# MESSAGE TO OUR STAKEHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/NYSE_APTV_2021/NYSE_APTV_2021.mmd` · pages 2-8_

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MESSAGE TO OUR STAKEHOLDERS

It seems like just yesterday that we celebrated reemerging as a public company with an initial public offering price of $22 per share. In the 10 years since, we have created significant value for our customers, employees and shareholders by executing our mission of enabling a safer, greener and more connected future of mobility.

Our success is based on a long heritage of innovations that have helped usher in these industry-defining megatrends. For example, in the 1990s we developed and introduced the industry's first radar system, providing the early foundation for future advanced driver-assistance systems (ADAS). During this same period, we also introduced high-voltage technologies for battery electric vehicles and vehicle satellite positioning for connectivity.

Today, these same megatrends continue to transform the automotive industry. An estimated 60 percent of new vehicles built today include ADAS, and 20 global OEMs have chosen Aptiv's safety solutions for more than 30 million vehicles produced since 2015. As demand for electric vehicles (EVs) has increased, OEMs have relied on Aptiv's high-voltage solutions for half of all EVs that have launched over the past few years. Further, OEM and fleet customers have utilized Aptiv's data collection, edge processing, advanced analytics and insights to accelerate product development, reduce warranty expenses and optimize their fleets.

While transforming the industry, we have also been transforming ourselves. Over the past 10 years, we have become a business that is more sustainable by design. We exited less-strategic low-growth and low-margin product lines and spun off our powertrain segment, positioning Aptiv to focus on our unique capabilities around the brain and nervous system of the vehicle. We also made acquisitions and investments that further strengthened our capabilities in software and data management, and broadened our portfolio of engineered components. The execution of our strategy has resulted in a more sustainable business, with a balanced mix of revenue across regions, customers and end markets.

The recent challenging environment has tested our resilience as the global pandemic and resulting supply chain constraints disrupted industry production. But our employees went above and beyond in their response, keeping their colleagues safe and enabling our customers to continue building vehicles. In 2021, we supported a record number of new product launches, received new business awards totaling a record $24 billion, and achieved revenue growth of 15 points over underlying vehicle production.

These efforts have resulted in considerable value creation. In the decade since our IPO, Aptiv has made the world safer, greener and more connected while also creating $40 billion of value for our shareholders, representing an average annual return of 25 percent through year-end 2021. Over the same period, the S&P 500 has returned an average of 17 percent per year.

## THE ROAD AHEAD

As we look to the next 10 years, we expect the shift to a more electrified, autonomous, software-driven and connected industry to further accelerate, and Aptiv is perfectly positioned to respond.

Aptiv's Smart Vehicle Architecture \( ^{™} \)  (SVA \( ^{™} \) ) embodies our holistic approach to enable these next-generation vehicles. In 2021, Aptiv received the first customer award for a central vehicle controller that will support the up-integration of communications and core body, safety, and security functionality while helping to abstract hardware from software. This recent achievement builds on our momentum of nine SVA advanced development awards, in addition to customer awards for other SVA technology building blocks such as zone controllers and solid-state electrical centers.

Aptiv's SVA also solves a range of challenges for OEMs as they accelerate the introduction of EVs in response to consumer demand. Aptiv's advanced high-voltage technologies enable those vehicles to increase their battery range and reduce their time to charge, with innovations such as busbars designed to facilitate larger batteries, active-cooled charging inlets, and connection solutions designed for up to 500 amps. We achieved a record $3.5 billion of high-voltage new-business bookings in 2021, validating both the pace of consumer demand for EVs and the strength of our product offering.

Aptiv is also developing a cloud-native software DevOps platform, including operating system and middleware, certified to the highest level of safety and secure by design. This industry-first end-to-end solution will accelerate software development, support continuous over-the-air deployment and provide full lifecycle management, enabling truly software-defined vehicles. With these edge-to-cloud software solutions,

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OEMs will be able to reduce time to market for new innovations — with higher quality and lower cost — while also unlocking new business models.

In this regard, our recently announced definitive agreement to acquire Wind River further differentiates Aptiv from our competitors and strengthens our position as a leading provider of full-stack software solutions for our customers. We will capitalize on Wind River's portfolio of edge-to-cloud software solutions as vehicles increasingly become critical elements of the broader intelligent ecosystem. With our combined decades of experience in delivering mission-critical systems, we will not only accelerate the industry's journey to a software-defined future but also further diversify our end-market exposure.

These software capabilities are key as we build upon our industry-leading ADAS and user experience platforms to create more advanced features and achieve even higher levels of safety, comfort and convenience. Our Motional joint venture has leveraged Aptiv ADAS technologies to help develop its autonomous vehicles, which have been operating on the Lyft network in Las Vegas for the past four years, and Motional will continue to leverage our solutions as it develops fully driverless vehicles that will operate on that network in 2023 and beyond. This relationship not only allows Aptiv to "look around the corner" to better predict the challenges our customers will face and align our ADAS development efforts accordingly, but also opens doors to new markets and business models. These insights will prove important to Aptiv as the global market for shared autonomous mobility grows to $1.3 trillion by 2030, as estimated by McKinsey & Co.

## GETTING THERE SUSTAINABLY

Our solutions allow our OEM customers to build vehicles that help them achieve their sustainability targets, but as we move forward, we also know that our operations must be as sustainable as the products we create. The materials we use and the manufacturing facilities we operate have a direct impact on our collective sustainability goals.

To that end, in 2021 we were proud to announce our pledge to power all of our global operations with 100 percent renewable energy by 2030 and to ensure that our product portfolio will be net carbon-neutral by 2040. These goals build upon Aptiv's alignment with the Science Based Targets initiative to help mitigate the effects of climate change and create a zero-carbon economy. We are also working with both suppliers and customers to reduce the environmental impact of the resources used to manufacture our products, including exploring the use of renewable feedstocks and recycled materials.

Of course, none of these efforts — from product development to sustainable operations — are achievable without the right people. Aptiv's culture of diversity and inclusion fosters innovation, allowing us to draw from our employees' wide range of capabilities, experiences and backgrounds. We are proud to have been named a Financial Times Diversity Leader for the second time, with women representing approximately 50 percent of our global workforce and 24 percent of management.

To continue to develop and retain world-class talent into the future, our managers remain highly focused on our people, providing them with exciting new challenges and opportunities for continuous learning and advancement throughout their careers at Aptiv. In addition, in an environment where the competition for talent has never been greater, we are actively attracting new talent — from our own industry as well as others.

From our newest to our most experienced Aptiv employee, it is our shared mission that drives us. At the time of our IPO 10 years ago, we had a vision of what would define the future of our industry and how we could shape it. Today, we have achieved incredible momentum in realizing that vision to make the world safer, greener and more connected, by purposefully enhancing our portfolio of advanced technologies, diversifying our revenues and expanding our competitive position as the leading provider of next-generation technology solutions.

I genuinely believe the best is yet to come. Thank you for your continued trust and confidence in Aptiv.

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Kevin P. Clark
President and Chief Executive Officer

Kun P. Clark