10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No.: 001-38471

Veoneer, Inc.

(Exact name of registrant as specified in its charter)

Delaware	82-3720890
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
Klarabergsviadukten 70, Section C6
Box 13089

Stockholm Sweden

(Address of principal executive offices)

SE- 103 02

(Zip Code)

+46 8 527 762 00

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $1.00 par value	VNE	New York Stock Exchange

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes:  ☒ No: ☐

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes:  ☒    No:  ☐

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging Growth Company	☐

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐     No:  ☒ 

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of July 16, 2021, there were 111,959,234 shares of common stock of Veoneer, Inc., par value $1.00 per share, outstanding.

Exhibit index located on page 40

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including without limitation, statements regarding management’s examination of historical operating trends and data, estimates of future sales (including estimates related to order intake), operating margin, cash flow, RD&E spend, taxes or other future operating performance or financial results, are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words. We have based these forward-looking statements on our current expectations and assumptions and/or data available from third parties about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs.

New risks and uncertainties arise from time to time, and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Factors that could cause actual results to differ materially from these forward-looking statements include, without limitation, the following: general economic conditions; the cyclical nature of automotive sales and production; changes in general industry and market conditions or regional growth or decline; further decreases in light vehicle production; the impact of the coronavirus pandemic (COVID-19) on (i) the Company’s financial condition, business operations and liquidity, (ii) our customers and their production and product launch schedules, (iii) our suppliers and availability of components for our products, and (iv) the global economy; the development and commercial success of the software and integrated platform contemplated by the agreement with Qualcomm Technologies; our ability to achieve the intended benefits from our separation from our former parent; our ability to be awarded new business or loss of business from increased competition; higher than anticipated costs and use of resources related to developing new technologies; higher raw material, energy and commodity costs; supply chain disruptions and component shortages impacting the Company or the automotive industry; changes in customer and consumer preferences for end products; market acceptance of our new products; dependence on and relationships with customers and suppliers; our ability to share RD&E costs with our customers; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; costs or difficulties related to the integration of any new or acquired businesses and technologies; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto; higher expenses for our pension and other post-retirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of future litigation, regulatory actions or investigations or infringement claims; our ability to protect our intellectual property rights; tax assessments by governmental authorities and changes in our tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; political conditions; and other risks and uncertainties identified in Part I Item 2 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A -“Risk Factors” and in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission ("SEC") on February 19, 2021.

For any forward-looking statements contained in this Quarterly Report on Form 10-Q or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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Veoneer, Inc.

Table of Contents

	Page
Part I – Financial Information	4
Item 1 – Condensed Consolidated Financial Statements	4
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3 - Quantitative and Qualitative Disclosures about Market Risk	36
Item 4 - Controls and Procedures	36
Part II – Other Information	37
Item 1 - Legal Proceedings	37
Item 1A - Risk Factors	37
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3 – Defaults Upon Senior Securities	39
Item 4 – Mine Safety Disclosures	39
Item 5 – Other Information	39
Item 6 - Exhibits	40
Signature	41

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Part I – Financial Information

Item 1 – Condensed Consolidated Financial Statements

Veoneer, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(U.S. DOLLARS IN MILLIONS EXCEPT PER SHARE DATA)

		Three Months Ended June 30				Six Months Ended June 30
		2021		2020		2021		2020
Net sales	Note 3	$	398	$	184	$	816	$	546
Cost of sales		(336)		(181)		(698)		(490)
Gross profit		62		3		118		56
Selling, general and administrative expenses		(41)		(38)		(81)		(82)
Research, development and engineering expenses, net		(108)		(44)		(224)		(175)
Amortization of intangibles		(2)		(1)		(4)		(3)
Other income, net		(3)		16		(5)		18
Operating loss		(92)		(64)		(196)		(186)
Loss on divestiture and assets impairment charge, net	Note 5	—		—		—		(67)
Gain (loss) from equity method investment	Note 11	1		(19)		8		(38)
Interest income		1		3		1		7
Interest expense		(5)		(5)		(10)		(10)
Other non-operating items, net		(1)		(3)		1		(1)
Loss before income taxes	Note 17	(96)		(88)		(196)		(295)
Income tax expense	Note 9	(4)		(2)		(9)		(26)
Net loss		(100)		(90)		(205)		(321)
Less: Net income attributable to non-controlling interest		—		—		—		1
Net loss attributable to controlling interest		$	(100)	$	(90)	$	(205)	$	(322)
Net loss per share - basic and diluted	Note 16	$	(0.89)	$	(0.80)	$	(1.83)	$	(2.89)
Weighted average number of shares outstanding (in millions)		111.84		111.58		111.77		111.52
Weighted average number of shares outstanding, assuming dilution (in millions)		111.84		111.58		111.77		111.52

See notes to the unaudited condensed consolidated financial statements.

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Veoneer, Inc.

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

(U.S. DOLLARS IN MILLIONS)

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Net loss	$	(100)	$	(90)	$	(205)	$	(321)
Other comprehensive loss, before tax:
Change in cumulative translation adjustment	5		18		(10)		(3)
Pension liability	—		—		—		1
Other comprehensive income (loss), before tax	5		18		(10)		(2)
Other comprehensive income (loss), net of tax	5		18		(10)		(2)
Comprehensive loss	(95)		(72)		(215)		(323)
Less: Comprehensive income attributable to non-controlling interest	—		—		—		1
Comprehensive loss attributable to controlling interest	$	(95)	$	(72)	$	(215)	$	(324)

See notes to the unaudited condensed consolidated financial statements.

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Veoneer, Inc.

Condensed Consolidated Balance Sheets

(U.S. DOLLARS IN MILLIONS)

		(unaudited)
		June 30, 2021		December 31, 2020
Assets
Cash and cash equivalents		$	555	$	758
Restricted cash		1		—
Receivables, net		257		292
Inventories, net	Note 10	157		134
Related party receivables	Note 18	8		9
Prepaid expenses and other contract assets		44		36
Other current assets		13		15
Total current assets		1,035		1,244
Property, plant and equipment, net		403		431
Operating lease right-of-use assets		85		89
Equity method investment	Note 11	18		153
Goodwill		318		317
Intangible assets, net		18		21
Deferred tax assets		5		6
Other non-current assets		18		27
Total assets		$	1,900	$	2,288
Liabilities and equity
Accounts payable		$	262	$	257
Related party payables	Note 18	1		2
Accrued expenses	Note 12	200		232
Income tax payable		7		25
Related party short-term debt	Note 18	—		16
Other current liabilities		60		55
Total current liabilities		530		587
4.00% Convertible Senior Notes due 2024	Note 6	174		170
Related party long-term debt	Note 18	—		115
Pension liability	Note 13	20		20
Deferred tax liabilities		12		12
Operating lease non-current liabilities		69		71
Finance lease non-current liabilities		46		46
Other non-current liabilities		19		28
Total non-current liabilities		340		462
Equity
Common stock (par value $1.00, 325 million shares authorized, 111 million shares and 112 million shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)		112		111
Additional paid-in capital		2,354		2,349
Accumulated deficit		(1,431)		(1,226)
Accumulated other comprehensive income/ (loss)		(5)		5
Total equity		1,030		1,239
Total liabilities and equity		$	1,900	$	2,288

See notes to the unaudited condensed consolidated financial statements.

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Veoneer, Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(U.S. DOLLARS IN MILLIONS)

	Six months ended June 30, 2021
	Equity attributable to
	Common Stock		Additional Paid In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at beginning of period	$	111	$	2,349	$	(1,226)	$	5	$	1,239
Net loss	—		—		(205)		—		(205)
Foreign currency translation	—		—		—		(10)		(10)
Stock based compensation expense	—		5		—		—		5
Issuance of common stock	1		—		—		—		1
Balance at end of period	$	112	$	2,354	$	(1,431)	$	(5)	$	1,030

	Six months ended June 30, 2020
	Equity attributable to
	Common Stock		Additional Paid In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Non-controlling Interest		Total
Balance at beginning of period	$	111	$	2,343	$	(681)	$	(44)	$	89	$	1,818
Net loss	—		—		(322)		—		1		(321)
Foreign currency translation	—		—		—		—		1		1
Stock based compensation expense	—		4		—		—		—		4
Business divestiture	—		—		—		3		(91)		(88)
Balance at end of period	$	111	$	2,347	$	(1,003)	$	(41)	$	—	$	1,414

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Veoneer, Inc.

Condensed Consolidated Statements of Cash Flow (Unaudited)

(U.S. DOLLARS IN MILLIONS)

	Six Months Ended June 30
	2021		2020
Operating activities
Net loss	$	(205)	$	(321)
Depreciation and amortization	57		46
Gain on divestitures	—		(77)
Assets impairment charge	—		144
Undistributed (gain) loss from equity method investments	(8)		38
Stock-based compensation	5		4
Deferred income taxes	—		(1)
Other, net	4		(9)
Change in operating assets and liabilities:
Receivables, gross	33		50
Accrued expenses	(22)		22
Related party receivables and payables, net	—		2
Accounts payable	9		(86)
Prepaid expenses and other contract assets	(9)		29
Inventories, gross	(32)		14
Income taxes	(15)		21
Other current assets and liabilities, net	4		8
Net cash used in operating activities	(179)		(116)
Investing activities
Proceeds from divestitures	—		176
Capital expenditures	(30)		(51)
Equity method investment	12		(26)
Net cash provided by investing activities	(18)		99
Financing activities
Dividend paid to non-controlling interest	—		(5)
(Payments for) proceeds from long-term debt	1		(1)
(Payments for) proceeds from short-term debt	(2)		15
Proceeds from exercise of stock options	1		—
Net cash (used in) provided by financing activities	—		9
Effect of exchange rate changes on cash and cash equivalents	(5)		—
Increase (decrease) in cash and cash equivalents and restricted cash	(202)		(8)
Cash and cash equivalents and restricted cash at beginning of period	758		859
Cash and cash equivalents and restricted cash at end of period	$	556	$	851

See notes to the unaudited condensed consolidated financial statements.

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Veoneer, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(U.S. DOLLARS IN MILLIONS)

Note 1. Basis of Presentation

The condensed consolidated financial statements of Veoneer, Inc. (the "Company" or "Veoneer") have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").The accompanying unaudited condensed consolidated financial statements for Veoneer do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Consolidated Financial Statements for the year ended December 31, 2020 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

Certain amounts in the unaudited condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts.

