchmarks for occu -
pant protection.
Adaptive safety
Adaptive safety systems go beyond standardized solutions 
by dynamically adjusting restraint performance to occupant 
characteristics, such as size, weight, and age, as well as 
seating position. Leveraging advanced sensing and algo -
rithms, these systems aim to deliver equality in occupant 
protection across diverse real-life conditions, enhancing 
safety for all demographics.
Cyclist-pedestrian protection airbag
Launched in 2025, Autoliv’s world-first cyclist-pedestrian 
protection airbag is designed to enhance the safety of those 
outside the vehicle. As the second generation of our pedes -
trian airbag, it covers a larger area to provide increased pro -
tection for cyclists in the event of a collision. Installed on the 
exterior of the vehicle, the airbag deploys in milliseconds, of -
fering improved head protection both for pedestrians and for 
cyclists whose head positions are higher .
Foldable steering wheel for autonomous driving
In collaboration with Tensor , a leading innovator in person -
al autonomous vehicles, Autoliv has developed the world’s 
first foldable steering wheel. It’s designed to meet the evolv -
ing needs for safety in autonomous vehicles. This innova -
tion enables traditional manual control when required and 
seamlessly retracts into the dashboard during autonomous 
driving. By merging safety , comfort, and design flexibility , the 
foldable steering wheel enhances the user experience by 
creating a more open and spacious cabin.
15

===== SIDA 16 =====

Important  
Launches  
2025
/ This is Autoliv
16
Autoliv has a long history of working with global vehicle manufacturers 
and maintains one of the industry’s broadest customer bases, spanning 
mass-market, premium, and new automotive brands. As technology  
reshapes the industry through connectivity, automation and safety, 
collaboration has become increasingly important. Today, Autoliv sup -
plies products and solutions to all major light vehicle manufacturers in 
the world. In 2025, we launched over 800 new products, supporting  
future growth.
Suzuki e VITARA
Renault 5
Honda Passport
KIA PV5
Changan Avatr 06
Ford Expedition
Deepal  S09
Chery Fengyun A9
Dacia Bigster
Honda Ye P7
Nio Onvo L90
Mercedes  CLA
16

===== SIDA 17 =====

17
Highway in Wuhan, China

===== SIDA 18 =====

[PLACEHOLDER]
Autoliv is committed to shaping the future of 
mobility safety through innovation, sustain -
ability , and operational excellence. We have 
reinforced our position as the global leader 
in automotive safety and deliver superior 
returns. Our strategy focuses on delivering 
long-term value for shareholders by driving 
profitable growth and resilience in a rapidly 
evolving industry .
By leveraging our leadership in airbags, seatbelts, and 
steering wheels, and expanding into advanced mobility 
safety solutions, we have positioned ourselves at the fore -
front of automotive safety innovation. 
We aim to achieve 4-6% average annual organic sales 
growth and to strengthen our margins through disciplined 
cost management, efficiency programs, and continuous  
 improvement initiatives. Financial discipline remains cen -
tral to our approach. We target strong cash conversion* of 
80% or more and maintain a conservative leverage ratio* of 
1.5x or below , ensuring flexibility and stability .
To enhance shareholder returns, we have launched 
a $2.5 billion share repurchase program running through 
2029 and increased our dividends, reflecting our confi -
dence in our growth trajectory .
We need to perform and transform to save more lives 
while creating sustainable value for all stakeholders.
On the following pages, we share how our strategy 
turns ambition into action  and how we are delivering on our  
targets and bringing our vision to life for a safer and sustain -
able future.
Perform and 
T ransform
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC. 
18

===== SIDA 19 =====

Road in NingBo, China
19

===== SIDA 20 =====

Creating Growth  
in a Dynamic Market
/ Perform and Transform
 
Content per Vehicle 
Growth
+1-2%
on average per year over time
Adjacent Growth 
Areas
+1-2%
 
Driving Growth Through
Mobility Safety Solutions 
• Electrical safety
• Commercial vehicles 
• Motorcycles and bikes
• Human Body Model/virtual engineering
Main Growth Drivers
• Crash test ratings and government  
regulations
• GDP per capita growth
• Consumer demand and technology  
advances, such as adaptive safety and  
autonomous driving  
Light Vehicle  
Production Growth
+1-2%
on average per year over time
What's Fueling the Growth
• Economic growth
• Consumer demand
• Ageing fleets
• Government incentives
• Product innovation
beyond 2030, on average per 
year over time
20

===== SIDA 21 =====

The model on these two pages shows Autoliv’s strategy to achieve an average annual organic 
sales growth of 4-6% over a 10+ year period. This will be driven by an increased standard of 
living, which will fuel growing demand for light vehicles and increased safety levels.
 
Growth Target
~ 4-6%
on average per year ,  
over a 10+ year period
Pyro Safety Switches
Electrical safety for EVs
20252015
Safety Content  
per Vehicle 
Increasing over time  
in all markets 
 US $ per vehicle
0
50
100
150
200
250
300
350
400
450
Average 2025: ~$268
$
North 
AmericaWestern Europe
Japan
Eastern Europe
China South 
America
India
Light Vehicle  
Production
Increased standard
of living leading to  
more light vehicles  
per capita
0
100
200
300
400
500
600
700
800
900
1,000
0
GDP per capita US$
China
US
/India
Indonesia
Brazil
Germany
Thailand
S. Korea
Japan
20,000 40,000 60,000 80,000 100,000
Vehicles per 1k people
21

===== SIDA 22 =====

Driving Profitability Across  
the Entire Value Chain
/ Perform and Transform
Cost- 
Efficient 
• Modularization
• Automation
• Quality
• Purchasing
Global Scale
Twice the size of  
closest competitor
Global  
Footprint
Manufacturing and  
Technology Centers  
supporting our customers  
in 25 countries serving  
more than 1,400 vehicle  
models for all major  
OEMs in the world
 
Automation  
and Digital  
Transformation
• To increase efficiency, quality, and safety  
across global operations
• We aim to create smart factories that are  
inreasingly agile and data-driven to support 
world-leading productivity gains
• Advances in smart and flexible automation  
technologies enable an increased pace of  
automation. This allows us to better leverage  
our scale advantage
• Reducing costs, time to market and physical  
testing through standardized virtual workflows
20252024202320222021
Old Target: >5%
3%
1%
4%
8%
9%
Updated Target: >8%
Direct Labor Productivity 
22

===== SIDA 23 =====

We continue to enhancing our operations by creating a more effective and cost-efficient  
structure. This is achieved through cost-efficient design, strategic purchasing, and operational  
excellence, driven by automation and digital transformation, supported by our global footprint, 
scale, and unwavering focus on quality.
Vertical  
Integration 
• Manage critical steps in the supply 
chain internally to ensures quality, 
reliability, and cost efficiency
• Deep vertical integration of critical 
components such as inflators and 
airbag cushions
• Increasing vertical integration of 
electronics for steering wheels  
and seatbelts
Strategic  
Purchasing
• Large-scale purchasing
• Best-cost country sourcing
• Continuous redesign for  
lower cost
• Supplier cost reduction  
commitment
Quality
• Zero-defect mindset, aiming for 
flawless execution in every process. 
This is key to securing profitability as 
well as new business wins
• As a result of our quality culture  
and processes, we have only been 
involved in  ~3% of passive safety 
recalls over the last ten years 
Q5 means quality in all dimensions  
– employees, processes, suppliers,  
products, and customers. 
Target
Adjusted  
Operating  
Margin*   
~12%
20252024202320222021
Purchasing Spend
100
~90
Index
Direct Material and Indirect 
Purchasing Savings
Suppliers
Products
Processes
Customers
Employees
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC. 
23

===== SIDA 24 =====

Driving  
Shareholder Value
 
Optimizing  
Balance Sheet
Autoliv consistently work to optimize its  
working capital. Since 2021 we have reduced  
trade working capital in relation to annulized  
quarterly sales from 16% to below 11%.
Trade Working Capital*
%
Unlocking Liquidity  
and Value
Autoliv’s operating cash flow has grown  
from around $750 million in 2021 to around 
$1.2 billion in 2025, underscoring how its 
strong earnings conversion and disciplined 
working capital management support  
shareholder returns.
Efficient Use of Assets
In 2025, Autoliv invested $420 million to  
expand its capacity and advance its safety 
technologies, reinforcing its long-term  
growth potential while maintaining strong  
free cash flow to support shareholder returns.
Operating Cash Flow
US$ (millions)
Capital Expenditures
US$ (millions)
0
5
10
15
20
20252024202320222021
0
200
400
600
800
1,000
1,200
1,400
2021 2022 2023 2024 2025
Capex, net Capex, net in relations to sales
0
100
200
300
400
500
600
2021 2022 2023 2024 2025
0%
1%
2%
3%
4%
5%
6%
/ Perform and Transform
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC. 
24

===== SIDA 25 =====

Autoliv optimizes its manufacturing and supply chain, reducing its working capital needs and  
improving its free operating cash flow, while driving innovations in safety solutions. These  
measures have resulted in higher asset returns and support long-term growth and shareholder 
value. Our capital allocation strategy aims at annual share repurchases of $300–$500 million 
through 2029, supported by an attractive and growing quarterly dividend.
     
Driving Value 
Through 
Efficient Capital 
Utilization
Autoliv’s strong return on
capital employed reflects our
ability to generate attractive
returns on invested capital,
signaling disciplined capital
allocation and sustained value
creation for shareholders.
Balanced  
Leverage  
Strategy
Autoliv has a long-term leverage  
ratio target of ≤1.5x. This balanced  
financial managements enables  
resilience, innovation, and  
sustained stakeholder value  
creation over time.
Shareholder Returns 
US$ (millions)
Leverage Ratio*
Net Debt /EBITDA
Cash Conversion*
%
Return on Capital  
Employed
%
Turning  
Profit into  
Cash
Autoliv consistently delivers
strong cash conversion,
turning a high proportion of its  
net income into free operating  
cash flow.
Target
0
20
40
60
80
100
2021
%
2022 2023 2024 2025
0.0
0.5
1.0
1.5
20252024202320222021
Long-term target ≤ 1.5x 
1.1x  
X
Share repurchase
0
100
200
300
400
500
600
700
800
20252024202320222021
Dividend
165 224
115
225
352
219
552
238
351
0
5
10
15
20
25
30
2021 2022 2023 2024 2025
Use of Cash
Our focused strategy to optimize 
the balance sheet and efficient 
use of assets supports strong 
cash flow that in turn can be 
used to fund both investments 
for growth and attractive share -
holder returns.
• Support long-term growth by  
investing in RD&E while keeping  
capital expenditures, net < 5% 
• Dividend – maintaining an attractive  
and growing dividend
• Share repurchases of around $300  
to $500 million annually through  
2029 under a mandate of up to  
$2.5 billion
*) Non-GAAP Performance Measures. See “Non-GAAP Performance Measures” section in the Form 10-K filed with the SEC. 
25

===== SIDA 26 =====

Automation and  
AI Solutions Driving  
Productivity and Quality
/ Perform and Transform
In 2025, Autoliv accelerated its digital 
transformation by increasingly scaling 
automation and AI solutions that  
deliver measurable value. Examples 
include AI-powered quality inspections,  
predictive analytics for supply chain 
management, and flexible automated 
assembly lines. These initiatives are 
continuing to reduce lead times, min -
imize non-quality costs and improve 
efficiency and product reliability across 
our global operations.
Our accelerated pace of automation and digitalization 
is expected to result in a higher annual contribution to 
labor productivity . As a result, we have raised our an -
nual labor productivity target from 5% to 8%. In both 
2024 and 2025, we exceeded this new productivity 
target.
A key driver of our progress in automation is our 
ability to capitalize on advances in automation tech -
nology , particularly the increased flexibility of modern 
systems. This flexibility allows us to design automated  
lines in-house and continuously refine and optimize 
them over time, delivering sustained productivity  
gains year after year .
These technological advancements also ena -
ble different products to share the same assembly 
line. This brings multiple benefits: higher utilization 
as customer volumes fluctuate, reduced floor-space 
requirements, and a lower capital cost per unit. Flex -
ible automated lines not only operate at a higher uti -
lization rate but also have a longer effective lifetime, 
strengthening the overall return on investment.
In effect, this transition towards more flexible au -
tomation shifts the cost structure from labor to capital 
costs. This creates an opportunity to further strength -
en our competitiveness, as Autoliv is more than twice 
as large as its closest competitor , and the potential 
for economies of scale lies in capital costs, not labor 
costs.
We prioritize scaling what works while exploring new 
technologies through controlled pilots with trusted part -
ners, ensuring every innovation is thoroughly validated 
before it is deployed across our plants globally .
One example is our airbag facility in Ogden, USA, 
where we aim to reduce the number of passenger  
airbag assembly lines by two-thirds through flexible 
automation, allowing different product variants to 
share an assembly line.
Another example is our ongoing project evaluating 
how humanoid robots can drive efficiency within our 
production processes, with current focus on improve -
ing productivity , quality and safety .
Automation and digitalization are more than ef -
ficiency tools, they are also integral to how we safe -
guard and enhance safety as well as quality . The 
way we combine advanced technology , including AI 
solutions, with human expertise is key for success -
ful automation with enhanced quality effects. Quality 
specialists stay closely involved by training, checking, 
and improving the automated solution.
26

