Aptiv (APTV) risk factors, FY2025 10-K

Aptiv's FY2025 10-K, filed Feb 06, 2026, lists 47 risk factors in 3 groups. Against the prior year's 40: 10 new, 3 dropped, 10 substantially reworded.

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Risk factors listed
473 groups
New this year
10vs 40 last year
Dropped
3since the prior 10-K
Substantially reworded
10of those kept
Section length
14k wordsItem 1A

What the changes say

  • Aptiv is spinning off its Electrical Distribution Systems business named Versigent.
  • Labor cost inflation in Mexico creates severe pressure to automate.
  • Global automotive markets show regional divergence with growth in China offsetting North American and European declines.

What changed since the prior 10-K

New

  • NewRisks Related to Business Environment and Economic Conditions

    A prolonged recession and/or a downturn in global automotive sales could adversely affect our business and cause us to require additional sources of financing to continue our operations, which may not be available to us or be available only on materially different terms than what has historically been available

    A prolonged global automotive downturn could restrict our financing availability and materially harm our financial condition.

  • NewRisks Related to Business Environment and Economic Conditions

    Our inability to effectively manage the timing, quality and costs of new program launches could adversely affect our financial performance

    Delays or quality failures in launching complex new customer programs could trigger commercial or litigation claims against us.

  • NewRisks Related to Business Environment and Economic Conditions

    The discontinuation or loss of business, or lack of commercial success with respect to a particular product for which we are a significant supplier could reduce our sales and harm our profitability

    OEM customers might in-source components or discontinue vehicle models, reducing sales of our significant products.

  • NewRisks Related to Business Environment and Economic Conditions

    quality on time and at reasonable prices, we could have difficulties fulfilling our orders, sales and profits could decline, and our commercial reputation could be damaged

    Manufacturing line underutilization and rising labor costs in China increase our fixed costs and damage profitability.

  • NewRisks Related to Business Environment and Economic Conditions

    Additionally, our global operations may also be adversely affected by political events, terrorist events and hostilities, complications due to natural, nuclear or other disasters or the spread of an infectious disease, virus or other widespread illness

    Statutory minimum wage increases in Mexico of 13 percent in 2026 force strategic shifts toward automation and alternative jurisdictions.

  • NewRisks Related to Business Environment and Economic Conditions

    attract and retain customers, prevent us from offering similar products and services as those offered by our competitors or inhibit our ability to meet regulatory, industry or other compliance requirements

    Undetected cyberattacks or IT system failures could disrupt our operations, damage our reputation, and violate compliance requirements.

  • NewRisks Related to Legal, Regulatory, Tax and Accounting Matters

    Changes in tax laws, tax rates and adverse positions taken by taxing authorities could impact operating results

    U.S. legislative actions or tax treaty overrides could increase our effective tax rate and cash tax position.

  • NewRisks Related to Legal, Regulatory, Tax and Accounting Matters

    Our tax burden could increase as a result of ongoing or future tax audits

    Periodic tax audits could result in unexpected assessments of additional tax, interest, and penalties.

  • NewRisks Related to Legal, Regulatory, Tax and Accounting Matters

    Our ability to use deferred tax assets may be subject to limitation

    Changes in local taxable income generation or tax laws could limit our ability to use deferred tax assets.

  • NewRisks Related to the Change in Tax Residency

    Any of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flows or the price of our ordinary shares

    If the distribution of Versigent shares fails to qualify as tax-free, subsidiaries and U.S. shareholders could face heavy tax liabilities.

Dropped

  • DroppedRisks Related to Business Environment and Economic Conditions

    to predict and respond to future changes resulting from potential health crises is uncertain as are the ultimate potential impacts on our business. In 2023 and 2024, our manufacturing facilities were not impacted by prolonged shutdowns directly resulting from any public health crises

  • DroppedRisks Related to Business Environment and Economic Conditions

    A prolonged economic downturn or economic uncertainty could adversely affect our business and cause us to require additional sources of financing, which may not be available

  • DroppedRisks Related to Business Environment and Economic Conditions

    The loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier could adversely affect our financial performance

    Uncertainty of future public health crises and COVID-19 related lockdowns in China impacting revenue.