The Company has one operating segment, the Electronics segment. The Company previously had two operating segments, Electronics and Brake Systems. Electronics includes all electronics resources and expertise, Restraint Control Systems and Active Safety products, and Brake Systems provided brake control and actuation systems. The Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold on August 10, 2020. The remaining Brake Systems business is no longer a reportable segment due to immateriality.

Divestiture of Veoneer Nissin Brake System ("VNBS")

On October 30, 2019, Veoneer signed definitive agreements to sell its 51% ownership in Veoneer Nissin Brake Japan ("VNBJ") and Veoneer Nissin Brake China ("VNBZ"), entities that comprise VNBS to its joint venture partner Nissin-Kogyo Co., Ltd. (“Nissin Kogyo”) and Honda Motor Co., Ltd. The aggregate purchase price was $176 million. The divestiture of VNBJ and VNBZ was structured as two separate transactions each of which was completed on February 3, 2020, and the VNBS joint venture was terminated. See Note 5 "Divestiture and held for sale" for additional information.

Divestiture of Veoneer Brake Systems ("VBS")

On August 10, 2020, Veoneer signed a definitive agreement to sell the majority of the Brake Systems business in North America to ZF Friedrichshafen AG ("ZF"). The aggregate purchase price was $1. In connection with the transaction, the Company received approximately $22 million from ZF for VBS operational cost reimbursements. See Note 5 "Divestiture and held for sale" for additional information.

Note 2. Summary of Significant Accounting Policies

A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

Restricted Cash

Restricted cash represents amounts designated for uses other than current operations and $1 million of Restricted cash related to cash collateral for other corporate purposes as of June 30, 2021.

Concentration of Credit Risk

A substantial majority of the Company’s trade receivables are derived from sales to Original Equipment Manufactures ("OEMs"). For the three and six months ended June 30, 2021, the Company’s four largest customers accounted for 44% and 46% of net sales, respectively, and for the three and six months ended June 30, 2020, the Company’s four largest customers accounted for 55% and 59% of net sales, respectively. Additionally, as of June 30, 2021 and December 31, 2020, these four largest customers accounted for 33% and 40% of the Company’s accounts receivables, respectively. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. The Company believes that credit risks are moderated by the financial stability of the Company’s major customers.

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New Accounting Standards

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements.

Adoption of New Accounting Standards

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes," which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2019-12 in the first quarter of 2021. The adoption of ASU 2019-12 did not have a material impact on the Company's unaudited condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company adopted ASU 2018-14 in the first quarter of 2021. The adoption of ASU 2018-14 did not have a material impact on the Company's unaudited condensed consolidated financial statements.

Accounting Standards Issued But Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The guidance provides optional expedients and exceptions related to certain contract modifications and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another rate that is expected to be discontinued. The guidance was effective upon issuance and generally can be applied to applicable contract modifications and hedge relationships prospectively through December 31, 2022. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on its disclosures.

In August 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)." The guidance provides simplifications of the accounting for convertible instruments and reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. In addition to further improve the decision usefulness and relevance of the information being provided to users of financial statements, information transparency has been increased by amending certain disclosure requirements. The guidance is effective for public business entities for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. In addition, an entity should adopt the guidance as of the beginning of its annual fiscal year. The amendments in this update are required to be applied through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. The Company is currently evaluating this guidance to determine the impact on its disclosures.

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Note 3. Revenue

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary region and products.

Net Sales by Region

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Asia	$	100	$	—	$	100	$	59	$	—	$	59
Americas	114		13		127		43		5		48
Europe	171		—		171		77		—		77
Total net sales	$	385	$	13	$	398	$	179	$	5	$	184

Net Sales by Region

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Asia	$	198	$	—	$	198	$	117	$	24	$	141
Americas	245		24		$	269	160		19		$	179
Europe	349		—		349		226		—		226
Total net sales	$	792	$	24	$	816	$	503	$	43	$	546

Net Sales by Products

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Restraint Control Systems	$	175	$	—	$	175	$	100	$	—	$	100
Active Safety products	197		—		197		79		—		79
Brake Systems	—		13		13		—		5		5
Other	13		—		13		—		—		—
Total net sales	$	385	$	13	$	398	$	179	$	5	$	184

Net Sales by Products

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Restraint Control Systems	$	364	$	—	$	364	$	262	$	—	$	262
Active Safety products	402		—		402		241		—		241
Brake Systems	—		24		24		—		43		43
Other	26		—		26		—		—		—
Total net sales	$	792	$	24	$	816	$	503	$	43	$	546

Note 4. Business Combinations

Business combinations generally take place to either gain key technology or strengthen Veoneer’s position in a certain geographical area or with a certain customer. The results of operations and cash flows from the Company’s acquisitions have been included in the Company’s unaudited condensed consolidated financial statements prospectively from their date of acquisition.

Zenuity, Inc and Zenuity GmbH

Zenuity AB, a 50% ownership joint venture with Volvo Cars Corporation (VCC), was separated pursuant to definitive agreements between the Company and VCC, in order for each company to more effectively drive their respective strategies. As

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part of the transaction the Company paid approximately $37 million to Zenuity for 200 software engineers and two business units located in Germany and the US.

The Company applied the acquisition method of accounting to the Zenuity, Inc and Zenuity GmbH entities, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The goodwill reflects the workforce. The recognized goodwill of $25 million recorded as part of this acquisition is not deductible for tax purposes. The opening balance sheet is based on final assessment of the fair values of certain acquired assets, principally intangibles, and certain assumed liabilities. The Company used discounted cash flow ("DCF") analyses, which represent Level 3 fair value measurements, to assess the purchase price allocation. As the Company finalizes the fair value of the acquired assets and assumed liabilities, additional purchase price adjustments may be recorded during the measurement period. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments occur.

Total Zenuity, Inc and Zenuity GmbH acquisition related costs were approximately $1 million for the period ended December 31, 2020.

The following table summarizes the estimated fair values of identifiable acquired assets and assumed liabilities:

Assets	As of July 1, 2020
Cash and cash equivalents	$	4
Receivable, net	12
Property, plant and equipment, net	3
Operating lease right-of-use assets	8
Goodwill	25
Total assets	$	52
Tax payable	2
Accrued liabilities	3
Operating lease non-current liabilities	10
Total liabilities	$	15
Net assets acquired	$	37

Note 5. Divestiture and held for sale

VBS

In 2019, the Company started exploring strategic options for its non-core business in the Brake Systems segment. In the first quarter of 2020, management committed and approved a plan to sell VBS. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of June 30, 2020 and were required to be adjusted to the lower of fair value less cost to sell or carrying value. This resulted in an impairment charge of approximately $144 million which was recorded within Loss on divestiture and assets impairment charges, net on the unaudited Condensed Consolidated Statements of Operations during the period ended June 30, 2020. The impairment was measured using third party sales pricing to determine fair values of the assets. The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." The assets and liabilities associated with the transaction were separately classified as held for sale during 2020 and depreciation of these long-lived assets ceased during first half of 2020. The divestiture did not meet the criteria for presentation as a discontinued operation.

On August 10, 2020 Veoneer signed a definitive agreement to sell the majority of the Brake Systems business in North America to ZF. The aggregate purchase price was $1. In connection with the transaction, the Company received approximately $22 million from ZF for VBS operational cost reimbursement. The transaction closed during third quarter 2020 and no additional gain or loss was recognized.

VNBS

In the fourth quarter of 2019, management approved a plan to sell VNBS. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of December 31, 2019, and depreciation of long-lived assets ceased. The divestiture did not meet the criteria for presentation as a discontinued operation.

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On October 30, 2019, the Company entered into definitive agreements with Nissin-Kogyo Co., Ltd. and Honda Motor Co., Ltd to divest VNBS. On February 3, 2020, the Company completed the sale of VNBS. The aggregate purchase price of the transaction was $176 million, subject to certain adjustments. The net cash proceeds after adjusting for closing costs was $175 million. The Company recognized a gain on the divestiture of $77 million, net of closing costs.

Note 6. Debt

The Company’s short and long-term debt consists of the following:

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Short-Term Debt:
Short-term borrowings	$	4	$	4
Long-Term Debt:
4.00% Convertible Senior Notes due 2024 (Carrying value)	174		170
Other long-term borrowings	7		7
Total Debt	$	185	$	181

Short-Term Debt:

Short-term debt is included in Other current liabilities in the Condensed Consolidated Balance Sheet.

Long-Term Debt:

Other long-term borrowings

Other long-term borrowings are included in Other non-current liabilities in the Condensed Consolidated Balance Sheet.

4.00% Convertible Senior Notes

On May 28, 2019, the Company issued, in a registered public offering in the U.S., Convertible Senior Notes (the “Notes”) with an aggregate principal amount of $207 million. The Notes bear interest at a rate of 4.00% per year payable semi-annually in arrears on June 1 and December 1 of each year, beginning December 1, 2019. The Notes will mature on June 1, 2024, unless repurchased, redeemed or converted in accordance with their terms prior to such date.

The net proceeds from the offering of the Notes were approximately $200 million, after deducting issuance costs of $7 million. The Company accounted for these issuance costs as a direct deduction from the carrying amount of the Notes. These costs are being amortized into interest expense for 5 years or through June 2024.

The conversion rate is 44.8179 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $22.3125 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or notice of redemption, as the case may be. In no event will the conversion rate per $1,000 principal amount of notes as a result of this adjustment exceed 57.1428 shares of common stock, as stipulated in the indenture.

The Company may not redeem the Notes prior to June 1, 2022. On or after this date, the Company may redeem for cash, shares or both all or any portion of the Notes, at our option, if the last reported sale price of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes.

If the Company undergoes a fundamental change (as defined in the indenture), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

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The Notes are the Company's general unsecured obligations and rank senior in right of payment to all of the Company's indebtedness that is expressly subordinated in right of payment to the Notes, equal in right of payment with all of the Company's liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.

Holders may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding March 1, 2024 only under the following circumstances: (1) if the last reported sale price of the Company's common stock for at least 20 trading days, whether or not consecutive, during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the "trading price" (as defined in the indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.

On or after March 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company's election, as stipulated in the indenture.

In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the unaudited Consolidated Condensed Balance Sheet and amortized to interest expense using the effective interest method over the term of the Notes. The effective interest rate on the Notes is 10%. The equity component of the Notes of approximately $46 million is included in additional paid-in capital in the unaudited Condensed Consolidated Balance Sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Notes using the same proportions as the proceeds from the Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the unaudited Condensed Consolidated Balance Sheet and amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ equity.