===== SIDA 27 =====

Autoliv facility in Ogden, USA
27

===== SIDA 28 =====

/ Perform and Transform
Road in Bengaluru, India
28

===== SIDA 29 =====

Asia a Major  
Growth Engine
Over the past decade, Asia has seen 
substantial growth of its automotive 
industry , driven by expanding middle 
classes, rapid urbanization, and surging 
consumer demand – especially in  
China. The Asia region now produces 
more than half of the world’s light  
vehicles. Economic growth is driving not 
only vehicle production but also higher 
safety content per vehicle, as seen in 
India where rising incomes and stricter 
regulations are boosting demand for 
more safety features.
Accelerating sales in China through strategic part -
nerships and RD&E investments
Autoliv’s China growth strategy is built on our strong 
sales development performance with Chinese OEMs, 
strategic partnerships and joint ventures, and a grow -
ing innovation infrastructure. This positions Autoliv for 
sustained expansion in the world’s largest automotive 
market. In 2025, sales to Chinese OEMs soared by 
23%, significantly surpassing their LVP growth – driven 
by a wave of new product launches.
To support this growth, Autoliv is opening a state-
of-the-art tech center in Wuhan, China in 2026. The 
facility will drive next-generation innovations in oc -
cupant protection and system integration, reinforc -
ing Autoliv’s commitment to safety leadership and  
supporting our Chinese customers’ future success.  
Autoliv is also expanding its presence in China through 
partnerships with Chinese OEMs, industry organiza -
tions and key suppliers. In 2025, Autoliv and CATARC, 
the leading research institute for setting standards in 
China's automotive sector , signed a strategic agree -
ment to jointly advance automotive safety standards 
and innovation in China and beyond.
Autoliv’s strong foothold with leading Chinese ve -
hicle manufacturers is not only driving growth in China 
but also opening doors globally .  As Chinese automak-
ers accelerate their international expansion, Autoliv is 
winning new business by leveraging these deep part -
nerships and delivering world-class safety solutions 
wherever they go.
Leveraging India’s automotive boom and rising  
demand for safer vehicles
Autoliv is rapidly expanding its business in India,  
securing our market leadership. With safety content 
in vehicles increasing by around 20% annually for the 
past two years, driven by a regulatory focus and rising 
consumer demand for safety , India now represents 5% 
of Autoliv’s global sales, a more than doubling in just 
two years.
Autoliv India operates five manufacturing plants, a 
technical center , and a global virtual engineering hub, 
with more than 6,000 associates in total. To further 
strengthen its footprint, Autoliv recently opened a new 
inflator plant, the first in India, to meet growing demand 
for airbags from both Indian and other Asian vehicle 
manufacturers for the domestic market as well as for 
exports.
29

===== SIDA 30 =====

1. Jan Carlson 
Chairman since 2014.  
Director since 2007 .
2. Mikael Bratt
President and CEO of Autoliv Inc. 
Director since 2018.
3. Laurie Brlas
Director since 2020. Member of 
the Audit, Risk, and Compliance 
Committee and the Nominating 
and Corporate Governance 
Committee.
4. Leif Johansson  
Director since 2016. Chair of  
the Nominating and Corporate 
Governance Committee. Member 
of the Leadership Development 
and Compensation Committee.
5. Franz-Josef Kortüm 
Director since 2014. Member of 
the Nominating and Corporate 
Governance Committee.
6. Frédéric Lissalde
Director since 2020. Chair of 
the Leadership Development 
and Compensation Committee. 
Member of the Nominating and 
Corporate Governance Committee.
7 . Xiaozhi Liu 
Director since 2011. Member of 
the Leadership Development and 
Compensation Committee. 
8. Gustav Lundgren
Director since 2022. Member of 
the Audit, Risk, and Compliance 
Committee.
9. Martin Lundstedt
Director since 2021. Member of 
the Leadership Development and 
Compensation Committee.
10. Thaddeus “Ted” Senko  
Director since 2018. Chair of the 
Audit, Risk, and Compliance 
Committee. 
11. Adriana Karaboutis  
Director since 2024. Member of 
the Audit, Risk, and Compliance 
Committee.
Board  
of Directors
1 3
4
2
6 8
7
5
910
11
The Board of Directors, meeting in New York, USA
30

===== SIDA 31 =====

1. Mikael Bratt
President and CEO. 
2. Fredrik Westin*  
Executive Vice President,  
Finance and Chief  
Financial Officer .
3. Petra Albuschus  
Executive Vice President,
Human Resources & Sustainability .
4. Kevin Fox 
President, Autoliv Americas.
5. Magnus Jarlegren
President, Autoliv Europe.
6. Fabien Dumont
Executive Vice President,  
Chief Technology Officer .
7 . Jonas Jademyr 
Executive Vice President, Quality  
and Program Management. 
8. Colin Naughton  
President, Autoliv Asia. 
9. Anthony Nellis  
Executive Vice President,  
Legal Affairs; General  
Counsel & Secretary . 
10. Staffan Olsson
Executive Vice President,  
Operations. 
11. Christian Swahn
Executive Vice President,  
Supply Chain Management.
12. Sng Yih
President, Autoliv China.
Executive  
Management Team
Autoliv’s crash test center in South Korea is visited by the  
Executive Management Team, and in front of the team, a  
crash test dummy takes center stage.
*) Until March 31, 2026
1
9
6412
11
38
27 10 5
31

===== SIDA 32 =====

Locations and  
Capabilities
1) Defined as a best-cost country . 2) Includes weaving and sewing of textile cushions 
and seatbelt webbing, inflators, and components for airbag and seatbelt products. 
Location Tech Center
Production
Other2) Sales SupportEmployees
Headquartered in Stockholm, Sweden  
Incorporated in Delaware, United States
BRAZIL1) 1,300    
CANADA 512 
CHINA1) 8,470      
ESTONIA1) 725  
FRANCE 1,338    
GERMANY 402  
HUNGARY1) 1,472 
INDIA1) 6,140      
INDONESIA1) 181   
JAPAN 1,909     
MALAYSIA1)   
MEXICO1) 13,298     
PHILIPPINES1) 1,145 
POLAND1) 2,092   
ROMANIA1) 8,650      
SOUTH AFRICA1) 233  
SOUTH KOREA 468    
SPAIN 431  
SWEDEN 509   
SWITZERLAND 51 
THAILAND1) 4,289    
TUNISIA1) 4,524 
TURKEY1) 2,214     
USA 3,686    
VIETNAM 1) 171 
32

===== SIDA 33 =====

AUTOLIV , INC.
Visiting address:  
Klarabergsviadukten 70, Section D,  
5th Floor , Stockholm, Sweden  
Postal address: 
P.O. Box 70381, SE-107 24 Stockholm, Sweden  
Tel: +46 (0)8 587 20 600  
www .autoliv .com
CONTACT OUR BOARD  
Autoliv , Inc.
P.O. Box 70381, SE-107 24 Stockholm, Sweden 
Tel: +46 (0)8 587 20 600 
E-mail: legalaffairs@autoliv .com
The Board, individual directors and the committees 
of the Board can be contacted using the address 
above. Contact can be made anonymously and 
communication with individual directors is not  
screened. The relevant chair receives all such  
communication after it has been determined that 
the content contains a message to said chair .
STOCK TRANSFER AGENT AND REGISTRAR  
www .computershare.com
INVESTOR REQUESTS
Autoliv , Inc.,
P.O. Box 70381, SE-107 24, Stockholm, Sweden 
Tel: +46 (0)8 587 20 600 
E-mail: ir@autoliv .com  
2026 PRELIMINARY CALENDAR
April 17 , Financial Report Q1
May 7 , Annual Shareholders Meeting 
July 17 , Financial Report Q2 
October 23, Financial Report Q3
Concept and Design: PCG
Contacts and  
Calendar
33

===== SIDA 34 =====

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  _________  to _________
Commission file number: 001-12933
AUTOLIV, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0378542
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Klarabergsviadukten 70, Section D5,
Box 70381, SE-107 24
Stockholm, Sweden (Zip Code)
(Address of principal executive offices)
+46 8 587 20 600
(Registrant’stelephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Trading Symbol(s): Name of each exchange on which registered:
Common Stock (par value $1.00 per share) ALV New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.    Yes: ☒ No: ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files).    Yes: ☒ No: ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
company”in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’sassessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executiveofficers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes: ☐ No: ☒
The aggregate market value of the voting and non-voting common equity of Autoliv, Inc. held by non-affiliates as of the last business day of the second
fiscal quarter of 2025 amounted to $8,595 million.
Number of shares of Common Stock outstanding as of February 11, 2026: 74,706,513.
Auditor Firm Id: 1433                       Auditor Name: Ernst & Young AB                  Auditor Location: Stockholm, Sweden

===== SIDA 35 =====

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’sdefinitive Proxy Statement for the annual stockholders’meeting to be held on May 7, 2026, to be dated on or around March
25, 2026 (the “2026 ProxyStatement”),are incorporated by reference into Part III of this Annual Report on Form 10-K. The 2026 Proxy Statement will be
filed with the U.S. Securities and Exchange Commission within 120 days after December 31, 2025.

===== SIDA 36 =====

1
AUTOLIV, INC.
Index
PART I
Item 1. Business 3
Item 1A. Risk Factors 10
Item 1B. Unresolved Staff Comments 22
Item 1C. Cybersecurity 23
Item 2. Properties 25
Item 3. Legal Proceedings 28
Item 4. Mine Safety Disclosures 28
PART II
Item 5. Market for Registrant’sCommon Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29
Item 6. [Reserved]
Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations 31
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 51
Item 8. Financial Statements and Supplementary Data 53
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 89
Item 9A. Controls and Procedures 89
Item 9B. Other Information 90
PART III
Item 10. Directors, Executive Officers and Corporate Governance 91
Item 11. Executive Compensation 91
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 91
Item 13. Certain Relationships and Related Transactions, and Director Independence 91
Item 14. Principal Accountant Fees and Services 91
PART IV
Item 15. Exhibit and Financial Statement Schedules 92

===== SIDA 37 =====

2
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains statements that are not historical facts but rather forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities,
events or developments that Autoliv, Inc. (“Autoliv,” the “Company” or “we”)or its management believes or anticipates may occur in the
future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third
parties. Our expectations and assumptions are expressed in good faith and we believe there is a reasonable basis for them. However,
there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements
are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance
or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-
looking statements.
In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,”
“plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,”or the negative of these terms and other comparable
terminology, although not all forward-looking statements contain such words.
Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the
forward-looking statements for a variety of reasons, including without limitation: general global and regional economic conditions,
including the impact of inflation; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company
is a supplier; global supply chain disruptions, including port, transportation, and distribution delays or interruptions; supply chain
disruptions and component shortages specific to the automotive industry or the Company; potential changes to beneficial free trade
agreements and regulations, such as the United States-Mexico-Canada Agreement; changes in geopolitical and other economic and
political conditions or developments, including inflation, changes in trade policies, tariff regimes, and other developments in and by
countries in which we do business that could materially impact supply chains, margins, access to capital, or overall business
performance; political stability or geopolitical conflicts; changes in general industry or market conditions, including regional economic
growth or decline; changes in and the successful execution of our capacity alignment, restructuring, cost reduction, and efficiency
initiatives and the market reaction thereto; loss of business from increased competition; volatility or increases in raw material, fuel, and
energy costs; changes in consumer and customer preferences for end products; loss of customers or sales; legislative or regulatory
changes; customer bankruptcies, consolidations or restructuring or divestiture of customer brands; unfavorable fluctuations in
currencies or interest rates among the various jurisdictions in which we operate; market acceptance of our new products; costs or
difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing and other
negotiations with customers, including inflation and tariff compensations; successful integration of acquisitions and operations of joint
ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product
liability, warranty and recall claims and investigations and other litigation, civil judgments or financial penalties and customer reactions
thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work
stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims, and the availability of
insurance with respect to such matters; our ability to protect our intellectual property rights; negative impacts of antitrust investigations
or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments or results of tax
audits by governmental authorities and changes in our effective tax rate; dependence on key personnel; our ability to meet our
sustainability targets, goals and commitments; dependence on and relationships with customers and suppliers; the conditions
necessary to hit our financial targets; and other risks and uncertainties identified in Item 1A - “Risk Factors”of this Annual Report on
Form 10-K, Item 1A, and Item 7 - “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” in this
Annual Report.
For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-
looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or
revise any forward-looking statements in light of new information or future events, except as required by law.

