The company's strategy focuses on profitable growth across its technology-focused product portfolio supporting electric, hybrid, and combustion vehicles. Electric vehicle adoption volatility across different regions is a concern, with eProduct revenue at 17% of total revenue in 2024.

In 2023, the Company announced a $130 million to $150 million restructuring plan to address structural costs in its Foundational products businesses. In June 2024, the Company announced a $75 million restructuring plan to address the cost structure in its PowerDrive Systems segment due to electric vehicle adoption volatility across different regions.

On September 19, 2024, the Company commenced a lawsuit against PHINIA, seeking to recover approximately $120 million of value added tax refunds. This creates uncertainty regarding the financial relationship between the two companies.

Research and development (R&D) costs increased $19 million. R&D costs, net of customer reimbursements, were 5.2% of net sales in the year ended December 31, 2024, compared to 5.1% of net sales in the year ended December 31, 2023. The increase in R&D costs, net of customer reimbursements, was primarily due to increasing net investment related to the Company's eProducts.

During the year ended December 31, 2024, the Company recorded goodwill impairment charges of $577 million related to the goodwill at PowerDrive Systems and Battery & Charging Systems. This reflects difficulties in forecasting demand for electric vehicles and managing those businesses.

The Company uses a variety of tactics in an attempt to limit the impact of supply shortages, tariffs and inflationary pressures. The Company's global procurement organization works to accelerate cost reductions, purchase from lower cost regions, optimize the supply base, mitigate risk and collaborate on its buying activities.

The automotive industry continues to see electric vehicle adoption volatility across different regions. If the overall adoption of electric vehicles continues to be slower as compared to our expectations, we may not only fail to realize expected rates of return on our existing investments, but we may incur further losses on such investments.

Any potential alleged violations by BorgWarner of existing or future emissions standards could result in government investigations and other legal proceedings, the recall of one or more of our products, negotiated remedial actions, fines, disgorgement of profits, restricted product offerings, reputational harm or a combination of any of those items.

OEM customers expect annual price reductions in our business. Inability to reduce costs in an amount equal to annual price reductions, increases in raw material costs, and increases in employee wages and benefits could have an adverse effect on us.

We compete globally with a number of other manufacturers and distributors that produce and sell similar products. Our competitors include vertically integrated units of our major OEM customers, as well as a large number of independent domestic and international suppliers.

The automotive supply market in China is highly competitive, with competition from many of the largest global manufacturers and numerous smaller domestic manufacturers. As the Chinese market evolves, we anticipate that market participants will act aggressively to increase or maintain their market share.

The automotive industry is increasingly focused on improved vehicle efficiency and reduced emissions, including the development of hybrid and electric vehicles, largely as a result of changing consumer preferences and increasingly stringent global regulatory requirements related to climate change.

We have taken, are taking, and may in the future take restructuring actions to realign and resize our production capacity and cost structure to meet current and projected operational and market requirements.

The Company uses a variety of tactics in an attempt to limit the impact of supply shortages, tariffs and inflationary pressures. The Company's global procurement organization works to accelerate cost reductions, purchase from lower cost regions, optimize the supply base, mitigate risk and collaborate on its buying activities.

To improve efficiency and reduce costs, we have regionally centralized the information systems that support our business processes such as invoicing, payroll, and general management operations. If the centralized systems are disrupted or disabled, key business processes could be interrupted, which could adversely affect our business.

The Company conducts advanced propulsion research. This advanced engineering function seeks to leverage know-how and expertise across product lines to create new electrified propulsion systems and modules that can be commercialized.

The Company has approximately 5,190 active domestic and foreign patents and patent applications pending or under preparation and receives royalties from licensing patent rights to others.

The Company is also committed to preparing its workforce for changes in the industry through multiple initiatives, such as training programs created in partnership with elite universities to increase the knowledge and skills of its engineers to enable them to work in an electrification environment.

As of December 31, 2024, the Company had repurchased $300 million of common stock under this repurchase authorization, excluding any related fees and taxes. In total, the Company repurchased $400 million of the Company's stock during the year ended December 31, 2024, excluding any related fees and taxes.

As a percentage of sales, capital expenditures were 4.8% and 5.9% for the years ended December 31, 2024 and 2023, respectively.

The Company expects to contribute a total of $20 million into its defined benefit pension plans during 2025. Of the $20 million in projected 2025 contributions, $6 million are contractually obligated, while any remaining payments would be discretionary.

The Company recognizes that, in many of the locations where it operates, employees have freedom of association rights with third-party organizations such as labor unions. The Company respects and supports those rights, including the right to collective bargaining, in accordance with local laws.

The safety of the Company's employees is vitally important, and the Company is dedicated to continuously improving safety performance. The Company's safety performance is rooted in strong leadership commitment and support, as well as robust safety management systems.

Our operations are subject to laws governing, among other things, emissions to air, discharges to waters, and the generation, management, transportation and disposal of waste and other materials.

Our financial performance depends on conditions in the global automotive industry. Automotive and truck production and sales are cyclical and sensitive to general economic conditions and other factors, including interest rates, consumer credit, and consumer spending and preferences.

The weighted average market production, as estimated by the Company for the year ended December 31, 2024, was down approximately 3% from the year ended December 31, 2023. Weighted average market production reflects light and commercial vehicle production as reported by S&P Global, weighted for the Company's geographic exposure, as estimated by the Company.

The Company expects global industry production to decrease modestly year over year in 2025. However, the Company expects net new business-related sales growth to drive a sales increase in excess of the change in industry production outlook.