Q3 2023 Summary
Published Jan 4, 2025, 1:15 AM UTCInitial Price$102.00July 1, 2023
Final Price$98.59October 1, 2023
Price Change$-3.41
% Change-3.34%
- Aptiv's high-voltage electrification revenues are expected to reach $1.8 to $1.9 billion this year, reflecting significant growth and a strong market position, especially with European and Chinese OEMs. , ,
- The company remains confident in its conservative approach to BEV penetration, focusing on select customers and programs, which positions them well amid market uncertainties regarding electric vehicle adoption rates. ,
- Aptiv is well-positioned in high-growth areas such as electrification and advanced driver assistance systems (ADAS), continuing to execute on performance initiatives that drive margin expansion and offset inflationary pressures. ,
- Slowing Growth in High-Voltage Electrification Revenues: Aptiv reported a decrease in high-voltage electrification revenue growth to 13% in the third quarter, down from previous quarters. This slowdown is attributed to customer mix and a deceleration in Battery Electric Vehicle (BEV) growth, particularly in Europe and China.
- Significant Labor Cost Increases: The company is experiencing substantial labor cost inflation, with an expected $900 million increase spread evenly over three years, amounting to about 10-11% annually. This rise in labor costs could pressure margins if not fully offset by performance initiatives.
- Exposure to Market Risks in China and Europe: Aptiv's revenue mix is increasingly weighted towards local Chinese and European OEMs, with expectations of a 50-50 split between global and local OEMs in 2024. Given the slowing BEV penetration in these regions, Aptiv's growth prospects could be adversely affected if market conditions worsen or if there are shifts in electrification strategies by these OEMs.