The following table presents the outstanding principal amount and carrying value of the Notes:

4.00% Convertible Senior Notes due 2024	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Principal amount (face value)	$	207	$	207
Unamortized issuance cost	(3)		(4)
Unamortized debt discount	(30)		(33)
Net Carrying value	$	174	$	170

The Company recognized total interest expense related to the Notes of $5 million and $4 million for the three months ended June 30, 2021 and 2020, respectively, and $9 million and $8 million for the six months ended June 30, 2021 and 2020, respectively, in the unaudited Condensed Consolidated Statements of Operations.

The estimated fair value of the Notes was $263 million as of June 30, 2021. The estimated fair value of the Notes was determined through consideration of quoted market prices. The fair value is classified as Level 2, as defined in Note 8 "Fair Value Measurements".

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Note 7. Restructuring Activities

The Company is undertaking various restructuring activities related to its Market Adjustment Initiatives program to achieve its strategic and financial targets and plans. These restructuring activities include, but are not limited to, consolidation of available capacity and resources along with production, engineering and administrative cost structure realignments. The Company expects to finance restructuring activities through its cash on hand and cash generated from operations.

Restructuring costs are recorded as elements of a plan as they become finalized and approved where the timing of the activities and the amount of related costs are not expected to change materially. Such costs are estimated based on information available at the time such charges are recorded. In general, management anticipates that restructuring activities will be completed within a relatively short time frame such that changes to the plan are expected to be immaterial. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially estimated.

During the first quarter of 2021, the Company announced certain restructuring activities impacting certain engineering and administrative functions to further align the Company's resources with its core product technologies and customers. During the three and six month period ended June 30, 2021, the Company recorded restructuring expenses of $2 million and $3 million, respectively. The Company recorded zero in restructuring expenses for the three and six month period ended June 30, 2020. The payback on such restructuring expenses is expected to be less than one year.

Note 8. Fair Value Measurements

The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs.

Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.

Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Assets which are valued at net asset value per share ("NAV"), or its equivalent, as a practical expedient are reported outside the fair value hierarchy but are included in the total assets for reporting and reconciliation purposes.

Items Measured at Fair Value on a Recurring Basis

Derivative instruments - The Company uses derivative financial instruments, “derivatives”, to mitigate the market risk that occurs from its exposure to changes in interest and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial risk policy. The derivatives outstanding as of June 30, 2021 were foreign exchange swaps. All swaps principally match the terms and maturity of the underlying obligation and no swaps have a maturity beyond six months. All derivatives are recognized in the unaudited condensed consolidated financial statements at fair value. Certain derivatives are from time to time designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria. For certain other derivatives hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest and foreign exchange rates. The Company’s derivatives are classified as Level 2 of the fair value hierarchy and there were no transfers between the levels during this or comparable periods.

Financial Statement Presentation

The Company enters into master netting agreements, International Swaps and Derivatives Association (ISDA) agreements with all derivative counterparties. The netting agreements allow for netting of exposures in the event of default or breach of the counterparty agreement. The fair values in the Condensed Consolidated Balance Sheets have been presented on a gross basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s Condensed Consolidated Balance Sheet. The notional value of the derivatives not designated as hedging instruments was $223 million as of June 30, 2021 and $179 million as of December 31, 2020. As of June 30, 2021, derivatives not designated as

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hedging instruments was an asset of $3 million, and as of December 31, 2020, the derivatives not designated as hedging instruments was an asset of $1 million. There were no derivatives designated as hedging instruments.

Gains and losses on derivative financial instruments reported in Other non-operating items, net in the unaudited Condensed Consolidated Statements of Operations, for the three months ended June 30, 2021 and 2020, were a gain of $2 million and a loss of less than $1 million, respectively, and for the six months ended June 30, 2021 and 2020, were a gain of $4 million and a gain of $2 million, respectively.

Items Measured at Fair Value on a Non-Recurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets. VBS assets and liabilities classified as held for sale and the related impairment as of June 30, 2020 were measured using third party sales pricing to determine fair values of the assets. See Note 5 "Divestiture and held for sale" for additional information.

Note 9. Income Taxes

The income expense for the three and six month periods ended June 30, 2021 was $4 million and $9 million, respectively. The income expense for three and six month periods ended June 30, 2020 was $2 million and $26 million, respectively. There were no discrete items in the three and six month periods ended June 30, 2021. Discrete items, net were a benefit of $1 million and expense of $20 million for the three and six month periods ended June 30, 2020, respectively. The discrete item in the six month period ended June 30, 2020 was primarily related to the tax impact of the divestiture of VNBS. Veoneer's effective tax rate differs from an expected statutory rate primarily due to the discrete item and losses in certain jurisdictions that are not benefited.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. Valuation allowances have been established for the Company’s operations in United States, Sweden, France, Japan and China.

Note 10. Inventories

Inventories are stated at the lower of cost (according to first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows:

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Raw materials	$	128	$	105
Work in progress	18		14
Finished products	53		51
Inventories	199		170
Inventory valuation reserve	(42)		(36)
Total inventories, net of reserve	$	157	$	134

Note 11. Equity Method Investment

As of June 30, 2021, the Company has two equity method investments.

Zenuity

On April 2, 2020, the Company entered into a non-binding agreement with VCC to separate Zenuity, a 50% ownership joint venture with VCC in order for each company to drive their respective strategies more effectively. The parties entered into definitive agreements and effected the separation on July 1, 2020.

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On July 1, 2020, the Company finalized the split of Zenuity. As part of the transaction the Company paid approximately $37 million to Zenuity for 200 software engineers and two business units located in Germany and the US. Veoneer acquired the right to use Zenuity's intellectual property for a total consideration of SEK 1,067 million (approximately $114 million) which was settled against dividend receivable of SEK 1,067 million (approximately $114 million). The remaining value of that equity investment is zero.

As the transaction was between the investor and investee, the Company did not recognize any gain from the transaction.

Following completion of the transaction, Veoneer and VCC continue to each own 50% of Zenuity AB. The joint venture was not dissolved as part of the transaction but continues as a holding company that owns the Zenuity's intellectual property.

During the first quarter of 2021, the Company received a dividend of SEK 108 million (approximately $13 million) in cash (representing 50%, with the remainder received by VCC) from Zenuity. In addition, the Company received a dividend of SEK 1,067 million (approximately $127 million) which was settled net against Related party short-term and long-term debt related to Zenuity's intellectual property that Veoneer acquired the right to use as part of the separation of Zenuity.

During the first quarter of 2020, Veoneer contributed SEK 150 million (approximately $16 million) in cash (representing 50% of the total contribution, with the remainder made by VCC) into Zenuity to support its future operating cash flow needs.

AutotechFund I, L.P.

The Company has an investment interest with Autotech Fund I, L.P of less than 20% which is accounted for under the equity method as the Company’s beneficial ownership interest in Autotech is similar to partnership interest.

On June 30, 2017, Veoneer committed to make a $15 million investment in Autotech pursuant to a limited partnership agreement, and as a limited partner, will periodically make capital contributions toward this total commitment amount. As of June 30, 2021 and December 31, 2020, Veoneer has contributed a total of $13 million to the fund. As of June 30, 2021 the Company has received a distribution of $3 million from the fund.

The carrying amounts reflected in the Condensed Consolidated Balance Sheet as of June 30, 2021 in equity method for the AutoTech approximates its fair value as of March 31, 2021, as this is the most recent information available to the Company at this time.

The profit and loss attributed to the investments is shown in the line item Gain (loss) from equity method investment in the unaudited Condensed Consolidated Statements of Operations. Veoneer’s share of Zenuity and AutoTech for the three and six month periods ended June 30, 2021 was a gain of $1 million and of $8 million, respectively. Veoneer’s share of Zenuity and AutoTech for the three and six month periods ended June 30, 2020 was a loss of $19 million and $38 million, respectively.

As of June 30, 2021 and December 31, 2020, the Company’s equity investment in Zenuity and Autotech amounted to $18 million and $153 million, respectively, after consideration of foreign exchange rate movements. The value of Zenuity investment as of June 30, 2021 is zero.

Note 12. Accrued Expense

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Operating related accruals	$	62	$	70
Employee related accruals	81		102
Customer pricing accruals	17		20
Product related liabilities1	18		19
Other accruals	22		21
Total Accrued Expenses	$	200	$	232

1 As of June 30, 2021 and December 31, 2020, $9 million and $9 million, respectively, of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

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Note 13. Retirement Plans

Defined Benefit Pension Plans

The Company’s net periodic benefit costs for plans for the three and six months ended June 30, 2021 and 2020 were as follows:

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Service cost	$	1	$	1	$	2	$	2
Interest cost	1		1		1		1
Expected return on plan assets	(1)		(1)		(1)		(1)
Net periodic benefit cost	$	1	$	1	$	2	$	2

The service cost and amortization of prior service cost components are reported among employee compensation costs in the unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported in Other non-operating items, net in the unaudited Condensed Consolidated Statements of Operations.

Note 14. Stock Incentive Plan

The Veoneer, Inc. 2018 and 2021 Stock Incentive Plan was established and effective on June 29, 2018 and May 10, 2021, respectively, to govern the Company’s stock-based awards that will be granted in the future. The Veoneer, Inc. 2018 and 2021 Stock Incentive Plan authorizes the grant of 3 million and 13 million shares, respectively, of Veoneer common stock for future equity awards to Veoneer employees and non-employee directors and authorizes up to 1.5 million additional shares to be used for the conversion of outstanding Autoliv stock awards in connection with the spin-off of the Company by Autoliv, Inc. on June 29, 2018 (the “Spin-Off”). Approximately 1 million shares were used for the conversion of the outstanding grants. As of May 10, 2021, all future awards will be granted under the 2021 Stock Incentive Awards and no further awards may be granted under the 2018 Stock Incentive Plan.

During the six months ended June 30, 2021 under the Company’s 2018 long-term incentive (LTI) program, certain employees received restricted stock units (RSUs) without dividend equivalent rights and performance shares (PSs) without dividend equivalent rights. The allocation between RSUs and PSs was 203,439 RSUs and 182,272 PSs at 100% target.

During the six months ended June 30, 2021 under the Company’s 2021 LTI program, certain non-employee directors received restricted stock units (RSUs) with dividend equivalent rights of 36,841.

The majority of the RSUs granted will vest on the third anniversary of the grant date, subject to the grantee’s continued employment with the Company on the vesting date and acceleration of vesting in certain circumstances. The fair value of RSUs and PSs granted in 2021 were calculated by using the closing stock price on the grant dates. The grant date fair value for the RSUs and PSs, granted in 2021 was $14 million.