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3
PART I
Item 1. Business
General
Autoliv, Inc. (“Autoliv”, the “Company” or “we”)is a Delaware corporation with its principal executive offices in Stockholm, Sweden
where it currently employs approximately 113 people. The Company functions as a holding corporation and owns two principal
subsidiaries, Autoliv AB and Autoliv ASP, Inc. The Company's fiscal year ends on December 31.
The Company is a leading developer, manufacturer, and supplier of passive safety systems to the automotive industry with a broad
range of product offerings.
Passive safety systems are primarily meant to improve safety for occupants in a vehicle. Passive safety systems include modules and
components for frontal-impact airbag protection systems, side-impact airbag protection systems, pedestrian protection systems,
steering wheels, inflator technologies, battery cut-off switches and seatbelts.
To expand its product offerings, the Company formed Mobility Safety Solutions. By combining its core competence and industry
experience, the Company also develops and manufactures mobility safety solutions such as passive safety systems for commercial
vehicles, battery cut-off switches, and safety solutions for riders of motorcycles and bikes.
The Company has 62 production facilities in 23 countries and its customers include the world’s largest car manufacturers. The
Company’s sales in 2025 were $10.8 billion, approximately 68% of which consisted of airbag and steering wheel products and
approximately 32% of which consisted of seatbelt products. The Company's business is conducted in the following geographical
regions: The Americas, Europe, China, and Asia, excluding China.
On December 31, 2025, the Company had approximately 64,300 personnel worldwide, with 10% being temporary personnel.
Additional information required by this Item 1 regarding developments in the Company’sbusiness during 2025 is contained under Item
7 in this Annual Report.
Reportable Segment
The Company has one reportable segment based on the way the Company evaluates its financial performance and manages its
operations. The Company's business is comprised of passive safety products – principally airbags (including steering wheels and
inflators) and seatbelts. For more information regarding the Company’ssegment reporting, see Note 1, Basis of Presentation, to the
Consolidated Financial Statements in this Annual Report.
Products, Market, and Competition
Products
Providing life-saving solutions is a key priority as the world population grows and develops. However, population expansion in growth
markets and the rise of megacities creates new complexities. To meet this challenge, the Company develops safety solutions for both
mobility and society that work in real life situations. The Company's passive safety systems such as seatbelts and airbags substantially
mitigate human consequences of traffic accidents.
The airbag module is designed to inflate extremely rapidly and then quickly deflate during a collision or impact. It consists of the
container, an airbag cushion, and an inflator. The purpose of the airbag is to provide the occupants a cushioning and restraint during a
crash event to prevent any impact or impact-caused injuries between the occupant and the interior of the vehicle.
Seatbelts can reduce the overall risk of serious injuries in frontal crashes by as much as 60% due to advanced seatbelt technologies
such as pretensioners and load limiters.
The Company also manufactures steering wheels that are crafted to ensure they meet safety requirements and are functional as well
as stylish.
Market and Competition
Consumer research clearly shows that consumers want safe vehicles, and several significant trends are likely to positively influence
overall safety content per vehicle. These include:
1) Society becoming increasingly focused on Vision Zero and its goal of reducing traffic fatalities and their associated costs;
2) Demographic trends of increased urbanization, aging driver populations, and increased safety focus in growth markets;
3) Evolving government regulations and test rating systems to improve the safety of vehicles in various markets, such as the
updated European New Car Assessment Program (Euro NCAP), China NCAP, and USNCAP; and
4) The trend towards autonomous vehicles may lead to roomier interiors that may require more advanced passive safety
systems.
The automotive passive safety market is driven by two primary factors: light vehicle production (LVP) and content per vehicle (CPV).

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4
The first growth driver, LVP, has increased at an average annual growth rate of around 1.9% since the start of Autoliv in 1997 despite
persistent headwinds in Europe and North America. According to S&P Global, LVP is forecasted to grow to close to 92 million by 2028
from just over 90 million in 2025, due to growing demand and export in medium- and low-income markets.
Unlike LVP, where Autoliv can only aim to be on the best-selling platforms, Autoliv can influence CPV more directly by continuously
developing and introducing new technologies with higher value-added features. Over the long term, this increases average safety CPV
and has caused the Company's markets to grow faster than the LVP.
Since 1997, the Company’ssales compound annual growth rate (CAGR) for passive safety has been around 5% compared to the
market rate of around 2.8% which includes an LVP growth of around 1.9%. The Company's outperformance is a result of a steady flow
of new passive safety technologies, strong focus on quality and a superior global footprint both in products and engineering. This has
enabled Autoliv to increase its global market share in passive safety from 27% in 1997 to around 44% in 2025.
In high-income markets (Western Europe, North America, Japan, and South Korea) the average CPV is around $350. CPV growth in
these regions mainly comes from new safety systems such as active seatbelts, knee airbags, and front-center airbags along with
improved protection for pedestrians and rear-seat occupants like bag-in-belt or more advanced seatbelts.
In medium- and low-income markets (all markets other than the high-income markets mentioned above), the Company sees great
opportunities for CPV growth from more airbags and advanced seatbelt products. The average CPV in these markets is around $210,
which is almost $140 less than in the high-income markets.
As a result of higher installation rates of airbags, more advanced seatbelt products, and more complex steering wheels, CPV is
expected to increase at a similar pace in both high-income and medium- and low-income markets over the next three years.
In the next three years, almost all LVP growth is expected to come in medium- and low-income regions with lower CPV, leading to a
dilution of the average global CPV. Despite this negative regional LVP mix effect, the annual passive safety market (seatbelts and
airbags, including steering wheels), is expected to grow from around $24 billion in 2025 to almost $26 billion over the next three years,
based on the current macro-economic outlook and the Company's internal market intelligence and estimates.
In seatbelts, Autoliv has a global market share of around 45%, primarily due to being the technology leader with several important
innovations such as pretensioners and active seatbelts. The Company's strong market position is also a reflection of its superior global
footprint. Seatbelts are the primary life-saving safety product globally and are also an important requirement in low-end vehicles in the
medium- and low-income markets. This provides the Company with an excellent opportunity to benefit from the expected growth in this
segment of the market.
Autoliv holds a leading position in both airbags and steering wheels, with a combined market shares of around 44%. The market for
airbags and steering wheels is expected to grow primarily due to increasing installation rates of inflatable curtains, side airbags, knee
airbags, and front ‑center airbags, as well as rising demand for higher ‑value steering wheels with leather and additional integrated
functions.
The Company's ability to consistently outperform market growth is rooted in a steady flow of new safety technologies, a strong focus on
quality, and a superior production and engineering footprint.
The Company's competitors
Autoliv is the clear market leader in passive safety components and systems for the automotive industry with an estimated global
market share of around 44%.
ZF AG, one of the Company's largest competitors, is a global leader in drive-line and chassis technology as well as in passive safety
technologies and is one of the largest global automotive suppliers.
Another large competitor is Joyson Safety Systems (JSS), a subsidiary of Ningbo Joyson Electronic Corp. JSS is the result of the
merger between Key Safety Systems (KSS) and Takata Corporation after KSS acquired Takata in 2018.
In Japan, Brazil, South Korea, and China, there are a number of local suppliers that have close ties with the domestic vehicle
manufacturers. For example, Toyota uses “keiretsu”(in-house) suppliers Tokai Rika for seatbelts and Toyoda Gosei for airbags and
steering wheels. These suppliers generally receive most of the Toyota business in Japan, in the same way, Mobis, a major supplier to
Hyundai/Kia in South Korea, generally receives a significant part of their business. Also BYD Auto., Ltd. (BYD) has a high degree of
vertical integration, with a large proportion of in-house sourcing of products and systems. This includes passive safety systems, which
is supplied by its subsidiary FinDreams Technology. Autoliv supplies components, especially inflators, to FinDreams Technology.
Other competitors include Nihon Plast and Ashimori in Japan, Yanfeng and Jinheng in China, Samsong in South Korea, and Chris
Cintos de Seguranca in South America. Collectively, these competitors account for the majority of the remaining market share in
passive safety.
Additional information concerning the Company's products, markets and competition is included in the “Risksand Risk Management”
section under Item 7 of this Annual Report.

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5
Manufacturing and Production
See “Item 2. Properties” for a description of Au toliv’sprincipal properties. The component factories manufacture inflators, propellant,
initiators, textile cushions, webbing, pressed steel parts, springs, and over molded steel parts used in seatbelt and airbag assembly and
steering wheels. The assembly factories source components from a number of parties, including Autoliv’sown component factories,
and assemble complete restraint systems for “just-in-time”delivery to customers. The products manufactured by Autoliv’s consolidated
subsidiaries in 2025 consisted of 143 million complete seatbelt systems (of which 100 million were fitted with pretensioners), 143 million
side airbags (including curtain airbags and front center airbags), 61 million frontal airbags and 21 million steering wheels.
Autoliv’s “just-in-time”delivery system is designed to accommodate the specific requirements of each customer for low levels of
inventory and rapid stock delivery service. “Just-in-time”deliveries require final assembly or, at least, distribution centers in geographic
areas close to customers to facilitate rapid delivery. The fact that the major automobile manufacturers are continually expanding their
production activities into more countries and require the same or similar safety systems as those produced in Europe, Japan, or the
U.S. increases the importance for suppliers to have assembly capacity in several countries. Consolidation among the Company's
customers also supports this trend.
Autoliv’sassembly operations generally are not constrained by capacity considerations unless there is a disruption in the supply of raw
materials and components. When dramatic shifts in LVP occur, Autoliv can generally adjust capacity in response to any changes in
demand within a few days by adding or removing work shifts and within a few months by adding or removing standardized production
and assembly lines. Most of Autoliv’sassembly factories can make sufficient space available to accommodate additional production
lines to satisfy foreseeable increases in capacity. As a result, Autoliv can usually adjust its manufacturing capacity faster than its
customers can adjust their capacity as a result of fluctuations in the general demand for vehicles or in the demand for a specific vehicle
model, provided that customers promptly notify Autoliv when they become aware of such changes in demand. However, these types of
adjustments can be costly and can impact Autoliv's operating margin.
When significant volatility in LVP occurs, as we saw in 2022 and 2023 due to supply disruptions, or when there is a shift in regional
LVP, the capacity adjustments can take more time and be more costly. During 2025 the volatility of LVP improved, although it is still
more volatile than prior to the COVID-19 pandemic. Additionally, when there is significant demand for a given product due to a major
recall of a competitor’sproduct, like certain of the Company's customers have experienced, capacity adjustments may take time.
The Company could experience disruption in its supply or delivery chain, which could cause one or more of its customers to halt or
delay production. For more information, see Item 1A – “Risk Factors”in this Annual Report.
Quality Management
Autoliv believes that superior quality is a prerequisite to being considered a leading global supplier of automotive safety systems and is
key to the Company's financial performance, because quality excellence is critical for winning new orders, preventing recalls, and
maintaining low scrap rates. Autoliv has for many years emphasized a “zero-defect”proactive quality policy and continues to strive to
improve its working methods. Autoliv’s products are expected to always meet performance expectations and be delivered to its
customers at the right times and in the right amounts. The Company believes its continued quality improvements further enhance the
Company's reputation among its customers, employees, and governmental authorities.
Although quality has always been paramount in the automotive industry, especially for safety products, automobile manufacturers have
become increasingly focused on quality with even less tolerance for any deviations. This intensified focus on quality is partially due to
an increase in the number of vehicle recalls for a variety of reasons (not just safety), including a few high-profile vehicle recalls. This
trend is likely to continue as automobile manufacturers introduce even stricter quality requirements and regulating agencies and other
authorities increase the level of scrutiny given to vehicle safety issues. The Company has not been immune to the recalls that have
been impacting the automotive industry.
The Company continues to drive its quality initiative called “Q5,”which was initiated in 2010. It is an integral part of the Company's
strategy of shaping a proactive quality culture of zero defects. It is called “Q5”because it addresses quality in five dimensions: products,
customers, growth, behavior, and suppliers. The goal of Q5 is to firmly tie together quality with value within all of the Company's
processes and for all of its employees, thereby leading to the best value for its customers. Since 2010, the Company has continually
focused on this quality initiative to provide additional skills training to more employees and suppliers. These activities have significantly
improved the Company's quality performance.
In the Company's pursuit of quality excellence, the Company developed a chain of four “defense lines”to deal with potential quality
issues. The defense lines are: 1) robust product designs, 2) flawless components from suppliers and the Company's own in-house
component companies, 3) manufacturing flawless products with a system for verifying that the Company's products conform with
specifications, and 4) an advanced traceability system in the event of a recall.
The Company's pursuit of quality excellence extends from the earliest phases of product development to the proper disposal of a
product following many years of use in a vehicle. Autoliv’scomprehensive Autoliv Product Development System (“APS”) includes
several key check points during the process of developing new products that are designed to ensure that such products are well-built
and have no hidden defects. Through this process, the Company works closely with its suppliers and customers to set clear standards
that help to ensure robust component design and lowest cost for function in order to proactively prevent problems and ensure the
Company delivers only the best designs to the market.

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6
The APS, based on the goals of improving quality and efficiency, is at the core of Autoliv’smanufacturing philosophy. APS integrates
essential quality elements, such as mistake proofing, statistical process control and operator involvement, into the manufacturing
processes so all Autoliv associates are aware of and understand the critical connection between themselves and the Company's
lifesaving products. This “zero-defect”principle extends beyond Autoliv to the entire supplier base. All of the Company's suppliers must
accept the strict quality standards in the global Autoliv Supplier Manual, which defines the Company's quality requirements and focuses
on preventing bad parts from being produced by its suppliers and helps eliminate defective intermediate products in the Company's
assembly lines as early as possible. In addition, Autoliv’sOne Product One Process (“1P1P”)initiative is its strategy for developing and
managing standardization of both core products and customer-specific features, leading not only to improved quality, but also greater
cost efficiency and more efficient supply chain management.
IATF 16949:2016 is one of the automotive industry’smost widely used international standards for quality management. All Autoliv
facilities that ship products to OEMs are regularly certified according to the International Automotive Task Force (IATF) standards.
Environmental and Safety Regulations
For information on how environmental and safety regulations impact the Company's business, see “Risk Factors – ‘Ourbusiness may
be adversely affected by laws or regulations, including environmental, occupational health and safety, and other governmental
regulations’, “Globalclimate change could negatively affect our business”, “Ourgoals, targets, and ambitions related to sustainability
and emissions reduction, and our public statements and disclosures regarding them, may, from time to time, result in additional
considerations or expectations and expose us to risks ” and “Ourbusiness may be adversely affected by changes in automotive safety
regulations or concerns that drive further regulation of the automobile safety market””in Item 1A and “Risksand Risk Management” in
Item 7 of this Annual Report.
Raw Materials
Direct material cost represents approximately 54% of the Company's net sales in 2025. The Company mainly purchases manufactured
components and raw materials for its operations. The Company takes several actions to manage the raw material fluctuations, such as
competitive sourcing and looking for alternative materials. The Company is also taking necessary actions to gradually implement raw
materials with a lower carbon emission footprint.
For information on the sources and availability of raw materials, see "Operational Risks - Component costs" in Item 7 and “Risk Factors
– Changes in the source, cost, availability of and regulations pertaining to raw materials and components may adversely affect our profit
margins”in Item 1A of this Annual Report.
Intellectual Property
The Company has developed a considerable amount of proprietary technology related to automotive safety systems and relies on many
patents to protect such technology. The Company's intellectual property plays an important role in maintaining its competitive position in
a number of the markets the Company serves. For information on the Company's use of intellectual property and its importance to the
Company, see “Risk Factors – If our patents are declared invalid or our technology infringes on the proprietary rights of others, our
ability to compete may be impaired”in Item 1A of this Annual Report.
Backlog
The Company has frame contracts with automobile manufacturers and such contracts are typically entered into up to three years before
the start of production of the relevant car model or platform and provide for a term covering the life of such car model or platform
including service parts after a vehicle model is no longer produced. These contracts, however, do not typically provide minimum
quantities, firm prices, or exclusivity but instead permit the automobile manufacturer to resource the relevant products at given intervals
(or at any time) from other suppliers. We sometimes refer to this backlog as our order intake or order book. For more information about
order intake see “Risk Factors – The cyclical nature of automotive sales and production can adversely affect our business, operating
results, and financial condition. Our business is directly related to LVP in the global market and by our customers, and automotive sales
and LVP are the most important drivers for our sales”in Item 1A of this Annual Report.

