Kongsberg Automotive

Regulatory Filings • Feb 5, 2025

Limited negative effects for Kongsberg Automotive related to imposed and potential new tariffs

Limited negative effects for Kongsberg Automotive related to imposed and potential new tariffs

Kongsberg, February 5, 2025: Kongsberg Automotive (KA) sees limited negative

effects from imposed tariffs on imports from China. KA will seek full

compensation for increased customs tariffs from its customers to recover any

additional costs imposed by these tariffs, similar to what others in the

industry will do. The impact of new tariffs will be limited also with less than

full customer compensation.

President of the United States (US) Donald Trump signed executive orders on Feb

1, 2025, to implement 25% tariffs on Mexican and Canadian goods, while imposing

a 10% duty on Chinese goods. On February 3, 2025, President Trump agreed to hold

off imposing tariffs on Mexico and Canada for 30 days, while the plan to levy

tariffs on China came into effect on February 4, 2025.

"It is important to note that it is not a challenge that KA is facing alone, it

is a global vehicle and automotive industry challenge. KA has the ambition to

fully recover any additional cost related to the imposed tariffs-passing the

cost on to our customers ultimately means that the vehicles will be more

expensive. We see a risk that higher vehicle prices will lower the overall

market demand, which then would impact negatively on KA's orderbooks," says KA's

interim President & CEO and CFO Christian Johansson.

KA has two manufacturing plants in Mexico: In Ramos Arizpe for the Flow Control

Systems product range and in Nuevo Laredo, for the Drive Control Systems and

Driveline product range. KA's customers are primarily commercial vehicle and

passenger car manufacturers, or Tier 1 suppliers to the automotive industry.

Products are shipped to customer production sites in the US and in Mexico. KA

has three manufacturing sites in the US, selling primarily to US-based

customers. In Canada, KA has a smaller manufacturing plant supplying to

primarily a local Canadian customer.

Based on the information available to date, all material and components sourced

by KA from China to KA's US plants are subject to increased tariffs. In

addition, materials delivered to KA plants in the US by US suppliers having sub

-supplies from China are on that portion subject to increased customs tariffs.

The customs tariffs increase is estimated to be approximately MEUR 2 for the

full year 2025, based on present purchasing volumes.

Potential tariffs for exports from Mexico to the US will have to be assessed

when the regulations for how this will be implemented will be fully known and if

these tariffs will be imposed. Based on present information, the company's

assessment is that the negative effect would be fairly limited since the

material and components under temporary import to Mexico from the US are

exempted.

KA is continuously preparing to be able to act quickly if increased tariffs on

Mexican and Canadian goods take effect after the 30-day postponement.

KA believes in the importance of local presence in North America and continues

to have ambitions to increase sourcing locally in the region. As a company, KA

is continuously considering its supplier base footprint based on total landed

cost. Tariffs are one important existing parameter in the sourcing process

today. With the new tariffs in place and preliminary future changes, the

supplier sourcing strategy will be adapted where necessary going forward.

Media and Communications contact:

Therese Sjöborg Skurdal - Director Group Marketing and Communications

therese.skurdal@ka-group.com

+47 982 14 059

Investor Relations contact:

investor.relations@ka-group.com

About Kongsberg Automotive ASA

Kongsberg Automotive provides cutting-edge technology to the global vehicle

industry. We drive the global transition to sustainable mobility by putting

engineering, sustainability, and innovation into practice. Our product portfolio

includes driver and motion control systems, fluid assemblies, and industrial

driver interface products. Find more information at:

https://www.kongsbergautomotive.com