PSs granted in 2021 may be earned during the first quarter of 2024, upon the Compensation Committee’s certification of achievement of the applicable performance goals. The grantee may earn 0%-200% of the target number of PSs based on the Company’s achievement of specified targets related to the Company’s gross margin for the applicable performance period. Each PS represents a promise to transfer a share of the Company’s common stock to the employee following completion of the performance period, provided that the performance goals mentioned above are met and provided, further, that the grantee remains employed through the performance period, subject to certain limited exceptions.

Veoneer recognized total stock (RSUs, PS and Stock Options) compensation cost of $3 million and $5 million for the three and six month periods ended June 30, 2021, respectively. During the three and six month periods ended June 30, 2020, the Company recorded $2 million and $4 million, respectively.

Note 15. Contingent Liabilities

Legal Proceedings

Various claims, lawsuits and proceedings are pending or threatened against the Company, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not

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have a material adverse impact on the condensed consolidated financial position of Veoneer, but the Company cannot provide assurance that Veoneer will not experience material litigation, product liability or other losses in the future.

Product Warranty, Recalls, and Intellectual Property

Veoneer is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such (actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage, the Company may also face product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product (or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall practices. A warranty, recall or product-liability claim brought against the Company in excess of its insurance may have a material adverse effect on the Company’s business. Vehicle manufacturers are also increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the repair or replacement costs of products when the product supplied did not perform as represented by the Company or expected by the customer. Accordingly, the future costs of warranty claims by customers may be material. However, the Company believes its established reserves are adequate. Veoneer’s warranty reserves are based upon the Company’s best estimates of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves, and adjusts them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company’s recorded estimates.

In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new orders, which may have a material impact on the Company’s results of operations.

The Company carries insurance for potential recall and product liability claims at coverage levels based on the Company’s prior claims experience. Veoneer cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in the Company’s businesses, now or in the future, or that such coverage always will be available should the Company, now or in the future, wish to extend, increase or otherwise adjust the Company’s insurance.

In its products, the Company utilizes technologies which may be subject to intellectual property rights of third parties. While the Company does seek to procure the necessary rights to utilize intellectual property rights associated with its products, it may fail to do so. Where the Company so fails, the Company may be exposed to material claims from the owners of such rights. Where the Company has sold products which infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result thereof. Such claims could be material.

Product Related Liabilities

The Company records liabilities for product related risks when probable claims are identified and when it is possible to reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products, and volume of the products sold. The provisions are recorded on an accrual basis.

The table below summarizes the change in product related liabilities in the unaudited Condensed Consolidated Balance Sheet.

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Reserve at beginning of the period	$	18	$	18	$	19	$	15
Change in reserve	2		1		2		6
Cash payments	(2)		(1)		(3)		(3)
Reserve at end of the period	$	18	$	18	$	18	$	18

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For the three and six month periods ended June 30, 2021 and 2020, cash paid primarily relates to warranty related issues. Agreements entered into between Autoliv and Veoneer in connection with the Spin-Off provide for Autoliv to indemnify Veoneer for certain liabilities related to electronics products manufactured before April 1, 2018. As of June 30, 2021 and December 31, 2020, $9 million of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

Note 16. Loss per share

Basic loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted loss per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted loss per share for the three month periods ended June 30, 2021 and 2020.

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions, except per share amounts)	2021		2020		2021		2020
Numerator:
Basic and diluted:
Net loss attributable to Veoneer	$	(100)	$	(90)	$	(205)	$	(322)
Denominator:
Basic: Weighted average number of shares outstanding (in millions)	111.84		111.58		111.77		111.52
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1	111.84		111.58		111.77		111.52
Basic loss per share	$	(0.89)	$	(0.80)	$	(1.83)	$	(2.89)
Diluted loss per share	$	(0.89)	$	(0.80)	$	(1.83)	$	(2.89)

1 Shares in the diluted loss per share calculation represent basic shares due to the net loss.

In periods when the Company has a net loss, equity incentive awards are excluded from the Company's calculation of earnings per share as their inclusion would have an anti-dilutive effect. The Company excluded equity incentive awards of 762,418 and 798,616 shares for the three and six month periods ended June 30, 2021, respectively, and 866,008 and 649,349 for the three and six month periods ended June 30, 2020, respectively, from the diluted loss per share calculations.

The Company may settle the conversion of the Notes in cash, shares of the Company's common stock or any combination thereof at its election. For the Notes, the number of shares of the Company's common stock issuable at the conversion price of $22.3125 per share would be 9,277,305 shares if the Company elected to settle the conversion wholly in shares. See Note 6 "Debt" for more information. Due to anti-dilutive effects, the Company excluded potential convertible shares due under the Notes of 9,277,305 for the three and six month periods ended June 30, 2021 and 2020 from the diluted loss per share calculations.

Note 17. Segment Information

Financial results for the Company's reportable segment have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's Chief Operating Decision Maker (CODM) in allocating resources and in assessing performance.

The Company has one reportable segment, which includes the Company’s electronics resources and expertise in passive safety electronics and active safety.

The Company previously had two operating segments - Electronics and Brake Systems. The Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold on August 10, 2020. The remaining Brake Systems business is no longer a reportable segment due to immateriality.

The accounting policies for the reportable segment are the same as those described in Note 2 "Summary of Significant Accounting Policies" included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

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Loss Before Income Taxes	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Electronics	$	(76)	$	(29)	$	(161)	$	(123)
Brake Systems	—		(20)		—		(33)
Segment operating loss	(76)		(49)		(161)		(156)
Corporate and other	(16)		(15)		(35)		(30)
Loss on divestiture and assets impairment charge, net	—		—		—		(67)
Interest and other non-operating items, net	(5)		(5)		(8)		(4)
Gain (loss) from equity method investment	1		(19)		8		(38)
Loss before income taxes	$	(96)	$	(88)	$	(196)	$	(295)

Note 18. Relationship with Former Parent and Related Entities

Transactions with Related Parties

Veoneer and Autoliv entered into transition service agreements in connection with the Spin-Off under which certain services are provided by Autoliv to Veoneer and certain services are provided by Veoneer to Autoliv. For the three and six month periods ended June 30, 2021, the Company recognized zero of expense under the agreements and less than $1 million for the three and six month period ended June 30, 2020. For the three and six month period ended June 30, 2021, the Company recognized zero of income under the TSA and less than $1 million of income for the three and six month period ended June 30, 2020.

Throughout the periods covered by the unaudited condensed consolidated financial statements, Veoneer sold finished goods to Autoliv and Related Party sales amounted to $20 million and $41 million for the three and six month periods ended June 30, 2021, respectively, and $11 million and $30 million for the three and six month periods ended June 30, 2020, respectively.

Related Party Balances

Amounts due to and due from related parties are summarized in the below table:

Related Party	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Related party receivable	$	8	$	9
Related party payables	1		2
Related party short-term debt	—		16
Related party long-term debt	—		115

Related party receivables are mainly driven by reseller agreements put in place in connection with the Spin-Off. The reseller agreements are between Autoliv and Veoneer and facilitate the temporary arrangement of the sale of Veoneer products manufactured for certain customers for a limited period after the Spin-Off. Autoliv collects the customer payments and remits the payments to Veoneer.

Note 19. Factoring

The Company receives bank notes generally maturing within six months from certain of its customers in China to settle trade accounts receivable. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash.

For the six months ended June 30, 2021 and 2020, the Company has entered into arrangements with financial institutions and sold $117 million and $23 million, respectively, of trade receivables without recourse and $31 million and $6 million, respectively, of bank notes without recourse, which qualify as sales as all rights to the trade and notes receivable have passed to the financial institution.

As of June 30, 2021, the Company had $1 million of trade notes receivables, which remain outstanding and will mature within the second half of 2021. The collections of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature.

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Note 20. Subsequent Events

On July 22 2021, Magna International Inc. and Veoneer Inc. announced that they have entered into a definitive merger agreement under which Magna will acquire Veoneer, a leader in automotive safety technology. Pursuant to the agreement, Magna will acquire all of the issued and outstanding shares of Veoneer for $31.25 per share in cash, representing an equity value of $3.8 billion, and an enterprise value of $3.3 billion, inclusive of Veoneer’s cash, net of debt and other debt-like items as of March 31, 2021.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations, financial condition and cash flows of Veoneer, Inc. (“Veoneer,” the “Company,” “we,” or “our”). This MD&A should be read in conjunction with the financial statements and accompanying notes to the financial statements included elsewhere herein, as well as the risk factors and other disclosures made in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 19, 2021.

Introduction

The following MD&A is intended to help you understand the business operations and financial condition of the Company. This MD&A is presented in the following sections:

•Executive Overview

•COVID-19 and Semiconductor Supply Commentary

•2021 Outlook

•Trends, Uncertainties and Opportunities

•Market Overview

•Results of Operations

•Non-U.S. GAAP Financial Measures 

•Liquidity and Capital Resources

•Off-Balance Sheet Arrangements and Other Matters

•Contractual Obligations and Commitments

•Significant Accounting Policies and Critical Accounting Estimates

Veoneer is a global leader in the design, development, manufacture, and sale of automotive safety electronics with a focus on innovation, quality and manufacturing excellence. The Company’s current product offerings include automotive radars, mono and stereo vision cameras, night vision systems, positioning systems, advanced driver assist systems ("ADAS") electronic control units, passive safety electronics (airbag control units and crash sensors), brake control systems and a complete ADAS software offering towards highly automated driving ("HAD") and eventually autonomous driving, through its recently formed software unit and brand Arriver. In addition, we offer driver monitoring systems, LiDAR sensors, RoadScape positioning and other technologies critical for HAD and automated driving ("AD") solutions by leveraging our partnership network and internally developed intellectual property.

In May 2021, we implemented an organizational refinement to drive Veoneer from a regional-based organization toward a product-based product organization. This refinement will allow the Company to better focus on execution, innovation and product development. This change did not affect Veoneer's financial reporting structure.

Executive Overview

On July 22, 2021 Veoneer entered into a definitive merger agreement under which Magna will acquire the Company. The Company's Board of Directors believes this is a compelling transaction for our shareholders and all of our stakeholders. It will deliver significant and immediate value to Veoneer stockholders and reflects an attractive premium to our trading price and provides new opportunities for our employees to join one of the most capable suppliers in the mobility space. The plan is to finalize the agreement in the coming months and we will provide timely updates as the process progresses.