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Dependence on Customers
In 2025, the Company's top five customers represented around 44% of its consolidated net sales and the Company's top ten customers
represented around 70% of its consolidated net sales. This reflects the concentration of manufacturers in the automotive industry. In
2025 the Company's five largest customers accounted for around 40% of global LVP and the ten largest customers for around 56% of
global LVP. A delivery contract is typically for the lifetime of a vehicle model, which is normally between five and seven years depending
on customer platform sourcing preferences and strategies.
For information on the Company's dependence on customers, see “Risk Factors – Our business could be materially and adversely
affected if we lost any of our largest customers, lose business from any of our largest customers,  or if any of such customers are
unable to pay their invoices”in Item 1A of this Annual Report, and “Dependence on Customers”under the section “Strategic Risks” in
Item 7 of this Annual Report, and Note 21, Segment Information, to the Consolidated Financial Statements
Customer sales trends
Asian OEMs have steadily become increasingly important, mainly driven by growth with Japanese and Chinese OEMs. As a group
Asian OEMs represented around 48% of the Company's consolidated net sales in 2025, of which Japanese OEMs accounted for
almost two thirds. This is a result of the Company's stronger market position based on its local presence in Japan. As a group the
Chinese OEMs accounted for around 8% of the Company's consolidated net sales in 2025, with Geely representing more than 2% of
the Company's consolidated net sales. European based brands accounted for 30% of the Company's consolidated net sales in 2025.
The U.S. based OEMs (including Chrysler and new EV manufactures) accounted for 20% of the Company's global sales in 2025.
Globally,  the Company's strongest growing customers from 2024 to 2025 were Stellantis, followed by Suzuki, Toyota and Chery .
Research, Development and Engineering , net (R,D&E)
During 2025, gross expenditures for R,D&E amounted to $616 million compared to $612 million in 2024. Of these amounts, $202
million in 2025 and $214 million in 2024 were related to customer-funded engineering projects and crash tests reimbursed by the
customers. Net of this income, R,D&E expenditures in 2025 was $413 million compared to $398 million in 2024. Of the gross R,D&E
expense in 2025, 79% was for projects and programs where the Company has customer orders, typically related to vehicle models in
development. The remaining 21% was mainly for new innovations, products and standardizations that may yield benefits over time.
No single customer project accounted for more than 2% of Autoliv’stotal gross R,D&E spending during 2025. To support Autoliv’s
product portfolio, additional expertise is brought in-house via technology partnerships and licensing agreements.
Regulatory Costs
The fitting of seatbelts in most types of motor vehicles is mandatory in almost all countries and many countries have strict laws
regarding the use of seatbelts while in vehicles. In addition, most developed countries require that seats in intercity buses and
commercial vehicles be fitted with seatbelts. In the U.S., federal legislation requires frontal airbags on the driver-side and the
passenger-side of all new passenger cars, sport utility vehicles, pickup trucks, and vans.
For information concerning the material effects on the Company's business relating to its compliance with government safety
regulations, see “Risk Factors – ‘Ourbusiness may be adversely affected by laws or regulations, including environmental, occupational
health and safety, and other governmental regulations’ and ‘Ourbusiness may be adversely affected by changes in automotive safety
regulations or concerns that drive further regulation of the automobile safety market’”in Item 1A of this Annual Report and in Item 7
under the section “Risksand Risk Management”of this Annual Report.
Climate change
The Company is committed to operating its business in an environmentally sustainable manner, meaning developing and producing
products in a resource efficient way while limiting the Company's environmental impact in the most material areas of greenhouse gas
emissions, energy use, waste, and water. With particular emphasis on climate action, the Company actively engages with its
customers, suppliers, and others to drive sustainable mobility.
In June 2021, the Company launched an updated climate strategy including new long-term climate ambitions:
• Carbon neutrality in own operations by 2030, and
• Net-zero emissions across our supply chain by 2040
These industry-leading climate ambitions are aligned with a 1.5°C trajectory and should position the Company as the supplier of choice
for the most climate-focused customers, helping to ensure the Company's competitiveness now and in the future. In addition to these
ambitions, the Company adopted Science Based Targets (SBTs) for 2030 covering its own operations as well as the supply chain. The
targets were approved in January 2022 and are available at the SBTi website.
For more information about how climate change impacts the Company's business, see "Risk Factors – Global climate change could
negatively affect our business”in Item 1A of this Annual Report.

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8
Human Capital Management
The Company's drive for excellence is what makes Autoliv the world’sleading supplier of automotive safety systems. From the earliest
stages of product development to sales and design to the final delivery of the finished product, Autoliv's employees are driven by the
Company's mission to Save More Lives.
The successful execution of the Company's strategies relies on its ability to shape a quality and performance-oriented culture, and to
adapt quickly to sudden shifts in circumstances, such as supply chain disruptions and geopolitical instability. As the Company moves
forward, its workforce including both employees and temporary personnel, strives to respond with agility to new opportunities for growth
and improvement while delivering excellence to its customers. The Company builds a winning team by focusing on creating a work
environment that attracts, retains, and engages its employees.
The table below shows the Company's total workforce as of December 31, 2025, and 2024.
2025 2024
Total workforce 64,300 65,200
Whereof:
Direct workforce in manufacturing 47,300 48,000
Indirect workforce 17,000 17,200
Temporary workforce 10% 9%
Of the Company’stotal workforce as of December 31, 2025, 29% (2024: 30%) is located in the Americas, 22% (2024: 19%) in Asia
(excluding China), 14% (2024: 14%) in China, and 35% (2024: 37%) in Europe (including South Africa, Tunisia and Turkey).
Talent Attraction, Development, and Retention
The Company believes that attraction, development, and retention of talent is essential to its success. The Company offers an inclusive
work environment where its employees are challenged and achieve great things together. The Company seeks individuals who hold
varied experiences and viewpoints to create a workplace that allows each employee to do their best work and drive the Company's
collective success. The Company's workforce reflects the diversity of the countries and cultures in which it operates.
Supporting the development of the employees is essential in a highly competitive and rapidly changing environment. An important
cornerstone of each employee’sgrowth is the ongoing dialogue between the team member and manager, which is summarized during
an annual Performance and Development Dialogue (PDD). During the year, 100% of targeted employees conducted a PDD with their
managers. To provide opportunities for professional and personal growth of the employees, the Company has a multitude of
development channels, including technical and specialist career paths, international assignments, and other such programs.
The Company provides market-based competitive compensation through its salary, annual incentive, and long-term incentive programs
and benefits packages that promote employee well-being across all aspects of their lives.
Health and Safety
The Company is committed to providing a zero-injury work environment that promotes the health, safety, and welfare of its employees.
Autoliv’sproduction facilities implement the Company's health and safety management system, which drives continuous improvement
in health and safety, supported by the Company's leadership. Execution of the system is monitored through internal and external ISO
45001 occupational health and safety management system audits. At the end of 2025, 70% of the Company's production facilities were
certified to the ISO 45001 standard.
Labor Relations
The Company offers fair terms and conditions of employment. The Company's overall purpose, Code of Conduct, talent development
strategies, and employment policies support the principles in the United Nations Universal Declaration of Human Rights, and the
International Labor Organization’sFundamental Principles and Labor Standards.
The Company considers its relationship with its employees to be good. While there have been a small number of minor labor disputes
historically, such disputes have not had a significant or lasting impact on the Company's relationship with its employees, and customer
perception of its employee practices or its business results. Around 60% of the Company’sworkforce outside the United States is
covered by a collective bargaining agreement.
Major unions in Europe to which some of the Company's employees belong include: IG Metall in Germany; Unite the union in the United
Kingdom; Confédération Générale des Travailleurs (CGT), Confédération Française Démocratique du Travail (CFDT), Confédération
Française de l’Encadrement Confédération Générale des cadres (CFE-CGC), Force Ouvrière (FO), Confédération Française des
Travailleurs Chrétiens (CFTC), Solidaires, Unitaires, Démocratiques (SUD) and Conféderation Autonome du Travail (CAT) in France;
Union General de Trabajadores (UGT), Union Sindical Obrera (USO), Comisiones Obereras (CCOO) and Confederacion General de
Trabajadores (CGT) in Spain; IF Metall, Unionen, Sveriges Ingenjörer and Ledarna in Sweden; Industriaal- ja Metallitöötajate
Ametiühingute Liit (IMTAL) in Estonia; Vasas Szakszervezeti Szövetség (Hungarian Metallworkers‘ Federation) in Hungary;
Samorzadny NiezalezĪny Zwiazek Zawodowy Pracownikow and Zakladowa Organizacja Związkowa NSZZ Solidarnosc in Poland;
National Union of Metal Workers South Africa (NUMSA) in South Africa; Union Générale des Travailleurs Tunisiens (UGTT) and Union
des travailleurs Tunisians (UTT) in Tunisia, and Türk Metal Sendikasi in Turkey.

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9
In addition, the Company’s employees in other regions are represented by the following unions:   Unifor in Canada; Sindicato de
Jornaleros y Obreros Industriales y de la Industria Maquiladora de H. Matamoros, Tamaulipas (CTM); Sindicato Nacional de
Trabajadores de la Industria Metalúrgica y Similares, Federación Valle de Toluca; Sindicato Nacional “Nueva Cultura Laboral”
de Trabajadores de la Fabricación, Manufactura, Ensamble de Autopartes Mecánicas Eléctricas y Componentes de la Industria
Automotriz (CROC); Sindicato Nacional de Trabajadores de la Industria Arnesera, Eléctrica, Automotriz y Aeronáutica de la República
Mexicana; Sindicato Industrial de Trabajadores de la Transformación Construcción Automotriz Agropecuaria Plásticos y de la Industria
en General, del Comercio y Servicios Similares, Anexos y Conexos del Estado de Querétaro “Angel Castillo Reséndiz" and Sindicato
Nacional de Trabajadores de la Industria de Autopartes en General y/o Similares, Conexos y sus Servicios de la República Mexicana
(CTM) in Mexico; Sindicato dos Metalúrgicos de Taubaté e Região and Sindicato dos Trabalhadores nas Indústrias Metalúrgicas,
Mecânicas e de Material Elétrico de Pernambuco in Brazil; Autoliv India Employees Association, Bangalore & Mysore in India;   Quang
Yen Union  in Vietnam; Korean Metal Workers Union (FKTU) in South Korea; Autoliv Japan  Roudou Kumiai in Japan, and All-China
Federation of Trade Unions in China.
In many European countries, Canada, Mexico, Brazil and South Korea, wages, salaries and general working conditions are negotiated
with local unions and/or are subject to centrally negotiated collective bargaining agreements. The terms of the Company's various
agreements with unions typically range between one to three years. Some of the Company's subsidiaries in Europe, Canada, Mexico,
Brazil and South Korea must negotiate with the applicable local unions with respect to important changes in operations, working and
employment conditions. Twice a year, members of the Company’smanagement conduct a meeting with the European Works Council
(EWC) to provide employee representatives with important information about the Company and a forum for the exchange of ideas and
opinions. In many Asia Pacific countries, the central or regional governments provide guidance each year for salary adjustments or
statutory minimum wage for workers. The Company's employees may join associations in accordance with local legislation and rules,
although the level of unionization varies significantly throughout its operations.
Available Information
The Company files or furnishes with the United States Securities and Exchange Commission (the “SEC”)periodic reports and
amendments thereto, which include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy
statements, and other information. Such reports, amendments, proxy statements, and other information are made available free of
charge on the Company's corporate website at www.autoliv.com and are available as soon as reasonably practicable after they are
electronically filed with the SEC. The Company's Corporate Governance Guidelines, committee charters, code of conduct, and other
documents governing the Company are also available on its corporate website at www.autoliv.com. The SEC maintains an internet site
that contains reports, proxy statements and other information at www.sec.gov. Hard copies of the above-mentioned documents can be
obtained free of charge by contacting the Company at: Autoliv, Inc., P.O. Box 70381, SE-107 24, Stockholm, Sweden.

