Aptiv's Q2 2025: Contradictions in Production Visibility, Tariff Impact, and China Strategy

Strong Financial Performance:
- Aptiv reported record revenue of $5.2 billion in Q2 2025, up 2% on an adjusted basis, with record operating income of $628 million.
- This growth was driven by strength across multiple business segments and stronger-than-expected vehicle production in North America, despite headwinds from foreign exchange and commodity prices.

New Business Bookings and Strategic Wins:
- The company secured $5.4 billion in new business awards, positioning Aptiv for another year of strong bookings.
- Notable awards included $1.8 billion in Advanced Safety and User Experience, with significant bookings from major OEMs, and $2.4 billion in Engineered Components, reflecting strong wins across various customer segments and markets.

Challenges in China and Strategic Focus:
- Aptiv's revenue in China declined 1%, impacted by unfavorable customer mix and a slowdown in production schedules with local OEMs like Zeekr and NIO.
- Despite this, the company is focused on expanding its presence in China by leveraging its global scale and emphasizing strategic programs, both domestically and internationally.

Cost Management and Margin Expansion:
- Despite a significant headwind of 120 basis points from foreign exchange and commodities, Aptiv's operating margin expanded by 10 basis points, driven by ongoing operational efficiency efforts and footprint optimization.
- The company continues to manage its cost structure and has seen significant margin improvements across its segments, particularly in Engineered Components and Electrical Distribution Systems.