For the quarter, we were pleased with the Company''s performance during a challenging period. Despite the uncertainty created by supply disruptions, the COVID-19 pandemic and sequentially lower light vehicle production leading to lower sales, the Company improved its gross profit and operating loss as well as its cash flow. These improvements were achieved through the progress of our on-going market adjustment initiatives, and we expect continuous progress throughout 2021 as sales increases and the results of the efficiency programs are expected to keep our costs at near planned levels.

Planned launches are on track, although the positive volume effects are somewhat held back by the short-term fluctuations in OEM demand. During the quarter we had five key launches, four out of which were Active Safety launches that will start to contribute to our expected strong organic sales growth in the quarters and years to come. The launch of the Geely EMA was especially significant for Veoneer as we are a full system and integration supplier to the vehicle. This is a flagship program for the Company, highlighting the strength of our vision, radar, ECU and software capabilities. It further highlights the current

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momentum the Company has in China where among other customer wins we signed yet another new customer for our vision technology.

The Company's order intake developed better in the quarter than what we expected, due in part to new opportunities that we were able to capture and partly due to orders expected in the third quarter materializing already in the second quarter. We won orders across most products areas, highlighting the strength of our current product portfolio. With this positive development we are well on track to reach higher order levels in 2021 as compared to 2020.

The first Arriver perception and drive policy software running on the Qualcomm Snapdragon Ride platform has now been demonstrated in-vehicle to potential customers with encouraging initial feedback, a true milestone. During the quarter the Volvo XC40 Recharge, which runs the current generation of Arriver software, was picked as "Top Safety Pick+" by the Insurance Institute for Highway Safety in the United States, another proof point that we are on track to create a leading global challenger for Active Safety systems and software.

These developments are the result of the strong execution of the entire Veoneer team.

COVID-19 and Semiconductor Supply Commentary

Veoneer is working to minimize the impact of the supply constraints in semiconductors. The supply constraints are likely to remain into the second half of 2021 although we do expect a gradual recovery to take place. Currently it is hard to predict the pace of the recovery, but as underlying consumer demand continues to look strong, we anticipate a strong if not full recovery during the second half of the year, particularly in the fourth quarter, as vaccination programs eases the constraints from COVID-19 and the semiconductor industry starts to catch up with demand. These assumptions are taken into account in our full year 2021 outlook.

For 2021 and the upcoming years, the most important driver for Veoneer’s business is new customer and technology launches, which should drive significant out-performance as compared to the global LVP.

As noted in our 2020 full year results and first quarter 2021 results, in response to the pandemic, the Company continues to expand its MAIs to further mitigate the impact of the pandemic on its cash flow and operating results. As part of the MAIs, during the first half of 2021 the Company undertook certain restructuring activities, recording restructuring expenses of approximately $5 million, impacting certain engineering and administrative functions.

The COVID-19 pandemic continues to cause significant uncertainty in the global economy. This includes the automotive industry and the global LVP for 2021 and the upcoming years ahead, which are dependent on underlying consumer demand. Simultaneously and triggered by the COVID-19 pandemic, the automotive industry, like other industries dependent on semiconductors, is experiencing challenges in the supply of semiconductors.

Our OEM customers continue to recover to more normal volumes, or higher than normal volumes in certain countries, and in the first half of 2021, we have returned to higher production levels as well. The health and safety of our associates continues to be our first priority, and we are taking the necessary actions to continue to protect our associates, safeguard our operations and meet our customers' needs while managing through these unprecedented circumstances.

2021 Outlook

The macro-economic environment remains very uncertain, mainly due to the global supply chain challenges created as a result of the COVID-19 pandemic. These global supply chain shortages have led multiple OEM customers to reduce their production schedules on short notice, which in turn makes the global LVP very difficult to forecast.

For the full year 2021, we expect our organic sales growth (non.U.S. GAAP measure) to exceed 25% and a currency translation, net increase of 4%, both as compared to 2020. Also for full year 2021, we estimate Active Safety organic sales growth to be in the range of 40-45%. We anticipate positive leverage on this organic sales growth (non.U.S. GAAP measure) during 2021 to improve our gross margin.

The RD&E, net run rate is expected to be in the range of $110 to $120 million per quarter, while capital expenditures and depreciation are expected to be approximately $100 million and $115 million, respectively, for the full year 2021. As a result of these underlying assumptions, we expect our operating loss for the full year 2021 to improve as compared to 2020, and we expect our cash balance to be more than $400 million at 2021 year-end. We also expect our operating loss and cash flow performance to improve sequentially during 2021.

Veoneer expects its order intake to increase in 2021 as compared to 2020.

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Trends, Uncertainties and Opportunities

Trend toward Collaborative Driving

The environment around us continues to change rapidly and we currently see a shift across the automotive and autotech industries. The industry developments during 2021 have further strengthened the trend toward advanced driver support - Collaborative Driving - and away from fully autonomous cars for the consumer based vehicle mass market.

New technologies, creating new levels of interaction and driver support are starting to revolutionize driving, but we also see the driver being actively involved for many years to come. While the industry refers to “Level 2+” or even "Level 2++" Veoneer calls this Collaborative Driving, and includes any SAE level of automation up to Level 4. Currently there are renewed initiatives in the industry for Level 3 conditional automation where the driver for certain periods of time can be out of loop, but has to be ready to take control of the vehicle at any time. At the same time there is a growing realization that the introduction of truly self-driving cars will likely take longer and be more expensive than previously anticipated. This fundamental insight opens up new opportunities for companies, including Veoneer, but it also requires adjusting the priorities of resources. As such, we believe that the market will stay mainly focused on Level 1-Level 2+ and Level 3 autonomous driving solutions for the next decade however, while we see a continued strong drive toward more automation and driver support, the ongoing impacts from the COVID-19 pandemic, and perhaps ongoing impact, could affect the evolution of ADAS, Collaborative Driving and AD for consumer purchased light vehicles.

Global Regulatory and Test Rating Developments

Europe continues to take a proactive role in promoting or requiring Active Safety technologies. The European New Car Assessment Program (“NCAP”) continuously updates its test rating program to include more active safety technologies to help the European Union reach its target of cutting road fatalities by 50% by 2030, as compared to 2020. In order to help our industry to overcome the situation with respect to the COVID-19 pandemic Euro NCAP postponed the rollout of upcoming road map updates by one year (from 2022 to 2023 and from 2024 to 2025). However, this should not change the overall trend towards introduction of new roadmap requirements, which are just delayed by one year.

On June 26, 2020, the UNECE’s World Forum for Harmonization of Vehicle Regulations, announced the first binding international regulation on “Level 3” vehicle automation. The new regulation marks an important step towards the wider deployment of automated vehicles to help realize a vision of safer, more sustainable mobility for all. Beginning in January 2021 the regulation provides guidelines on the Automated Lane Keep System ("ALKS") feature, requires driver availability recognition systems, and a "black box" data storage system for AD. It also outlines requirements for emergency and minimal risk maneuvers and driver transition demand as well as cyber-security and software update protocols.

We anticipate strong global sensor adoption rate increases (forward, side and rear) due to the Euro NCAP's push for crash avoidance, increased adoption rates due to growing demand around ADAS software features, volume growth due to redundant sensing concepts needed for higher levels of autonomy, potential opportunities in relation to compliance with cybersecurity and software updates and step-by-step increased demand for connectivity components. The ongoing 2020x-decade will be characterized by stepwise introduction of regulations which boost the market of Active Safety and Automation, but also set obligatory thresholds for safety.

a.At first minimal requirements for safety critical features (e.g. AEB) will become mandatory.

b.Continued with a framework for advanced L1-L3 features in highway applications, extending conventional certification towards new assessment methods (including Physical Tests + Real World Test Drive + Simulation, etc.).

c.Followed by regulations enabling use of higher level automation (e.g. L4 shuttles) and more complex environment (e.g. urban)

d.In parallel, we will face increasing regulatory requirements for cybersecurity and software updates in order to reflect advancing digitalization and connectivity.

An example of a recent development that further strengthens the trend toward collaborative driving, is Intelligent Speed Assist (ISA) an item of updated EU General Safety Regulation roadmap, which was finalized on June 23, 2021. The ISA is a system that prompts and encourages drivers to slow down when they are over the speed limit. New regulation mandates motor vehicles to be equipped with ISA systems beginning July 6, 2022 for new vehicle types and beginning July 7, 2024 for all new vehicles.

In several regions legal approval of the introduction of new technologies happens as exceptional procedure on national level. However, we have recently observed an increasing willingness of legislators in the US and Asia to contribute to the global regulatory framework for AV-technologies. This means that, while the agreement on minimal common base requirements for

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the industry will take longer and therefore may postpone the introduction of new regulations, the harmonization with base requirements could help the industry and a more active position from China may help to pull forward some safety critical ADAS technologies that are not yet considered as relevant for passenger car regulation in EU and Japan (e.g. Blind Spot or Night Vision).

Market Overview

Millions (except where specified) IHS Markit as of July 16, 2021	Light Vehicle Production by Region - 2021
	China		Japan		Rest of Asia		Americas		Europe		Other		Total
Second Quarter 2021	5.5		1.8		2.5		3.6		4.2		0.5		18.1
Change vs. 2020	(3.0)	%	52.5	%	102.8	%	152.0	%	86.5	%	64.2	%	50.0	%

For the second quarter of 2021, the global light vehicle production (according to IHS Markit) increased by approximately 50.0% mainly due to the global outbreak of the COVID-19 pandemic in 2020. Every major vehicle producing geography was still impacted by the pandemic including: China (3.0)%, Europe 86.5%, South Korea 10.9%, North America 152.0% and Japan 52.5%.

Millions (except where specified) IHS as of July 16, 2021	Light Vehicle Production by Region - 2021
	China		Japan		Rest of Asia		Americas		Europe		Other		Total
Full Year 2021	23.5		8.0		11.2		16.2		17.9		2.1		78.9
Change vs. 2020	6	%	5	%	17	%	14	%	9	%	19	%	10	%

For the first half year of 2021, global light vehicle production (according to IHS Markit) is expected to decline by approximately 10%, due the anticipated full year effects of the COVID-19 pandemic. All major vehicle producing geographies are expected to be impacted by the pandemic including: China 6%, Europe 9%, South Korea 5%, North America 14% and Japan 5%. The global LVP of approximately 78.9 million is at the same level as 2012.