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Item 1A. Risk Factors
Our business, operating results, cash flows, and financial condition may be impacted by a number of factors. A discussion of the risks
associated with these material risk factors is included below.
RISKS RELATED TO OUR INDUSTRY
The cyclical nature of automotive sales and production can adversely affect our business, operating results, and financial
condition. Our business is directly related to LVP in the global market and by our customers, and automotive sales and LVP
are the most important drivers for our sales
Automotive sales and production are highly cyclical and can be affected by general or regional economic or industry conditions, the
level of consumer demand, recalls and other safety issues, labor relations issues, technological changes, fuel prices and availability,
vehicle safety regulations and other regulatory requirements, governmental initiatives, trade agreements, political volatility (especially in
energy producing countries and growth markets), changes in interest rate levels and credit availability, and other factors. Some regions
around the world may at various times be more particularly impacted by these factors than other regions. Economic declines that result
in a significant reduction in automotive sales and production by our customers have in the past had, and may in the future have, a
material adverse effect on our business, operating results, and financial condition. Our sales are also affected by the inventory levels of
our customers, which we cannot predict. Customers may choose to increase or reduce inventory levels at any time, and new inventory
levels may not align with historical trends. These fluctuations can add variability to customer call-offs, our production schedules, and
order intake, potentially impacting our revenues and financial condition. Uncertainty regarding inventory levels may be further impacted
by consumer financing programs initiated or terminated by our customers or governments, as such changes can influence the timing of
sales. Changes in automotive sales and LVP and/or customers’inventory levels will have an impact on our financial targets, earnings
guidance, and estimates. In addition, we base our growth projections in part on business awards, or order intake, made by our
customers. However, actual production orders from our customers may not approximate the awarded business or our estimated order
intake. Any significant reduction in automotive sales and/or LVP by our customers, whether due to general economic conditions or any
other factors relevant to sales or LVP, could have a material adverse effect on our business, operating results, and financial condition.
Growth rates in safety CPV, which can be impacted by changes in consumer trends, political decisions, crash test ratings and
safety regulations could affect our results in the future
We estimate that the average global content of passive safety systems per light vehicle in 2025 was close to $270. Vehicles produced
in different markets may have various passive safety content values. For example, in high-income markets, light vehicles have an
average passive safety content value of approximately $350 per vehicle, whereas in growth markets, such as China and India, the
average passive safety content value is approximately $210 and $140 per vehicle, respectively. Due to the concentration of the majority
of the growth in global LVP over time in growth markets, our operating results may be impacted if the passive safety CPV remains low
and if the penetration of automotive safety systems does not increase in these regions. As passive safety CPV is also an indicator of
our sales development, should these trends continue, the average value of passive safety systems per vehicle could decline.
We operate in a highly competitive market
The market for passive safety systems is highly competitive, and we face competition from a number of other companies that produce
and sell similar products. Among other factors, our products compete on the basis of price, quality, manufacturing and distribution
capability, design and performance, technological innovation, delivery, and service. Some of our competitors are subsidiaries (or
divisions, units or similar) of larger companies with greater financial and other resources than us. Some of our competitors may also
have “preferred status” as a result of special relationships or ownership interests with certain customers. Our ability to compete
successfully depends, in large part, on our success in continuing to innovate and manufacture products that have commercial success
with our customer and end-consumers, differentiating our products from those of our competitors, continuing to deliver quality products
in the time frames required by our customers, and maintaining best-cost production. We continue to invest in technology and
innovation, which we believe are critical to our long-term growth. Our ability to maintain and improve existing products, while
successfully developing and introducing distinctive new and enhanced products that anticipate changing customer and consumer
preferences and capitalize upon emerging technologies will be a significant factor in our ability to remain competitive. We may not be
able to effectively implement new technology-driven products and services or be successful in marketing such products and services. In
addition, our implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, may
have unintended consequences due to any limitations or failure to use them effectively. If we are unsuccessful or are less successful
than our competitors in predicting the course of market development, developing innovative products, processes, and/or use of
materials or adapting to new technologies or evolving regulatory, industry or customer requirements, we may be placed at a competitive
disadvantage. Given the competitive nature of our business, the number of awards we are awarded relative to our peers may decrease
over time and our past order intake is not an indicator of future levels or order intake. Additionally, OEMs rigorously evaluate our
products and performance against competitors on the basis of quality, reliability, cost-effectiveness, and the overall competitive
landscape. If any OEM customer determines that using a competitor's product would yield better financial results or would help maintain
supply chain resilience, it may result in loss in business and could affect our ability to be competitive and may decrease our current
market share. The inability to compete successfully could have a material adverse effect on our business, operating results, and
financial condition.
The discontinuation, lack of commercial success, or loss of business with respect to a particular vehicle model for which we
are a significant supplier could reduce our sales and harm our business
A number of our customer contracts generally require us to supply a customer’sannual requirements for a particular vehicle model and
assembly facilities, rather than to manufacture a specific quantity of products. Such contracts range from one year to the life of the
model, which is generally four to seven years. These contracts are often subject to renegotiation, sometimes as frequently as annually,
which may affect product pricing, and generally may be terminated by our customers at any time. Therefore, the discontinuation of, the

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loss of business with respect to, or a lack of commercial success of a particular vehicle model or brand for which we are a significant
supplier could reduce our sales and harm our business, operating results, cash flows, and financial condition.
We continue to expand our product offerings beyond light passenger vehicles to include other mobility safety solutions. If we
are not successful in expanding our product offerings, or if it takes longer or costs more than expected, it could harm our
business
We continue to expand our product offerings to focus on mobility safety solutions. Because mobility safety product offerings are still in
the development stages, it is difficult for us to anticipate the level of sales they may generate. The expansion of our product offering will
require us to invest time and resources to develop innovative products, such as wearables and two-wheeler passive safety products,
that keep pace with continuing changes in industry standards and to reach new customers who have rapidly changing preferences. Our
product offerings might not receive customer acceptance if customer preferences shift to other products, and our future success
depends in part on our ability to anticipate and respond to these changes. If we are not successful in expanding our product offerings or
if it takes longer or costs more than expected, it could negatively impact our operating results, financial condition, competitive position,
and future business prospects.
RISKS RELATED TO OUR BUSINESS
We may incur material losses and costs as a result of product liability, warranty, and recall claims that may be brought
against us or our customers
We face risks related to product liability claims, warranty claims, and recalls if any of our products are, or are alleged to be defective, fail
to perform as expected, or result, or are alleged to result, in bodily injury and/or property damage. We may not be able to anticipate all
potential performance or reliability issues that could arise after our products are released to the market. Additionally, increasing
regulations and reporting requirements regarding potentially defective products, particularly in the U.S., may increase the possibility that
we become involved in additional product liability or recall investigations or claims. See “–Risks Related to Government Regulations
and Taxes–Our business may be adversely affected by changes in automotive safety regulations or concerns that drive further
regulation of the automobile safety market”.
Although we currently carry product liability and product recall insurance in excess of our self-insured amounts, there can be no
assurance that such insurance will provide adequate coverage against potential claims, that such insurance will be available or
continue to be available in the appropriate markets, or that we will be able to obtain such insurance on acceptable terms in the future.
The cost of this insurance has risen in recent years and our self-insured amounts have increased as well. Although we have invested
and will continue to invest in our engineering, design, and quality infrastructure, we cannot give any assurance that our products will be
free suffer from defects or other deficiencies or that we will not experience material warranty claims or product recalls. In the future, we
could incur material warranty or product liability losses and significant costs to process and defend these claims. A successful claim
brought against us in excess of available insurance coverage, if any, or a requirement to participate in any product recall, could have a
material adverse effect on our operating results, cash flows, and financial condition.
Future recalls could result in costs not covered by insurance in excess of our self-insurance amounts, additional government inquiries,
litigation, reputational harm, and diversion of management’sattention. The main variables affecting recall costs include: the number of
vehicles ultimately determined to be affected, the cost per vehicle associated with the recall, the determination of proportionate
responsibility among the customer, us, and any relevant sub-suppliers, and actual insurance recoveries. Each vehicle manufacturer has
its own practices regarding product recalls and other product liability actions relating to its suppliers, and the performance and remedial
requirements vary between jurisdictions. Due to recall activity in the automotive industry over the past decade, some vehicle
manufacturers have become increasingly sensitive to recall risks. Government regulators have also become more focused on potential
recall risks and recall rates, as demonstrated by the U.S. National Highway Traffic Safety Administration's (“NHTSA”)investigation of
the ARC inflators. If NHTSA proceeds with any recalls of ARC inflators, such a recall could have a material impact on our business,
operating results, and financial condition. As suppliers become more integrally involved in the vehicle design process and assume more
of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with
recalls and product liability claims. Product recalls in our industry, even when they do not involve our products, can harm the
reputations of our customers, competitors, and us, particularly if those recalls cause consumers to question the safety or reliability of
products similar to ours. In addition, with global platforms and procedures, vehicle manufacturers are increasingly evaluating our quality
performance on a global basis; any one or more quality, warranty or other recall issue(s) (including issues affecting few units and/or
having a small financial impact) may cause a vehicle manufacturer to implement measures that may have a severe impact on our
operations, such as a global, temporary or prolonged suspension of new orders. In addition, as our products more frequently use global
designs and are based on or utilize the same or similar parts, components or solutions, there is a risk that the number of vehicles
affected globally by a failure or defect will increase significantly with a corresponding increase in our costs. A warranty, recall or product
liability claim brought against us in excess of available insurance may have a material adverse effect on our business. Vehicle
manufacturers are also increasingly requiring their suppliers to guarantee or warrant their products and bear repair and replacement
costs of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold us responsible for some or the entire
repair or replacement costs of defective products under new vehicle warranties when the product supplied did not perform as
represented. Accordingly, future warranty claims by our customers may be material. However, the final amounts determined to be due
could differ materially from our recorded warranty estimates, and our business, operating results, cash flows, and financial condition
may be materially impacted as a result. In addition, as we adopt new technologies, we face an inherent risk of exposure to the claims of
others that we have allegedly violated their intellectual property rights. We cannot assure you that we will not experience any material
warranty, product liability or intellectual property claim losses in the future, or that we will not incur significant costs to defend against
such claims. See “–Risks Related to Intellectual Property–If our patents are declared invalid or our technology infringes on the
proprietary rights of others, our ability to compete may be impaired”.

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Escalating pricing pressures from our customers may adversely affect our business
The automotive industry continues to experience aggressive pricing pressure from customers. This trend is partly attributable to the
major automobile manufacturers’strong purchasing power. As with other automotive component manufacturers, we are often expected
to quote fixed prices or are forced to accept prices with annual price reduction commitments for long-term sales arrangements or
discounted reimbursements for engineering work. Price reductions have impacted our sales and profit margins and are expected to
continue to do so in the future. While we in the past received inflation related pricing concessions from most of our customers, there is
no guarantee that this will occur in the future. Our future profitability will depend upon, among other things, our ability to continuously
reduce our cost per unit and maintain our cost structure, enabling us to remain cost-competitive. Our profitability is also influenced by
our success in designing and marketing technological improvements in automotive safety systems, which helps us offset price
reductions by our customers. If we are unable to offset continued price reductions through improved operating efficiencies and reduced
expenditures, these price reductions may have a material adverse effect on our business, operating results, cash flows, and financial
condition.
We could experience disruption in our supply or delivery chain, which could cause one or more of our customers to halt or
delay production
We, as with other component manufactures in the automotive industry, ship our products to customer vehicle assembly facilities
throughout the world on a “just-in-time”basis for our customers to maintain low inventory levels. Our suppliers (external suppliers as
well as our own production sites) use a similar method in providing raw materials to us. However, this “just-in-time”method makes the
logistics supply chain in our industry very complex and vulnerable to disruption. Disruptions in our supply chain may result for many
reasons, including closures of one of our own or one of our suppliers’facilities or critical manufacturing lines due to strikes or other
labor disputes, mechanical failures, electrical outages, fires, explosions, critical pollution levels, critical health and safety and other
working conditions issues (including epidemics and pandemics), natural disasters, war, geopolitical and economic instability, political
upheaval, as well as logistical complications due to labor disruptions, weather or natural disasters, acts of terrorism or violence,
mechanical failures, cybersecurity events, and legislation or regulation regarding the transport of hazardous goods. Inflation and pricing
pressures have also negatively impacted companies in our supply chain. Additionally, we may experience disruptions if there are newly
imposed trade restrictions or delays in customs processing, including if we are unable to obtain government authorization to export or
import certain materials, including materials that may be viewed as dangerous such as the propellant used for our inflators. See "–Risks
Related to Internal Operations–Tariffs, sanctions, and geopolitical conflicts may disrupt our multi-tier automotive supply chain, constrain
access to critical components, and adversely affect our production capabilities and financial performance." As we continue to expand in
growth markets, the risk of such disruptions is heightened. The unavailability of even a single small subcomponent necessary to
manufacture one of our products, for whatever reason, could force us to cease production of that product, possibly for a prolonged
period. Similarly, a potential quality issue could force us to halt deliveries while we validate the products. Even when products are ready
to be shipped, or have been shipped, delays may arise before they reach our customer. Also, similar difficulties for other suppliers may
force our customers to halt production, which may in turn impact our sales shipments to such customers. When we fail to deliver timely,
we may have to absorb our own costs for identifying and resolving the ultimate problem as well as expeditiously producing and shipping
replacement components or products. Generally, we must also carry the costs associated with “catching up,”such as overtime and
premium freight. If we are the cause of a customer being forced to halt production, the customer may seek to recoup all of its losses
and expenses from us. These losses and expenses could be very significant and may include consequential losses such as lost profits.
Where a customer halts production because of another supplier failing to deliver on time, we may not be fully compensated, if at all.
Thus, any such supply chain disruptions could severely impact our operations and/or those of our customers and force us to halt
production for prolonged periods of time which could expose us to material claims for compensation and have a material adverse effect
on our business, operating results, and financial condition.
Adverse developments affecting our suppliers could harm our profitability
Any significant disruption in our supplier relationships, particularly relationships with single-source suppliers, could harm our profitability.
Furthermore, some of our suppliers may not be able to sufficiently manage the currency commodity cost volatility and/or sharply
changing volumes while still performing as we expect. For example, recalls or field actions from our customers can stress the capacity
of our supply chain and may inhibit our ability to timely deliver order volumes. We may incur costs as we try to make contingency plans
to manage the risks for delivery delays, production delays, production issues or delivery of non-conforming products by our suppliers.
Changes in the source, cost, availability of and regulations pertaining to raw materials and components may adversely affect
our profit margins
Our business uses a broad range of raw materials and components in the manufacture of our products, nearly all of which are generally
available from a number of qualified suppliers. Our industry may be affected from time to time by limited supplies or price fluctuations of
certain key components and materials. Strong worldwide demand for certain raw materials has had a significant impact on prices and
short-term availability in recent years. Such price increases have materially increased, and could continue to materially increase, our
operating costs and materially and adversely affect our profit margins, as direct material costs amounted to approximately 54% of our
net sales in 2025, of which approximately half represents raw material costs. Commercial negotiations with our customers and suppliers
may not always offset all of the adverse impact of higher raw material, energy, labor, logistics, and commodity costs, including those
resulting from tariffs and trade restrictions (including retaliatory tariffs). These negotiations may also not be successful in the future.
Even where we are able to pass price increases on to our customers, there may be (i) a delay before we can do so, requiring us to
absorb the cost increase in the interim, and (ii) a negative impact on our relationships with such customers and suppliers, which may
limit our ability to secure future awards from customers and or obtain acceptable supplies from suppliers. In addition, no assurance can
be given that the magnitude or duration of current or  future cost increases will not have a larger adverse impact on our profitability or
consolidated financial position than currently anticipated. Furthermore, if raw material costs decrease, the price for our products may
also decrease, as such prices are often indexed to the raw material costs. Additionally, various government regulators require
companies that manufacture products containing certain minerals and their derivatives that are known as “conflict minerals”, originating
from the Democratic Republic of Congo or adjoining countries to perform due diligence and report the source of such materials. There
are significant resources associated with complying with these requirements, including diligence efforts to determine the sources of
conflict minerals used in our products and potential changes to our processes or supplies as a consequence of such diligence efforts.
As there may be only a limited number of suppliers able to offer certified “conflict free”conflict minerals, there can be no assurance that