Reworded

  • 66% rewrittenRisks Related to Business Environment and Economic Conditions

    We face risks associated with doing business in various national and local jurisdictions

    Updated international revenue percentage to 64 percent for fiscal year 2025 and adjusted formatting of inflation and exchange rate risk factors.

  • 58% rewrittenRisks Related to the Change in Tax Residency

    Planned Spin-off of Electrical Distribution Systems Business

    Named the spin-off entity as Versigent and clarified the transaction is expected to be treated as a tax-free spin-off.

  • 56% rewrittenRisks Related to Business Environment and Economic Conditions

    Public health crises and other global health pandemics, epidemics and disease outbreaks and the measures taken in response thereto could adversely impact our business, financial condition, results of operations and cash flows

    Updated the assessment period to state that manufacturing facilities experienced no prolonged health crisis shutdowns through 2025.

  • 47% rewrittenRisks Related to Legal, Regulatory, Tax and Accounting Matters

    We may identify the need for additional environmental remediation or demolition obligations relating to facility divestiture, closure and decommissioning activities

    Minor phrasing update specifying that environmental remediation costs may exceed current rather than general reserves.

  • 46% rewrittenRisks Related to Business Environment and Economic Conditions

    We may encounter manufacturing challenges

    Retained existing text regarding manufacturing challenges and forecasting difficulties.

  • 40% rewrittenRisks Related to the Change in Tax Residency

    We may be subject to various Swiss taxes as a result of the reorganization transaction

    Updated Swiss corporate income tax rate context to the year 2025 and added details on cantonal and communal capital taxes.

  • 38% rewrittenRisks Related to Business Environment and Economic Conditions

    We face risks related to cybersecurity for both our infrastructure and products and any cybersecurity breach or failure of one or more key information technology systems, or those of third-parties with which we do business could have a material adverse impact on our business or reputation

    Changed cyber-attacks to cyberattacks in referencing risks to IT infrastructure and third-party systems.

  • 34% rewrittenRisks Related to Business Environment and Economic Conditions

    We may suffer future asset impairment and other restructuring charges, including write downs of long-lived assets, goodwill, or intangible assets

    Retained existing text regarding potential asset impairments and restructuring charges.

  • 29% rewrittenRisks Related to Legal, Regulatory, Tax and Accounting Matters

    all of which could negatively affect our financial condition and results of operations

  • 21% rewrittenRisks Related to Business Environment and Economic Conditions

    Changes in factors that impact the determination of our non-U.S. pension liabilities may adversely affect us

All 47 risk factors

Headings as the filing states them, in filing order.