Results of Operations

Three Months Ended June 30, 2021 as compared to Three Months Ended June 30, 2020

The following analysis illustrates Veoneer’s overall and by segment performance for the three months ended June 30, 2021 and 2020 along with components of change as compared to the prior year.

Net Sales by Product

The following tables illustrate Veoneer’s consolidated net sales by product for the three months ended June 30, 2021 and 2020 along with components of change as compared to the prior year.

Net Sales	Three Months Ended June 30								Components of Change vs. Prior Year
(Dollars in millions, except where specified)	2021		2020		US GAAP Reported Change				Currency				Organic1
	$		$		$		%		$		%		$		%
Restraint Control Systems	175		100		75		75		7		7	%	68		68	%
Active Safety	197		79		118		149		8		9	%	110		140	%
Brake Systems	13		5		8		145		—		—		8		145	%
Other	$	13	$	—	$	13	—		$	—	—		$	13	—
Total	$	398	$	184	$	214	116	%	$	15	8	%	$	199	108	%

1 Non-U.S. GAAP measure reconciliation for Organic Sales

Net Sales - Veoneer’s net sales for the quarter of $398 million increased by 116% as compared to the same quarter in 2020. The organic sales1 increased by 108% and the net currency translation effects were positive by 8%. Given that the LVP growth expectations declined by around 10pp from IHS April to July reports, sales were lower than our expectations from the beginning of the quarter. Veoneer outperformed the LVP in all regions, except rest of Asia which accounts for only around 5% of net sales.

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According to IHS, the global LVP increased 50% for the quarter as compared to 2020. This increase was primarily driven by North America, Europe and Japan. It was a reversal from Q1 where growth was driven by China. These developments led to a sequentially significantly improved regional mix for Veoneer.

Restraint Control Systems - Net sales for the quarter of $175 million increased by 75% as compared to 2020. The organic sales growth of 68%, was primarily driven by North America and Europe, but all regions saw organic sales growth as a result of new program launches, primarily during the second half of 2020.

Active Safety - Net sales for the quarter of $197 million increased by 149% as compared to 2020. The organic sales increase was 140%. The strong growth was primarily driven by an intense launch period which started in Q1 2020 and will continue throughout 2021. China saw the strongest relative growth during the quarter, indicating the start of an industry wide ramp up phase for Active Safety in that region.

Strong volume demand for mono, stereo and thermal camera systems, radar and ADAS ECUs on several models, and across multiple customers drove the increase in organic sales. The recovery in radar sales continues, this was the third consecutive growth quarter which indicates continued successful transition to 77GHz radars.

Brake Systems and Other - The combined net sales for the quarter was $26 million. The Brake Systems sales of $13 million are related to the Honda legacy business and $13 million of Other sales are Brake ECUs to ZF.

Electronics Segment	Three Months Ended June 30										Components of Change vs. Prior Year
(Dollars in millions, except where specified)	2021			2020			US GAAP Reported Change				Currency				Organic1
	$	%		$	%		$		%		$		%		$		%
Net Sales	385			179			$	206	115	%	$	15	8	%	$	191	107	%
Operating Loss / Margin	-76	(20)	%	-29	(16)	%	$	(47)
Segment EBITDA1 / Margin	-48	(12)	%	-6	(3)	%	$	(42)
Associates	7,170			6,705			465

1 Non-U.S. GAAP measure reconciliation for Organic Sales and Segment EBITDA

Net Sales - Net sales for the Electronics segment increased by $206 million to $385 million for the quarter as compared to 2020. This sales increase was mainly due to the organic sales1 increase in Restraint Control Systems and Active Safety of $68 million and $110 million, respectively.

Operating Loss - Operating loss for the Electronics segment of $76 million for the quarter decreased by $47 million as compared to 2020. This decrease is mainly due to the RD&E, net underlying improvement related to lower gross costs.

EBITDA1 - EBITDA loss for the Electronics segment decreased by $42 million to negative $48 million for the quarter as compared to 2020. This change is mainly due to the operating loss improvement for the segment.

Associates - Associates, net in the Electronics segment increased by 465, net to 7,170 as compared to 2020, mainly due to a net increase in direct associates of more than 358.

Deliveries - Deliveries during the quarter were 3.5 million units for Restraint Controls Systems and 2.3 million units for Active Safety.

Corporate and Other	Three Months Ended June 30
(Dollars in millions, except where specified)	2021				2020				US GAAP Reported Change
	$		%		$		%		$		%
Net Sales	$	13			$	—			$	13	—	%
Operating Loss / Margin	$	(16)	(115)	%	$	(15)	—	%	$	(1)
EBITDA1 / Margin	$	(15)	(111)	%	$	(15)	—	%	$	—
Associates	132				40				92

1 Non-U.S. GAAP measure reconciliation for EBITDA

Net Sales - Net Sales of $13 million for the first quarter reflects the legacy Honda Brake Systems business after the VBS-US divestiture.

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Associates - Associates, net increased by 92 to 132 for the quarter as compared to 2020 due to the associates now included in Corporate and Other related to supporting the legacy Honda Brake Systems business.

Operating Loss and EBITDA1 - Operating and EBITDA loss of $15 million is unchanged compared to 2020.

Veoneer Performance

Income Statement	Three Months Ended June 30
(Dollars in millions, except per share data)	2021				2020
	$		%		$		%		Change
Net sales	$	398			$	184			$	214
Cost of sales	(336)		(84.4)	%	(181)		(98.1)	%	(155)
Gross profit	$	62	15.6	%	$	3	1.9	%	$	59
Selling, general & administrative expenses	(41)		(10.3)	%	(38)		(20.6)	%	(3)
Research, development & engineering expenses, net	(108)		(27.1)	%	(44)		(24.1)	%	(64)
Amortization of intangibles	(2)		(0.5)	%	(1)		(0.7)	%	(1)
Other income, net	(3)		(0.8)	%	16		8.7	%	(19)
Operating loss	$	(92)	(23.1)	%	$	(64)	(34.8)	%	$	(28)
Loss on divestiture and assets impairment charge, net	—		0.0	%	—		0.0	%	—
Gain (loss) from equity method investments	1		0.4	%	(19)		(10.6)	%	20
Interest income	1		0.1	%	3		1.4	%	(2)
Interest expense	(5)		(1.3)	%	(5)		(2.8)	%	—
Other non-operating items, net	(1)		(0.1)	%	(3)		(1.4)	%	2
Loss before income taxes	$	(96)	(24.0)	%	$	(88)	(47.6)	%	$	(8)
Income tax benefit (expense)	(4)		(1.2)	%	(2)		(1.1)	%	(2)
Net loss1	$	(100)	(25.2)	%	$	(90)	(48.6)	%	$	(10)
Less: Net gain (loss) attributable to non-controlling interest	—		0.0	%	—		0.0	%	—
Net loss attributable to controlling interest	$	(100)	(25.2)	%	$	(90)	(48.6)	%	$	(10)
Net loss per share – basic2	$(0.89)				$(0.80)				$(0.09)
Weighted average number of shares outstanding 2	111.84				111.58				0.26

1 Including Corporate and other sales.

2 Basic number of shares in millions used to compute net loss per share. Participating share awards without right to receive dividend equivalents are (under the two-class method) excluded from EPS calculation.

Gross Profit - Gross profit for the quarter of $62 million was $59 million higher as compared to 2020. The YoY improvement was mainly driven by the volume improvements resulting from the impact of the COVID-19 pandemic in 2020, along with the continued benefits from the Market Adjustment Initiatives (MAI). These positive effects were partly mitigated by higher costs related to supply constraints of approximately $4 million. The currency impact was $7 million.

Operating Loss - Operating loss for the quarter of $92 million increased by $28 million as compared to 2020, this primarily related to the above normal engineering reimbursements in the second quarter of 2020. Sequentially the operating loss improved by $12 million mainly due to the MAIs. Net currency effects were $5 million favorable.

RD&E, net of $108 million increased by $64 million for the quarter as compared to 2020, mainly as a result of reimbursements of $81 million for previously completed work reflected in the 2020 results, which was partly offset by the effect from the brake system divestiture of $12 million. The underlying RD&E run rate improved as compared to 2020.

The SG&A expense of $41 million for the quarter increased by around $3 million as compared to 2020 reflecting around $2 million in higher run rate and $1 million in temporary costs.

Other expense net of $3 million were related to restructuring costs during the quarter.

Net Loss - Net loss for the quarter of $100 million increased by $10 million as compared to 2020.

The interest, net and other non-operating items, net combined for the quarter of $5 million, remain unchanged as compared to 2020.

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Income tax expense of $4 million for the quarter was $2 million higher as compared to 2020. There were no discrete tax items during the quarter

Loss per Share - The loss per share of $0.89 for the quarter increased by $0.09 per share as compared to a loss of $0.80 per share as compared to the same quarter of 2020.

Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020

The following analysis illustrates Veoneer’s overall and by segment performance for the six months ended June 30, 2021 and 2020 along with components of change compared to the prior year.

Net Sales by Product

The following tables illustrate Veoneer’s consolidated net sales by product for the six months ended June 30, 2021 and 2020 along with components of change compared to the prior year.

Net Sales	Six Months Ended June 30								Components of Change vs. Prior Year
(Dollars in millions, except where specified)	2021		2020		US GAAP Reported Change				Currency				Divestiture				Organic1
	$		$		$		%		$		%		$		%		$		%
Restraint Control Systems	364		262		102		39	%	16		6	%	—		—	%	86		33	%
Active Safety	402		241		161		67	%	20		9	%	—		—	%	141		58	%
Brake Systems	24		43		(19)		(43)	%	—		—	%	(24)		(57)	%	5		32	%
Other	26		—		26		—	%	—		—	%	—		—	%	26		N/A
Total	$	816	$	546	$	270	49	%	$	36	7	%	$	(24)	(4)	%	$	258	49	%

1 Non-U.S. GAAP measure reconciliation for Organic Sales

Net Sales - Veoneer’s net sales for the first half increased by 49% to $816 million as compared to 2020. The organic sales1 increased by 49%, as compared to the 29% increase in LVP for the same period. The remainder of the increase was from net currency translation effects of 7%, the impact from the brake system divestiture was $(24)million.

During the first half, the organic sales increased in North America 54%, Europe 41% and Asia 61%. The strong organic sales growth reflects the rebound from the negative COVID-19 effects in 2020 which started to affect China in the first quarter and the rest of the world in the second quarter. This strong organic growth was further driven by Veoneer's intense launch period which started in the first quarter 2020 and will continue throughout 2021.