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we will be able to obtain necessary conflict free minerals from such suppliers in sufficient quantities or at competitive prices. We may
face reputational challenges if we determine that certain of our products contain minerals not determined to be conflict free or if we are
unable to sufficiently verify the origins for all minerals used in our products through the procedures we may implement. Furthermore,
our customers are increasingly requiring us to track sustainable sources of certain raw materials, which also requires additional
diligence efforts and there can be no assurance that we will be able to obtain these materials in a cost-efficient and sustainable manner.
Accordingly, these rules and customer requirements may adversely affect our business, operating results, cash flows, and financial
condition.
Our business could be materially and adversely affected if we lose any of our largest customers, lose business from any of
our largest customers, or if any such customers are unable to pay their invoices
We are dependent on a few large customers with strong purchasing power. This is the result of customer consolidation in the last few
decades. In 2025, our top five customers represented around 44% of our consolidated sales, and our largest customer contract
accounted for around 2% of our consolidated sales. Although business with any given customer is typically split into several contracts
(either on the basis of one contract per vehicle model or on a broader platform basis), the loss of business from any of our major
customers (whether by lower overall demand for vehicles, cancellation of existing contracts or the failure to award us new business)
could have a material adverse effect on our business, operating results, and financial condition. Additionally, supply chain disruptions
experienced by our customers could result in, among others, decreased demand and production or aggressive renegotiation of supplier
contracts, all of which could have a material adverse effect on our business, operating results, and financial condition. Similarly, further
consolidation of our customers in the future could make us more reliant upon a smaller group of customers for a significant portion of
our consolidated sales and negatively impact our bargaining power when contracting with such customers. Customers may put us on a
“new business hold,”which would limit our ability to quote or be awarded all or part of their future vehicle contracts if quality or other
issues arise in the vehicles for which we were a supplier. This could have a significant negative impact on our order intake. Such new
business holds range in length and scope and are generally accompanied by a certain set of remedial conditions that must be met
before we are eligible to bid for new business. Meeting any such conditions within the prescribed timeframe may require additional
Company resources. A failure to satisfy any such conditions may have a material adverse impact on our operating results and financial
condition in the long term. There is a risk that one or more of our major customers may be unable to pay our invoices as they become
due or that a customer will simply refuse to make such payments given its financial difficulties. If a major customer enters into
bankruptcy proceedings or similar proceedings whereby contractual commitments are subject to stay of execution and the possibility of
legal or other modification, or if a major customer otherwise successfully procures protection against us legally enforcing its obligations,
it is likely, absent special relief such as having a “preferred status”, that we will be forced to record a substantial loss. Additional
information concerning our major customers is included in Note 21, Segment Information, to the Consolidated Financial Statements in
this Annual Report.
Our inability to effectively manage the timing, quality, and costs of new program launches could adversely affect our
business, operating results, cash flows, and financial condition
To compete effectively in the automotive supply industry, we must be able to launch new products that meet our customers’ timing,
performance, and quality standards. At times, we face an uneven number of launches, and some launches, for various reasons, may
have shortened launch lead times. We cannot provide assurance that we will be able to install and certify the equipment needed to
produce products for new programs in time for the start of production, or that transitioning our manufacturing facilities and resources to
full production for such new programs will not impact production rates or other operational efficiency measures at our facilities. In
addition, we cannot provide assurance that our customers will execute on schedule the launch of their new product programs, for which
we might supply products. As a Tier 1 supplier, we must effectively coordinate the activities of numerous suppliers in order to launch
programs successfully. Given the complexity of new program launches, particularly those involving new and innovative technologies,
we may experience difficulties managing product quality, timeliness and associated costs. In addition, new program launches require a
significant ramp-up of costs; however, sales related to these programs generally depend on the timing and success of new vehicle
introductions by our customers. Our inability to effectively manage the timing, quality and costs of these new program launches could
adversely affect our business, operating results, cash flows, and financial condition.
Changes in our product mix may impact our operating results and financial condition
We sell products that have varying profit margins. Our financial performance can be impacted depending on the mix of products we sell
during a given period. Our earnings guidance, estimates, and financial targets assume a certain product sales mix as well as a
geographic sales mix as many of the growth markets have a lower CPV. If actual results vary significantly from this projected product
and geographic mix of sales, our operating results and financial condition could be negatively impacted.
We are involved from time to time in legal proceedings and our business may suffer as a result of adverse outcomes of
current or future legal proceedings
We are, from time to time, involved in litigation, regulatory proceedings, and commercial or contractual disputes that may be significant.
These matters may include, without limitation, disputes with our suppliers and customers, intellectual property claims, shareholder
litigation, government investigations, class action lawsuits, personal injury claims, product liability claims, environmental issues,
antitrust, customs and VAT disputes, employment, and tax issues. In such matters, government agencies or private parties may seek to
recover from us very large, indeterminate amounts in penalties or monetary damages (including, in some cases, treble or punitive
damages) or seek to limit our operations in some way. The possibility exists that claims may be asserted against us and their
magnitude may remain unknown for long periods of time. For example, we are currently in the early stages of a dispute with the
Mexican tax authorities in relation to various issues dealing with certain manufacturing activities that occur in Mexico. An adverse result
in this or other similar disputes could have a materially negative impact on our operating results and financial condition. These types of
lawsuits could require a significant amount of management’stime and attention and a substantial legal liability or adverse regulatory
outcome and the substantial expenses to defend the litigation or regulatory proceedings may have a material adverse effect on our

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customer relationships, business prospects, reputation, operating results, cash flows, and financial condition. No assurances can be
given that such proceedings and claims will not have a material adverse impact on our profitability and consolidated financial position or
that our established reserves or our available insurance will mitigate such impact.
We are and may be in the future subject to civil antitrust litigation that could negatively impact our business
We have previously been the subject of an investigation by the European Commission (“EC”)regarding possible anti-competitive
behavior among certain suppliers to the automotive vehicle industry that was resolved in 2019. We are subject to a civil antitrust lawsuit
in Germany filed by a customer with respect to allegations over a decade ago and may be subject to such civil antitrust lawsuits in the
future in countries that permit such civil claims, including lawsuits or other actions by our customers. These types of lawsuits require
significant management time and attention and could result in significant expenses. Any unfavorable outcomes of such lawsuits could
have a material adverse impact on our customer relationships, business prospects, reputation, operating results, cash flows, and
financial condition, and our insurance may not mitigate such impact. See Note 19, Contingent Liabilities, to the Consolidated Financial
Statements in this Annual Report.
Work stoppages, slow-downs or other labor issues at our customers’facilities or at our facilities could adversely affect our
business, operating results, and financial condition
Because the automotive industry relies heavily on “just-in-time”delivery of components during the assembly and manufacture of
vehicles, a work stoppage or slow-down at one or more of our facilities could have a material adverse effect on our business. Similarly,
if any of our customers were to experience a work stoppage or slow-down, that customer may halt or limit the purchase of our products.
Similarly, a work stoppage or slow-down at another supplier could interrupt production at one of our customers’facilities which would
have the same effect. Furthermore, geopolitical instability or conflicts could displace workers or trigger the migration of workers, causing
labor shortages in critical areas, which could further disrupt operations. Labor shortages could also increase wages as multiple
companies and facilities compete for a shrinking pool of workers. While labor contract negotiations at our facilities historically have
rarely resulted in work stoppages, no assurances can be given that we will be able to negotiate acceptable contracts with these unions
or that our failure to do so will not result in work stoppages. A work stoppage or other labor disruption at one or more of our facilities or
our customers’ facilities could cause us to shut down production facilities supplying these products, which could have a material
adverse effect on our business, operating results, and financial condition.
Our ability to operate our company effectively could be impaired if we fail to attract and retain executive officers and other key
personnel
Our ability to operate our business and implement our strategies effectively depends, in part, on the efforts of our executive officers and
other key employees. Our future success will depend on, among other factors, our ability to attract, develop, and retain other qualified
personnel, particularly engineers and other employees with software and technical expertise. The loss of the services of any of our
executive officers or other key employees or the failure to attract, develop, or retain other qualified personnel could have a material
adverse effect on our business, operating results, and financial condition.
Restructuring, efficiency, and strategic initiatives and capacity alignments are complex and difficult and at any time additional
restructuring steps may be necessary, possibly on short notice and at significant cost
Our restructuring, efficiency, strategic initiatives and capacity alignments include efforts to adjust our manufacturing capacity, direct and
indirect labor workforce, and cost structure to meet current and projected operational and market requirements. These efforts include
plant closures, transferring sourcing to best-cost countries, consolidating our supplier base, and standardizing products to reduce
overhead costs and consolidate our operational centers. The successful implementation of our restructuring activities and capacity
alignments involves sourcing, logistics, technology, and employment arrangements. Because these restructuring, efficiency, and
strategic initiatives and capacity alignments can be complex, difficulties or delays in implementation may occur, or the initiatives and
capacity alignments may not be immediately effective, resulting in an adverse material impact on our performance. In addition, there is
a risk that inflation, high turnover rates, and increased competition may reduce the efficiencies currently available in best-cost countries
to levels that no longer allow for cost-beneficial restructuring opportunities. Therefore, there can be no assurances that any future
restructurings or capacity alignments will be completed as planned or will achieve the desired results. See Note 13, Restructuring, to
the Consolidated Financial Statements in this Annual Report.
A prolonged recession and/or a downturn in our industry could result in us having insufficient funds to continue our
operations and external financing may not be available to us or available only on materially different terms than what has
historically been available
Our ability to generate cash from our operations is highly dependent on automotive sales and LVP, the global economy, and the
economies of our important markets. If LVP were to remain on low levels for an extended period of time, we would experience a
significantly negative cash flow. Similarly, if cash losses resulting from customer defaults were to rise sharply, we would experience
negative cash flow. Such negative cash flow could result in our having insufficient funds to continue our operations unless we can
procure external financing, which may not be possible. Our access to debt, securitization, or derivative markets around the world at
competitive rates or in sufficient amounts could be affected by credit rating downgrades, market volatility, market disruption, regulatory
requirements, or other factors. Our ability to obtain unsecured funding at a reasonable cost is dependent on our credit ratings or our
perceived creditworthiness. Our current credit rating could be lowered as a result of us experiencing significant negative cash flows,
increasing our indebtedness and leverage, or a dire financial outlook, which may affect our ability to procure financing. We may also for
the same, or other reasons, find it difficult to secure new long-term credit facilities, at reasonable terms, when our principal credit facility
expires in 2029. Further, even our existing unutilized credit facilities may not be available to us as agreed, or only at additional cost, if
participating banks are unable to raise the necessary funds, where, for instance, financial markets are not functioning as expected or
one or more banks in our principal credit facility syndicate were to default. As a result, we cannot assure you that we will continue to