Risks Related to Business Environment and Economic Conditions

  1. 01Disruptions in the supply of raw materials and other supplies that we and our customers use in our products may adversely affect our profitability
  2. 02The cyclical nature of automotive sales and production can adversely affect our business
  3. 03A prolonged recession and/or a downturn in global automotive sales could adversely affect our business and cause us to require additional sources of financing to continue our operations, which may not be available to us or be available only on materially different terms than what has historically been availableNew
  4. 04A drop in the market share and changes in product mix offered by our customers can impact our revenues
  5. 05Our business in China is subject to aggressive competition and is sensitive to economic and market conditions
  6. 06We operate in the highly competitive automotive technology and component supply industry, and are dependent on the acceptance of new product introductions for continued growth
  7. 07If we do not respond appropriately, the evolution of the automotive industry towards autonomous vehicles and mobility on demand services could adversely affect our business
  8. 08We have invested substantial resources in markets and technologies where we expect growth and we may be unable to timely alter our strategies should such expectations not be realized
  9. 09We may not be able to respond quickly enough to changes in regulations, technology and technological risks, and to develop our intellectual property into commercially viable products
  10. 10Certain of our businesses rely on relationships with collaborative partners and other third-parties for development of products and potential products, and such collaborative partners or other third-parties could fail to perform sufficiently
  11. 11Declines in the market share or business of our five largest customers may adversely impact our revenues and profitability
  12. 12We may not realize sales represented by awarded business
  13. 13Continued pricing pressures, OEM cost reduction initiatives and the ability of OEMs to re-source or cancel vehicle programs may result in lower than anticipated margins, or losses, which may have a significant negative impact on our business
  14. 14Our supply agreements with our OEM customers are generally requirements contracts, and a decline in the production requirements of any of our customers, and in particular our largest customers, could adversely impact our revenues and profitability
  15. 15Our inability to effectively manage the timing, quality and costs of new program launches could adversely affect our financial performanceNew
  16. 16Adverse developments affecting one or more of our suppliers could harm our profitability
  17. 17The discontinuation or loss of business, or lack of commercial success with respect to a particular product for which we are a significant supplier could reduce our sales and harm our profitabilityNew
  18. 18Increases in costs of the materials and other supplies that we use in our products may have a negative impact on our business
  19. 19Our hedging activities to address commodity price fluctuations may not be successful in offsetting future increases in those costs or may reduce or eliminate the benefits of any decreases in those costs
  20. 20We may encounter manufacturing challenges46% rewritten
  21. 21quality on time and at reasonable prices, we could have difficulties fulfilling our orders, sales and profits could decline, and our commercial reputation could be damagedNew
  22. 22Changes in factors that impact the determination of our non-U.S. pension liabilities may adversely affect us21% rewritten
  23. 23We may suffer future asset impairment and other restructuring charges, including write downs of long-lived assets, goodwill, or intangible assets34% rewritten
  24. 24Employee strikes and labor-related disruptions involving us or one or more of our customers or suppliers may adversely affect our operations
  25. 25Public health crises and other global health pandemics, epidemics and disease outbreaks and the measures taken in response thereto could adversely impact our business, financial condition, results of operations and cash flows56% rewritten
  26. 26We are exposed to foreign currency fluctuations as a result of our substantial global operations, which may affect our financial results
  27. 27We face risks associated with doing business in various national and local jurisdictions66% rewritten
  28. 28Additionally, our global operations may also be adversely affected by political events, terrorist events and hostilities, complications due to natural, nuclear or other disasters or the spread of an infectious disease, virus or other widespread illnessNew
  29. 29The outbreak of armed conflicts in the Middle East beginning in October 2023 has also created numerous uncertainties, including the risk that the conflicts spread throughout the broader region, and their impact on the global economy and supply chains
  30. 30We face risks related to cybersecurity for both our infrastructure and products and any cybersecurity breach or failure of one or more key information technology systems, or those of third-parties with which we do business could have a material adverse impact on our business or reputation38% rewritten
  31. 31attract and retain customers, prevent us from offering similar products and services as those offered by our competitors or inhibit our ability to meet regulatory, industry or other compliance requirementsNew

Risks Related to Legal, Regulatory, Tax and Accounting Matters

  1. 32We may incur material losses and costs as a result of warranty claims, product recalls, product liability and intellectual property infringement actions that may be brought against us
  2. 33all of which could negatively affect our financial condition and results of operations29% rewritten
  3. 34We are subject to various U.S. federal, state and local, and non-U.S., laws and regulations, including those related to environmental, health and safety, financial and other matters
  4. 35We may identify the need for additional environmental remediation or demolition obligations relating to facility divestiture, closure and decommissioning activities47% rewritten
  5. 36We are involved from time to time in legal proceedings and commercial or contractual disputes, which could have an adverse impact on our profitability and consolidated financial position
  6. 37While we believe our reserves are adequate, the final amounts required to resolve these matters could differ materially from our recorded estimates and our results of operations could be materially affected
  7. 38Developments or assertions by us or against us relating to intellectual property rights could materially impact our business
  8. 39Taxing authorities could challenge our historical and future tax positions
  9. 40Changes in tax laws, tax rates and adverse positions taken by taxing authorities could impact operating resultsNew
  10. 41Our tax burden could increase as a result of ongoing or future tax auditsNew
  11. 42Our ability to use deferred tax assets may be subject to limitationNew

Risks Related to the Change in Tax Residency

  1. 43We may be subject to various Swiss taxes as a result of the reorganization transaction40% rewritten
  2. 44Planned Spin-off of Electrical Distribution Systems Business58% rewritten
  3. 45Any of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flows or the price of our ordinary sharesNew
  4. 46Any changes in consumer credit availability or cost of borrowing could adversely affect our business
  5. 47We may lose or fail to attract and retain key salaried employees and management personnel

Other Aptiv 10-Ks

  • FY2024 10-K risk factors
    40 risks

    Aptiv operates in the highly competitive and cyclical automotive technology and components industry, serving major OEM customers.

    Filed Feb 07, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.