Restraint Control Systems - Net sales for the first half of $364 million increased by 39% as compared to 2020. The organic sales increase of 33% was primarily due to the LVP increase driving higher volumes in all regions.

Active Safety - Net sales for the first half increased by 67% to $402 million as compared to 2020. This increase was primarily driven by the organic sales growth of 58%. The strong outperformance compared to the LVP was driven by all regions. Notably Active Safety in China increased by more than 700% from a low base marking the start of the ramp up phase for Active Safety in that region.

As part of Veoneer's on-going strong launch phase as well as the rebound effect from COVID-19 all product areas within Active Safety showed strong growth. Radar systems and vision contributed in particular, but also night vision and ADAS ECU's experienced strong growth based on new launches.

Brake Systems and other - Net sales for the first half increased by 16% to $50 million as compared to 2020, mainly driven by brake ECU's to ZF.

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Electronics Segment	Six Months Ended June 30									Components of Change vs. Prior Year
(Dollars in millions, except where specified)	2021			2020			US GAAP Reported Change			Currency		Organic1
	$	%		$	%		$	%		$	%	$	%
Net Sales	792			503			289	57	%	37	7	252	50	%
Operating Loss / Margin	(161)	(20.3)	%	(123)	(24.4)	%	(38)
Segment EBITDA1 / Margin	(105)	(13.2)	%	(78)	(15.5)	%	(27)
Associates	7,170			6,705			465

1 Non-U.S. GAAP measure reconciliation for Organic Sales and Segment EBITDA

Net Sales - The net sales for the Electronics segment increased by $289 million to $792 million for the first half as compared to 2020. This sales increase was mainly due to the organic sales1 increase in Active Safety and Restraint Control Systems of $141 million and $86 million, respectively, along with the currency translation effects of $37 million.

Operating Loss - The operating loss for the Electronics segment of $161 million for the first half decreased by $38 million as compared to 2020, primarily due to the higher than normal engineering reimbursements. The underlying operating performance improved year over year.

EBITDA1 - The EBITDA loss for Electronics segment increased by $27 million to negative $105 million for the first half as compared to 2020. This change is mainly due to the increase in depreciation and amortization and increase in gain from equity method investment.

Associates - Associates in the Electronics segment increased by 465 net to 7,170 as compared to the prior year, mainly due to a increase in Temporary associates due to sharp increase in organic growth reflecting the production volume increase during the second quarter.

Deliveries - The deliveries during the quarter were 7.2 million units for Restraint Controls Systems and 4.6 million units for Active.

Corporate and Other	Six Months Ended June 30
(Dollars in millions, except where specified)	2021				2020				US GAAP Reported Change
	$		%		$		%		$		%
Net Sales	$	24			$	—			$	24	#DIV/0!
Operating Loss / Margin	$	(35)	(145)	%	$	(30)	—	%	$	(5)
EBITDA1 / Margin	$	(34)	(141)	%	$	(30)	—	%	$	(4)
Associates	132				40				92

1 Non-U.S. GAAP measure reconciliation for EBITDA

Operating Loss and EBITDA1 - The operating loss and EBITDA for Corporate and other for the first half increased by $9 million to an operating loss of $35 million and EBITDA $(34) million as compared to 2020. This decrease was primarily due to increase associate related costs.

Associates - The number of associates increased by 92 to 132 from the prior year due to a increase in Temporary associates.

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Veoneer Performance

Income Statement	Six Months Ended June 30
(Dollars in millions, except per share data)	2021				2020
	$		%		$		%		Change
Net sales	$	816			$	546			$	270
Cost of sales	(698)		(85.6)	%	(490)		(89.7)	%	(208)
Gross profit	$	118	14.4	%	$	56	10.3	%	$	62
Selling, general & administrative expenses	(81)		(9.9)	%	(82)		(14.9)	%	1
Research, development & engineering expenses, net	(224)		(27.5)	%	(175)		(32.0)	%	(49)
Amortization of intangibles	(4)		(0.5)	%	(3)		(0.5)	%	(1)
Other income, net	(5)		(0.6)	%	18		3.3	%	(23)
Operating loss	$	(196)	(24.0)	%	$	(186)	(34.1)	%	$	(10)
Loss on divestiture and assets held for sales, net	—		0.0	%	(67)		(12.3)	%	67
Loss from equity method investments	8		1.0	%	(38)		(6.9)	%	46
Interest income	1		0.2	%	7		1.2	%	(6)
Interest expense	(10)		(1.3)	%	(10)		(1.8)	%	—
Other non-operating items, net	1		0.1	%	(1)		(0.1)	%	2
Loss before income taxes	$	(196)	(24.0)	%	$	(295)	(54.0)	%	$	99
Income tax benefit (expense)	(9)		(1.1)	%	(26)		(4.7)	%	17
Net loss1	$	(205)	(25.1)	%	$	(321)	(58.8)	%	$	116
Less: Net Income (loss) attributable to non-controlling interest	—		0.0	%	1		(0.3)	%	(1)
Net loss attributable to controlling interest	$	(205)	(25.1)	%	$	(322)	(59.0)	%	$	117
Net loss per share – basic2	$	(1.83)			$	(2.89)			$	1.06
Weighted average number of shares outstanding 2	111.77				111.52				0.25

1 Including Corporate and other sales. 2 Basic number of shares in millions used to compute net loss per share. Participating share awards without right to receive dividend equivalents are (under the two-class method) excluded from EPS calculation.

Gross Profit - The gross profit for the first half of $118 million was $62 million higher as compared to 2020. Higher organic sales as well as continued benefit from the MAIs were the key contributors, which more than offset the extra costs related to supply chain constraints. Net currency effects were $10 million. The brake systems divestiture impact was $(4) million.

Operating Loss - The operating loss for the first half of $196 million was $10 million higher as compared to 2020, primarily related to the above normal engineering reimbursements in the second quarter of 2020. The underlying operating performance improved year over year. Net currency effects were $(2) million and the brake systems divestiture impact was $(1) million.

The RD&E, net of $224 million increased by $49 million as compared to 2020, due to $81 million higher than normal engineering reimbursements in the second quarter of 2020, which was partly offset by the brake system divestiture impact of $27 million.

The SG&A expense of $81 million for the first half decreased by $1 million as compared to 2020 including a $1 million positive impact from the brake system divestiture.

Other income and amortization of intangibles combined were $24 million lower for the first half as compared to 2020 mainly due to the temporary positive effects from the divestiture of the brake systems joint venture in the first half of 2020 and restructuring related costs year to date of approximately $5 million.

Net Loss - The net loss for the first half of $205 million decreased by $116 million as compared to 2020, primarily due to the higher organic sales and lower net costs related to the Zenuity JV divestiture and non-cash net loss on the divestiture of the brake systems business in 2020.

The interest expense, net for the first half was $6 million higher as compared to 2020 due to lower interest income. Other non-operating items, net of $1 million improved by $2 million.

Income tax expense of $9 million for the first half was $17 million lower as compared to 2020. This is primarily due to a discrete tax expense of $22 million on the VNBS sale in 2020.

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The non-controlling interest expense was $1 million favorable as compared to 2020, when it was $(1) million, due to the brake systems divestiture.

Loss per Share - The loss per share of $1.83 for the first half decreased by $1.06 as compared to 2020, mainly due to the net loss effect mentioned above.

Non-U.S. GAAP Financial Measures

Non-U.S. GAAP financial measures are reconciled throughout this report.

In this report we refer to organic sales or changes in organic sales growth, a non-U.S. GAAP financial measure that we, investors and analysts use to analyze the Company's sales trends and performance. We believe that this measure assists investors and management in analyzing trends in the Company's business because the Company generates approximately 68% of its sales in currencies other than in U.S. dollars (its reporting currency) and currency rates have been and can be rather volatile. Organic sales and organic sales growth represent the increase or decrease in the overall U.S. dollar net sales and percentage change on a comparable basis thereby excluding any structural impacts. This facilitates separate discussions of the impact of acquisitions and divestitures and exchange rates on the Company’s performance. The tables in this report present the $ reconciliation of the changes in the total U.S. GAAP net sales to changes in organic sales growth.

The Company uses in this report EBITDA, a non-U.S. GAAP financial measure, which represents the Company’s net income excluding interest expense, income taxes, depreciation and amortization and loss from equity method investment. The Company also uses Segment EBITDA, a non-U.S. GAAP financial measure, which represents the Company’s EBITDA which has been further adjusted on a segment basis to exclude certain corporate and other items. We believe that EBITDA and Segment EBITDA are useful measures for management, analysts and investors to evaluate operating performance on a consolidated and reportable segment basis, because it assists in comparing our performance on a consistent basis. The tables below provide reconciliations of net income (loss) to EBITDA and Segment EBITDA.

The Company uses in this report net working capital, a non-U.S. GAAP financial measure, which is defined as current assets (excluding cash and cash equivalents) minus current liabilities excluding short-term debt and net assets and liabilities held for sale. The Company also uses in this report cash flow before financing activities, a non-U.S. GAAP financial measure, which is defined as net cash used in operating activities plus net cash used in investing activities. Management uses these measures to improve its ability to assess operating performance at a point in time as well as the trends over time. The tables below provide a reconciliation of current assets and liabilities to net working capital and cash flow before financing activities.

Investors should not consider these non-U.S. GAAP measures as substitutes, but rather as additions, to financial reporting measures prepared in accordance with U.S. GAAP. These measures, as defined, may not be comparable to similarly titled measures used by other companies.

Forward-looking non-U.S. GAAP financial measures used in this report are provided on a non-U.S. GAAP basis. Veoneer has not provided a U.S. GAAP reconciliation of these measures because items that impact these measures, such as foreign currency exchange rates and future investing activities, cannot be reasonably predicted or determined. As a result, such reconciliations are not available without unreasonable efforts and Veoneer is unable to determine the probable significance of the unavailable information.