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have sufficient liquidity to meet our operating needs. In the event that we do not have sufficient external financing, we may be required
to seek additional capital, sell assets, reduce or cut back our operating activities or otherwise alter our business strategy. Information
concerning our credit facilities and other financings is included in Item 7 in this Annual Report in the section headed “Treasury
Activities”and in Note 15, Debt and Credit Agreements, to the Consolidated Financial Statements in this Annual Report.
Our indebtedness may harm our financial condition and operating results
As of December 31, 2025, we have outstanding debt of $2.2 billion. We may incur additional debt for a variety of reasons. Although our
significant credit facilities and debt agreements do not have any financial covenants, our level of indebtedness will have several
important effects on our future operations, including, without limitation: a portion of our cash flows from operations will be dedicated to
the payment of any interest or could be used for amortization required with respect to outstanding indebtedness; increases in our
outstanding indebtedness and leverage will increase our vulnerability to adverse changes in general economic and industry conditions,
as well as to competitive pressure; depending on the levels of our outstanding debt, our ability to obtain additional financing for working
capital, acquisitions, capital expenditures, general corporate and other purposes may be limited; and potential future tightening of the
availability of capital both from financial institutions and the debt markets may have an adverse effect on our ability to access additional
capital.
Governmental restrictions may impact our business adversely
Some of our customers are (or may be) owned by a governmental entity, receive various forms of governmental aid or support, or are
subject to governmental influence in other forms, which may impact us as a supplier to these customers. As a result, they may be
required to partner with local entities or procure components from local suppliers to achieve a specific local content or be subject to
other restrictions regarding localized content or ownership. The nature and form of any such restrictions or protections, whatever their
basis, is very difficult to predict as is their potential impact. However, they are likely to be based on political rather than economical or
operational considerations and may materially impact our business.
Impairment charges relating to our assets, goodwill and other intangible assets could adversely affect our financial
performance
We periodically review the carrying value of our assets, goodwill and other intangible assets for impairment indicators. If one or more of
our customers’ facilities cease production or decrease their production volumes, the assets we carry related to our facilities serving
such customers may decrease in value because we may no longer be able to utilize or realize them as intended. Where such
decreases are significant, such impairments may have a material adverse impact on our financial results. We monitor the various
factors that impact the valuation of our goodwill and other intangible assets, including expected future cash flow levels, global economic
conditions, market price for our stock, and trends with our customers. Impairment of goodwill and other identifiable intangible assets
may result from, among other things, deterioration in our performance and especially the cash flow performance of these goodwill
assets, adverse market conditions and adverse changes in applicable laws or regulations. If there are changes in these circumstances
or the other variables associated with the estimates, judgments and assumptions relating to the valuation of goodwill, when assessing
the valuation of our goodwill items, we may determine that it is appropriate to write down a portion of our goodwill or intangible assets
and record related non-cash impairment charges. In the event that we determine that we are required to write-down a portion of our
goodwill items and other intangible assets and thereby record related non-cash impairment charges, our operating results and financial
condition would be adversely affected.
We face risks related to our defined benefit pension plans and employee benefit plans, including the need for additional
funding as well as higher costs and liabilities
Our defined benefit pension plans and employee benefit plans may require additional funding or give rise to higher related costs and
liabilities which, in some circumstances, could reach material amounts and negatively affect our operating results. We are required to
make certain year-end assumptions regarding our pension plans. Our pension obligations are dependent on several factors, including
factors outside our control such as changes in interest rates, the market performance of the diversified investments underlying the
pension plans, actuarial data and adjustments and an increase in the minimum funding requirements or other regulatory changes
governing the plans. Adverse equity market conditions and volatility in the credit market may have an unfavorable impact on the value
of our pension assets and our future estimated pension liabilities. Internal factors such as an adjustment to the level of benefits
provided under the plans may also lead to an increase in our pension liability. If these or other internal and external risks were to occur,
alone or in combination, our required contributions to the plans and the costs and net liabilities associated with the plans could increase
substantially and have a material effect on our business. Information concerning our benefit plans is included in Note 20, Retirement
Plans, of the Consolidated Financial Statements in this Annual Report.
We may not be able to, or we may decide not to, pay dividends or repurchase shares at a level anticipated by our
shareholders, which could reduce shareholder returns
The extent to which we pay dividends on our common stock and repurchase our common stock in the future is at the discretion of our
Board of Directors and depends upon a number of factors, including our earnings, financial condition, cash and capital needs,
indebtedness and leverage, and general economic or business conditions. No assurance can be given that we will be able to or will
choose to pay any dividends or repurchase any shares in the foreseeable future.
Cybersecurity incidents or other damage to our technology infrastructure could disrupt business operations, result in the
loss of critical and confidential information, and adversely impact our reputation and operating results
We rely extensively on information technology (“IT”)networks and systems, and those of our third-party service providers, and our
global data centers and services provided over the internet to process, transmit and store electronic information, and to manage or
support a variety of business processes or activities across our facilities worldwide. The secure operation of our IT networks and
systems, and those of our third-party service providers, and the proper processing and maintenance of this information are critical to
our business operations. We have been, and likely will continue to be, subject to cyber-attacks. Although we seek to deploy
comprehensive security measures to prevent, detect, address and mitigate these threats, there has been an increased level of activity,

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and an associated level of sophistication, in cyber-attacks against large multinational companies. Threat actors, including nation state
attackers, could also use artificial intelligence for malicious purposes, increasing the frequency, velocity,  and complexity of their
attacks. The ever-evolving threats mean we and our third-party service providers and vendors must continually evaluate and adapt our
respective systems and processes and overall security environment, as well as those of any companies we acquire. There is no
guarantee that these measures will be fully implemented, complied with, or effective in safeguarding against all data security incidents,
system compromises or misuses of data. Our security measures may be compromised due to human or technological error, employee
malfeasance, system malfunctions or attacks from uncoordinated individuals or from organized threat actors groups using sophisticated
and targeted measures known as advanced persistent threats, directed at us, our products, our customers, our third-party service
providers, and/or other entities with whom we do business. Because techniques used to obtain unauthorized access or to sabotage
systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate
these techniques or to implement adequate preventative measures. Disruptions and attacks on our IT systems or the systems of third
parties storing our data, or employee malfeasance or human or technological error, could result in the unauthorized access,
misappropriation, loss, destruction or corruption of our critical data and confidential or proprietary information, personal information of
our employees, our customers’confidential information, and/or the improper use of our systems and networks, production downtimes
and both internal and external supply shortages, which could have a material adverse effect on our operating results. Such disruptions
or attacks may also result in the theft of intellectual property or other misappropriation of assets, or otherwise compromise our
confidential or proprietary information and materially disrupt our operations. The potential consequences of a material cybersecurity
incident include reputational damage, damaged customer relationships, loss of revenue, lower order intake in the future, theft of
intellectual property, litigation with third parties, diminution in the value of our investment in research, development and engineering,
diversion of the attention of management away from the operation of our business and increased cybersecurity protection and
remediation costs, legal claims and liability, regulatory scrutiny, sanctions, fines or penalties (which may not be covered by our
insurance policies), negative publicity, release of sensitive and/or confidential information, or increases in operating expenses, which in
turn could adversely affect our competitiveness and operating results. To the extent that any disruption or security incident results in an
unauthorized access, misappropriation, loss, destruction or corruption of our customer’sinformation, it could affect our relationships
with our customers, create significant expense for us to investigate and remediate any damage, lead to claims against us and ultimately
harm our business, strategy, result of operations, or financial condition. In addition, we may be required to incur significant costs to
protect against damage caused by these disruptions or security incidents in the future. In the event that our systems, or those of our
third-party service providers, are compromised or attacked, we may also suffer an outage, failure, or unavailability of data or information
technology systems, and interruptions to our business operations while such incident or attack is being remedied; this may impact data
or systems operated by us or by our third-party service providers. In addition, as the regulatory environment related to information
security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements
applicable to our business, compliance with those requirements could result in additional costs. Furthermore, our technology systems
and those of our third-party service providers are vulnerable to damage or interruption from natural disasters, power loss and
telecommunication failures. We continuously seek to maintain a robust program of information security and controls, however, any
future significant compromise of our data security, whether external or internal, or misuse of customer, associate, supplier or Company
data, could result in significant costs, lost sales, fines, lawsuits, and damage to our reputation.
Increasing reliance on artificial intelligence technologies exposes us to operational, cybersecurity, and intellectual property
risks
We increasingly utilize artificial intelligence (“AI”)and machine ‑learning technologies across various aspects of our manufacturing
operations, including quality assurance, predictive maintenance, production automation, and supply ‑chain planning. While these
technologies are intended to improve efficiency and reduce costs, their deployment introduces significant risks that could adversely
affect our business, operating results, and financial condition. AI systems depend on the availability of accurate, comprehensive, and
properly structured data. If the data underlying these systems is incomplete, inconsistent, or of poor quality, AI outputs may be
unreliable, resulting in inaccurate demand forecasts, flawed inventory or production decisions, or erroneous quality ‑control
assessments. Such outcomes could disrupt manufacturing, increase costs, and reduce our ability to fulfill customer requirements. Our
integration of AI with interconnected operational technology also increases our vulnerability to cybersecurity threats. AI ‑enabled
systems and Internet‑of‑Things (“IoT”)devices expand the potential attack surface for threat actors, and certain legacy equipment used
in our facilities may not have been designed with modern cybersecurity protections. A successful cyberattack on an AI-enabled system
could compromise sensitive data, disrupt production processes, damage equipment, or lead to extended downtime.  In addition, the use
of AI tools may require processing confidential and proprietary manufacturing data. If such data is improperly handled, stored, or
transmitted—especially through AI platforms that connect to external networks—there is a heightened risk of inadvertent disclosure or
theft of intellectual property, including proprietary production methods, equipment configurations, and process data. Such exposure
could erode our competitive advantages. If we fail to implement effective AI governance, risk ‑management protocols, cybersecurity
controls, or compliance processes, we may be unable to mitigate these risks adequately. Further, the legal and regulatory environment
relating to AI is uncertain and rapidly evolving, both in the U.S. and internationally, and includes regulatory schemes targeted
specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment, and other laws applicable to
the use of AI. These evolving laws and regulations could require changes in our implementation of AI technology and increase
compliance costs and the risk of non-compliance. Any of the foregoing risks, individually or in the aggregate, could materially and
adversely affect our operations, reputation, competitive position, and financial performance.
Third parties that maintain certain of our confidential and proprietary information could experience a cybersecurity incident
We rely on third parties to provide or maintain some of our IT systems, data centers and related services and do not exercise direct
control over these systems. Despite the implementation of security measures at third party locations, these IT systems, data centers
and cloud services are also vulnerable to security incidents or other disruptions. Additionally, we and certain of our third-party  service
providers collect and store personal information in connection with human resources operations and other aspects of our business.
While we obtain assurances that any third parties to whom we provide data will protect this information and, where we deem
appropriate, monitor the protections they employ, there remains a risk that the confidentiality and security of data held by us or by third
parties may be compromised, exposing us to liability.

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Global climate change could negatively affect our business
Public awareness and concern regarding global climate change may result in more regional and/or national requirements to reduce or
mitigate the effects of greenhouse gas emissions. In addition, our shareholders and customers may, to varying levels, expect us to
reduce our greenhouse gas emissions. Current and any future regulations aimed at mitigating climate change may negatively impact
the prices of raw materials and energy, which could impact demand for our products and adversely affect our operating results and
financial condition. The costs to comply with new or amended laws and violations of these laws, which may result in substantial fines
and penalties, remediation costs, third party damages, or a suspension or cessation of our operations, may be significant. The
manifestations of climate change, such as extreme weather conditions or more frequent extreme weather events, including wildfires,
flooding, water stress and extreme heat, could also disrupt our operations, damage our facilities, disrupt our supply chain, including our
customers or suppliers, impact the availability and cost of materials needed for manufacturing or increase insurance and other
operating costs. As a result, severe weather or a natural disaster that results in a prolonged disruption to our operations, or the
operations of our customers or suppliers, could have a material adverse effect on our business, operating results, cash flows and
financial condition.
Our goals, targets, and ambitions related to sustainability and emissions reduction, and our public statements and
disclosures regarding them, may, from time to time, result in additional considerations or expectations and expose us to risks
We have developed, and will continue to develop and set, goals, targets, ambitions and other objectives related to sustainability
matters, including our net-zero emission targets both for ourselves and our supply chain. Some of these are based on our internal
scenario analysis, which may not prove to be accurate and carries inherent uncertainties. Statements related to these goals, targets,
ambitions and objectives reflect our current plans and do not constitute a guarantee that they will be achieved. Our efforts to research,
establish, accomplish, and accurately report on these goals, targets, and objectives expose us to operational, reputational, financial,
legal, and other risks. Additionally, there can be no assurance that we will be able to secure pricing from our customers that reflects any
increased costs of developing and manufacturing sustainable products. If we are unable to recover these costs, our business, operating
results, cash flows, and financial condition may be adversely affected.
Greenhouse gas emissions, particular emissions that come from individuals and entities up and down the value chain (otherwise known
as Scope 3 emissions), are very difficult to estimate and our estimates may be materially different than actual emissions. The manner in
which we estimate and disclose Scope 3 emissions may differ from other companies and may be different than future regulatory
requirements, and currently, we do not include downstream Scope 3 emissions in our targets and ambitions. If future governmental
regulations require us to modify the basis of our Scope 3 emissions disclosure, our historically disclosed Scope 3 emissions may
change materially. Our ability to achieve any stated goal, target, ambition or objective, including with respect to emissions reduction, is
subject to numerous factors and conditions, some of which are outside of our control.
Our business may face increased interest from investors and other stakeholders related to our sustainability initiatives, including the
goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them. Failure or perceived failure to
pursue or fulfill such initiatives  could adversely affect our business or reputation, as well as expose us to government enforcement
actions and private litigation.
RISKS RELATED TO INTERNATIONAL OPERATIONS
Our business is exposed to risks inherent in international operations
We currently conduct operations in various countries and jurisdictions, including locating certain of our manufacturing and distribution
facilities internationally, which subjects us to the legal, political, regulatory and social requirements and economic conditions in these
jurisdictions. Some of these countries are considered growth markets and emerging markets. International sales and operations,
especially in growth markets, subject us to certain risks inherent in doing business abroad, including: exposure to local economic
conditions; unexpected changes in laws, regulations, trade, or monetary or fiscal policy, including interest rates, foreign currency
exchange rates, and changes in inflation rates; foreign tax consequences; inability to collect, or delays in collecting, value-added taxes
and/or other receivables associated with remittances and other payments by subsidiaries; exposure to local political turmoil and
challenging labor conditions; changes in general economic and political conditions in countries where we operate, particularly in
emerging markets; expropriation and nationalization; enforcing legal agreements or collecting receivables through foreign legal
systems; wage inflation; currency controls, including lack of liquidity in foreign currency due to governmental restrictions, trade
protection policies and currency controls, which may create difficulty in repatriating profits or making other remittances; compliance with
the requirements of an increasing body of applicable anti-bribery laws; reduced intellectual property protection in various markets;
investment restrictions or requirements; the imposition of tariffs and duties, and the burden of complying with a wide variety of
international and U.S. export control and economic sanctions laws. We are subject to taxation in the U.S. and numerous foreign
jurisdictions. The Organization for Economic Co-operation and Development (“OECD”)continues its base erosion and profit shifting
(“BEPS”)project begun in 2015 with new proposals for a global minimum tax, further development of a coordinated set of rules for
taxation and the allocation of taxing rights between jurisdictions. These proposals, if adopted by countries in which we operate, could
result in changes to tax policies, including transfer pricing policies, which could ultimately impact our tax liabilities.
Changes in tax laws or policies by the U.S. or foreign jurisdictions could result in a higher effective tax rate on our worldwide earnings,
and any such change could have a material adverse effect on our business , operating results, cash flows,  and financial condition.
Our international operations also depend upon trade relations between the countries where we manufacture and sell products and
those countries in which our customers and suppliers have operations. The current U.S. presidential administration has created
uncertainty about the relationships between the U.S. and certain of its trading partners, including with respect to the trade policies and
agreements, treaties, government regulations, and the tariffs that apply to trade between the U.S. and other nations. For example, in
2025 the U.S. administration imposed tariffs affecting imports to the U.S. from nearly every country by executive action adopted and
modified without predictable timelines, creating increased operational and financial exposure for companies dependent on cross-border
trade. Other countries, including China, responded with retaliatory tariffs or, like the European Union, announced it is considering
retaliatory tariffs. Changes in national policy, other governmental action related to tariffs or international trade agreements, changes in

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social, political regulatory, and economic conditions or in laws and policies governing foreign trade, manufacturing, development and
investment in the territories and countries where we currently manufacture and sell products, as well as any resulting negative
sentiments towards us as a result of such changes could depress economic activity, restrict our access to suppliers or customers, and
have a material adverse effect on our business, operating results, cash flows, and financial condition.
Increasing our manufacturing footprint in the growth markets and our business relationships with automotive manufacturers in these
markets are particularly important elements of our strategy. As a result, our exposure to the risks described above may be greater in the
future, and our exposure to risks associated with developing countries, such as the risk of political upheaval and reliability of local
infrastructure, may increase. It could also impact importing certain foreign-produced vehicles into the U.S. Changes in national policy or
continued uncertainty could depress economic activity and restrict our access to suppliers or customers and have a material adverse
effect on our business, operating results, cash flows, and financial condition. Additionally, trade restrictions or material increases in
tariffs could impact our targets, earnings guidance, and estimates. The ultimate impact of any tariffs, including any related responses,
are uncertain and will depend on various factors, including the timing of implementation, and the amount, scope, and nature of the
tariffs. Any or all of these actions could adversely affect our business, financial condition and cash flows.
Tariffs, sanctions, and geopolitical conflicts may disrupt our multi ‑tier automotive supply chain, constrain access to critical
components, and adversely affect our production capabilities and financial performance
Our operations rely on a geographically distributed, multi ‑tier supply chain structure that makes us acutely sensitive to shifts in global
trade policy, export ‑control regimes, and geopolitical conflict. Recent U.S. trade actions affecting imports from major automotive
manufacturing hubs—including broad, rapidly shifting tariff frameworks and sector ‑specific levies—have increased global cost volatility
and introduced uncertainty regarding long ‑term sourcing strategies. Wide ‑ranging tariff escalation across key trade partners has
reshaped global trade flows and imposed substantial cost burdens on manufacturers dependent on cross ‑border supply chains. Such
measures can directly affect our ability to procure components and precision ‑machined parts at competitive prices. These increased
input costs may not be fully recoverable through pricing, particularly under fixed‑price or lifetime‑pricing automotive supply agreements.
Semiconductor and sensor sourcing relies heavily on global electronics supply chains, which are increasingly affected by export
controls, entity
‑list restrictions, and sanctions targeting technology supply routes. Expanding U.S. and international restrictions on
transfers of semiconductors and related technologies—such as licensing requirements for chip exports to certain entities—have already
produced material disruptions and revenue impacts within the broader electronics ecosystem. If our Tier ‑1 or Tier‑2 suppliers lose
access to critical silicon or manufacturing equipment due to export controls or sanctions, we may face prolonged allocation constraints,
extended lead times, or forced redesigns. Military conflicts  routinely create systemic disruptions across global automotive supply
chains. They may block critical choke points, destabilize upstream manufacturing regions, or restrict access to raw materials such as
aluminum, nickel, palladium, and specialized production sourced from conflict ‑affected areas. A significant proportion of global
enterprises have experienced conflict ‑driven disruptions, with impacts concentrated in logistics paralysis, supplier instability, and
escalating compliance obligations.  State ‑based armed conflict is also identified as one of the most immediate global risks to supply
chain continuity, threatening transportation corridors, energy markets, and manufacturing hubs essential to the automotive sector. Many
of these geopolitical and regulatory shocks originate deep within Tier ‑2, Tier‑3, or Tier‑N suppliers of rare ‑earth magnets and critical
minerals. Because sub ‑tier suppliers are often located in high ‑risk regions or depend on fragile logistics networks,
disruptions—whether due to conflict, export controls, sanctions, or other regulatory actions—may propagate upstream before detection.
A substantial portion of global supply chain disruptions originate at these deeper tiers, underscoring the structural risk inherent in
automotive supply networks with limited transparency below Tier ‑1. Any combination of tariff escalation, sanctions, or military conflict
may: reduce availability of critical electronic and mechanical components; necessitate redesigns of products due to unavailable
semiconductors or restricted materials; increase logistics costs through rerouted shipments or loss of air/sea corridors; force production
slowdowns or stoppages at our facilities or those of our OEM customers; require emergency multi ‑sourcing, localized manufacturing
transitions, or new supplier qualifications that extend program timing. Because automotive supply contracts typically impose strict
delivery, quality, and cost ‑reduction obligations, disruptions of this nature could materially affect our business, operating results, cash
flows, and financial condition. We may also incur higher safety ‑stock requirements, expedited freight costs, or capital expenditures to
re‑engineer systems or tool new suppliers. As geopolitical conditions evolve, we cannot ensure that our mitigation strategies—including
dual sourcing, buffer inventories, and supplier diversification—will fully offset the operational and financial impacts of these events.
Significant changes in the United States Mexico Canada Agreement ("USMCA") could adversely affect our financial
performance
The U.S., Mexico and Canada entered into the USMCA, a successor to the North American Free Trade Agreement, effective as of July
1, 2020. The USMCA changed the automotive rules of origin that dictate what percentage of an automobile must be built from parts that
originated from countries in the USMCA territory. The rules require that at least 75% of parts be made in North America and that 40-
45% of an automobile must be made by workers earning at least $16 an hour. Reflective of the automotive industry, our vehicle parts
manufacturing facilities in the U.S., Mexico and Canada are highly dependent on duty-free trade amongst the U.S., Mexico, and
Canada. The criticality of USMCA eligibility of products involved in such trade has increased significantly as a result of the exemption
such eligibility currently affords from additional tariffs imposed against Canada and Mexico by executive orders in 2025. The USMCA is
undergoing a joint review in 2026. If the USMCA is terminated, or otherwise substantially amended, it could have a material adverse
impact on our financial performance. The imposition of customs duties on imports into the U.S., Mexico, or Canada could negatively
impact our financial performance.

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Our foreign operations may subject us to risks relating to laws governing international relations
Due to our global operations, we are subject to many laws governing international relations (including, but not limited to, the Foreign
Corrupt Practices Act, and other anti-bribery regulations in foreign jurisdictions where we do business), which prohibit improper
payments to government officials and restrict where and how we can do business, what information or products we can supply to
certain countries and what information we can provide to governmental authorities. We also export components and products that are
subject to certain U.S. trade regulations, including the U.S. Export Administration Regulations and various economic sanctions
programs administered by the U.S. Department of the Treasury’sOffice of Foreign Assets Control. Although we have procedures and
policies in place that should mitigate the risk of violating these laws, there is no guarantee that they will be sufficiently effective. If and
when we acquire new businesses, we may not be able to ensure that the pre-existing controls and procedures meant to prevent
violations of these laws were effective, and violations may occur if we are unable to timely implement corrective and effective controls
and procedures when integrating newly acquired businesses. Any allegations of noncompliance with these laws could harm our
reputation, divert management attention and result in significant expenses, and could therefore materially harm our business, operating
results, and financial condition.
Our business in Asia is subject to aggressive competition and is sensitive to economic, market, and political conditions
We operate in the automotive supply market throughout Asia including the highly competitive markets in China, South Korea, and India.
In each of these markets we face competition from both international and smaller domestic manufacturers. Due to the significance of
the Asian markets for our profit and growth, we are exposed to risks in China, South Korea, and India. We anticipate that additional
competitors, both international and domestic, may seek to enter the Chinese, South Korean, and/or Indian markets resulting in
increased competition. Increased competition may result in lower sales volumes, price reductions, reduced margins and our inability to
gain or hold market share. There have been periods of increased market volatility and moderation in the levels of economic growth in
China, which resulted in periods of lower automotive production growth rates in China than those previously experienced. Our business
in Asia is sensitive to economic and market conditions that drive automotive sales volumes in China, South Korea, and India and may
be impacted if there are reductions in vehicle demand in those markets. If we are unable to maintain our position in the Asian markets,
the pace of growth slows, or vehicle sales in these markets decrease, our business, operating results, and financial condition could be
materially adversely affected.
Global integration may result in additional risks
Because of our efforts to manage costs by integrating our operations globally, we face the additional risk that, should any of the other
risks discussed herein materialize, the negative effects could be more pronounced. For example, while supply delays of a component
have typically only affected a few customer vehicle models, such a delay could now affect several vehicle models of several customers
in several geographic areas. Similarly, any recall or warranty issue we face due to a product defect or failure is now more likely to
involve a larger number of units in several geographic areas.
Our business faces exchange rate risks
As a result of our global presence, a significant portion of our revenues and expenses are denominated in currencies other than the
U.S. dollar. We are therefore subject to foreign currency risks and foreign exchange exposure. Such risks and exposures include:
transaction exposure, which arises because the cost of a product originates in one currency and the product is sold in another currency;
revaluation effects, which arise from valuation of assets denominated in other currencies than the reporting currency of each unit;
translation exposure in the income statement, which arises when the income statements of non-U.S. subsidiaries are translated into
U.S. dollars; translation exposure in the balance sheet, which arises when the balance sheets of non-U.S. subsidiaries are translated
into U.S. dollars; and changes in the reported U.S. dollar amounts of cash flows. We cannot predict exchange rate volatility or the
extent of its impact on our future financial results. We typically denominate foreign transactions in foreign currencies to achieve a
natural hedge. However, a natural hedge cannot be achieved for all our currency flows; therefore, a net transaction exposure remains
within the group. The net exposure can be significant and creates a transaction exposure risk for us. We do not hedge translation
exposure. However, we do engage in foreign exchange rate hedging from time to time related to foreign currency transactions. For
additional information, see Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk - Currency risks.
RISKS RELATED TO ACQUISITIONS
We face risks in connection with acquisitions, joint ventures, partnerships, and other strategic transactions
Our growth has been enhanced through strategic transactions, including acquisitions of businesses, products and technologies,
partnerships, strategic alliances, and joint development agreements that we believe will complement our business. We regularly
evaluate acquisition opportunities, frequently engage in acquisition discussions, conduct due diligence activities in connection with
possible acquisitions, and, where appropriate, engage in acquisition negotiations. We may not be able to successfully identify suitable
acquisition and joint venture candidates or complete transactions on acceptable terms, integrate acquired operations into our existing
operations or expand into new markets. Our failure to identify suitable strategic transactions may restrict our ability to grow our
business. These strategic transactions also involve numerous additional risks to us and our investors, including: risks related to
retaining acquired management and employees; difficulties in integrating acquired technologies, products, operations, services and
personnel with our existing businesses; diversion of our management’s attention from other business concerns; assumption of
contingent liabilities; potential adverse financial impacts, including from the amortization of expenses related to intangible assets and
from potential impairment of goodwill; incurrence of indebtedness; and potential damage to existing customer relationships or lack of
customer acceptance or inability to attract new customers as a result of these transactions. In the future, we may pursue acquisitions of
businesses or products that are complementary to our business but for which we have historically had little or no direct experience.
These transactions can involve significant challenges and risks as well as significant time and resources that may divert management’s
attention from other business activities. If we fail to adequately manage these risks, the acquisitions and other strategic transactions
may not result in revenue growth, operational synergies or service or technology enhancements, which could adversely affect our
financial condition.

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