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Reconciliations of U.S. GAAP to Non-U.S. GAAP Financial Measures

Net Loss to EBITDA	Three Months Ended June 30				Six Months Ended June 30				Last 12 Months		Full Year 2020
Dollars in millions	2021		2020		2021		2020
Net Loss	$	(100)	$	(90)	$	(205)	$	(321)	$	(428)	$	(544)
Loss on divestiture and assets impairment charge, net	—		—		—		67		24		91
Depreciation and amortization	29		23		57		46		114		103
(Gain)/ loss from equity method investment	(1)		19		(8)		38		(7)		39
Interest and other non-operating items, net	5		5		8		4		20		16
Income tax expense (benefit)	4		2		9		26		15		32
EBITDA	$	(63)	$	(41)	$	(139)	$	(140)	$	(262)	$	(263)

Segment EBITDA to EBITDA	Three Months Ended June 30				Six Months Ended June 30				Last 12 Months		Full Year 2020
Dollars in millions	2021		2020		2021		2020
Electronics	$	(48)	$	(6)	$	(105)	$	(78)	$	(194)	$	(167)
Brake Systems	—		(20)		—		(32)		(3)		(35)
Segment EBITDA	$	(48)	$	(26)	$	(105)	$	(110)	$	(197)	$	(202)
Corporate and other	(15)		(15)		(34)		(30)		(65)		(61)
EBITDA	$	(63)	$	(41)	$	(139)	$	(140)	$	(262)	$	(263)

Working Capital to Net Working Capital	June 30, 2021		June 30, 2020		December 31, 2020		December 31, 2019
Dollars in millions
Total current assets	$	1,035	$	1,260	$	1,244	$	1,649
less Total current liabilities	530		429		587		591
Working Capital	$	505	$	831	$	657	$	1,058
less Cash and cash equivalents	(556)		(851)		(758)		(859)
less Short-term debt	4		20		4		3
less Net of Assets and Liabilities held for sale	—		(11)		—		(199)
Net Working Capital	$	(47)	$	(11)	$	(97)	$	3

Cash Flow before Financing Activities	Three Months Ended June 30				Six Months Ended June 30				Last 12 Months		Full Year 2020
Dollars in millions	2021		2020		2021		2020
Net cash provided by (used in) Operating Activities	$	(69)	$	(107)	$	(179)	$	(116)	$	(255)	$	(192)
Plus Net cash provided by (used in) Investing Activities	(19)		(34)		(18)		99		(32)		85
Cash flow before Financing Activities	$	(88)	$	(141)	$	(197)	$	(17)	$	(287)	$	(107)

Liquidity and Capital Resources

Liquidity

As of June 30, 2021, the Company had cash and cash equivalents and restricted cash of $555 million and $1 million, respectively.

The Company's primary source of liquidity is its existing cash balance of $555 million, which will primarily be used for ongoing working capital requirements and capital expenditures. The Company believes that its existing cash resources will be sufficient to support its current operations for at least the next twelve months.

The Company has no material obligations other than short-term obligations related to operations, inventory, services, tooling, and property, plant and equipment purchased in the ordinary course of business.

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Autotech - On June 30, 2017, Veoneer committed to make a $15 million investment in Autotech Fund I, L.P. pursuant to a limited partnership agreement, and, as a limited partner, will periodically make capital contributions toward this total commitment amount. As of June 30, 2021, Veoneer contributed a total of $13 million to the fund. The initial term of the fund is set to expire on December 31, 2025. This fund focuses broadly on the automotive industry and complements the Company’s innovation strategy, particularly in the areas of active safety and autonomous driving. Under the limited partnership agreement, the general partner has the sole and exclusive right to manage, control, and conduct the affairs of the partnership.

Zenuity - During the first half of 2021, the Company received a dividend of SEK 108 million (approximately $13 million) in cash (representing 50%, with the remainder received by VCC) from Zenuity. In addition, the Company received a dividend of SEK 1,067 million (approximately $127 million) which was settled net against Related party short-term and long-term debt related to Zenuity's intellectual property that Veoneer acquired the right to use during the Zenuity split.

Cash Flows

Selected Cash flow items	Six Months Ended June 30
(Dollars in millions, except where specified)	2021		2020
Net working capital1	$	(47)	$	(11)
Net cash used in operating activities	$	(179)	$	(116)
Capital expenditures	$	(30)	$	(51)
Equity method investments	$	12	$	(26)
Net cash provided by (used in) investing activities	$	(18)	$	99
Cash flow before financing activities1	$	(197)	$	(17)
Net cash provided by (used in) financing activities	$	—	$	9

1 Non-U.S. GAAP measure, see reconciliation above

Days receivables outstanding, outstanding receivables relative to average daily sales was 52 days for June 30, 2021, as compared to 90 days at June 30, 2020. This decrease is mainly due to sharp increase in organic sales in the second quarter of 2021. Days inventory outstanding, outstanding inventory relative to average daily sales was 36 days for June 30, 2021, as compared to 66 days at June 30, 2020. This ratio decreased due to the year-over-year sales sharp increase of customer demand during the second quarter due to the rebound from the negative COVID-19 effects in 2020.

Net cash used in operating activities - Net cash used in operating activities of $179 million during the first half was $63 million higher as compared to 2020. The change was primarily driven by the net working capital change, which was partly offset by the lower net loss.

Net cash used in investing activities - Net cash used in investing activities of $18 million during the first half was $117 million lower as compared to 2020. This was mainly due to the proceeds from the VNBS divestiture of $176 million in 2020.

Cash flow before financing activities1 - The cash flow before financing activities of $(197) million for the first half was $180 million lower compared to 2020 mainly due to the VNBS divestiture.

Net Working Capital1 - The change in net working capital of negative $36 million for the first half as compared to 2020 was mainly due to the COVID-19 impact in 2020.

Capital Expenditures - Capital expenditures of $30 million for the first half decreased by $21 million as compared to 2020 mainly due to lower investments in VBS-US, facility expansions, and engineering related IT. The benefit of the VNBS-Asia divestiture was $1 million.

Cash and cash equivalents - Shareholders equity, including non-controlling interest of $1,030 million, decreased by $209 million during the first half mainly due to the operating loss and capital expenditure.

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Number of Associates

		June 30, 2021	March 31, 2021	December 30, 2020	September 30, 2020	June 30, 2020
TOTAL		7,303	7,512	7,543	7,433	7,095
Whereof:	Direct Manufacturing	1,452	1,489	1,452	1,370	1,130
	RD&E	4,221	4,408	4,476	4,454	4,404
	Temporary	1,257	1,372	1,359	1,258	1,031

Associates, net decreased by 209 to 7,303 during the quarter as compared to 7,512 in the previous quarter.

The decrease was mainly attributable to a decrease in RD&E associates and to a lesser extent in direct labor. The decreases were a result of the on-going MAIs.

Compared to June 30, 2020 the total number of associates increased by 208. In support of increased production volumes direct manufacturing associates increased by 322, while RD&E staff decreased by 183 as a part of our on-going MAI's. The increase in temporary associates was mainly related to an increase in production staff resulting from the reduced production in the second quarter 2020 due to COVID-19.

Significant Legal Matters

For discussion of legal matters we are involved in, see Note 15 "Contingent Liabilities", to the condensed consolidated financial statements included herein.

Off-Balance Sheet Arrangements and Other Matters

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows.

Contractual Obligations and Commitments

There have been no significant changes to the contractual obligations and commitments disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

Significant Accounting Policies and Critical Accounting Estimates

See Note 2 “Summary of Significant Accounting Policies” to the accompanying condensed consolidated financial statements included herein.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2021, there have been no material changes to the information related to quantitative and qualitative disclosures about market risk that was provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was (a) reported within the time periods specified by SEC rules and regulations, and (b) communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding any required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Various claims, litigation and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters.

For a description of our material legal proceedings, see Note 15 Contingent Liabilities – Legal Proceedings to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Other than as set forth below, there have been no material changes in the risk factors described in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors below and also those discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect our business, financial condition or future results. The risks described below and in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Risks Related to the Merger

The announcement and pendency of our agreement to be acquired by Magna International Inc. may have an adverse effect on our business, financial condition, operating results and cash flows.

On July 22, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Magna International Inc. (“Magna”) pursuant to which a wholly-owned subsidiary of Magna will, upon the terms and subject to the conditions set forth in the Merger Agreement, merge with and into us, and we will be the surviving corporation of the Merger and will become a wholly-owned subsidiary of Magna (the “Merger”). Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, each share of our common stock issued and outstanding immediately prior to the effective time of the Merger will be cancelled and automatically converted into the right to receive $31.25 in cash, without interest and subject to any applicable withholding taxes.

Uncertainty about the effect of the proposed Merger on our employees, partners, customers and other third parties may disrupt our sales and marketing, collaborative technology development relationships and/or other key business activities and may have a material adverse effect on our business, financial condition, operating results and cash flows. Current and prospective employees may experience uncertainty about their roles following the Merger. There can be no assurance we will be able to attract and retain key talent, including senior leaders, to the same extent that we have previously been able to attract and retain employees. Any loss or distraction of such employees could have a material adverse effect on our business, financial condition and operating results. In addition, we have diverted, and will continue to divert, significant management resources towards the completion of the Merger, which could materially adversely affect our business, financial condition, operating results and cash flows. Parties with which we have business relationships may experience uncertainty as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with us. Parties with whom we otherwise may have sought to establish business relationships may seek alternative relationships with third parties.

The pursuit of the Merger and planning for the integration may place a significant burden on management and other internal resources. The diversion of management’s attention away from day-to-day business concerns could adversely affect our business, financial condition and operating results.

The Merger Agreement generally requires us to operate our business in the ordinary course pending consummation of the proposed Merger and restricts us, without Magna’s consent, from taking certain specified actions until the Merger is completed. These restrictions may affect our ability to execute our business strategies, to respond effectively to competitive pressures and industry developments, and to attain our financial and other goals and may otherwise harm our business, financial condition, operating results and cash flows.

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The failure to complete the Merger with Magna in a timely manner or at all could negatively impact the market price of our common stock as well as adversely affect our business, financial condition, operating results and cash flows.

Completion of the Merger with Magna is subject to several conditions beyond our control that may prevent, delay or otherwise adversely affect its completion in a material way, including the approval of our stockholders, the expiration or termination of applicable waiting periods and the receipt of applicable approvals or consents under antitrust and competition laws and similar foreign investment laws in certain jurisdictions. The Merger cannot be completed until the conditions to closing are satisfied or (if permissible under applicable law) waived. We cannot guarantee that the closing conditions set forth in the Merger Agreement will be satisfied or, even if satisfied, that no event of termination will take place. In the event that the Merger is not completed for any reason, the holders of our common stock will not receive any payment for their shares of common stock in connection with the proposed Merger. Instead, we will remain an independent public company and the holders of our common stock will continue to own their shares of common stock.

If the Merger or a similar transaction is not completed, the share price of our common stock may drop to the extent that the current market price of our common stock reflects an assumption that a transaction will be completed. In addition, under circumstances specified in the Merger Agreement, we may be required to pay a termination fee of $110.0 million in the event the Merger is not consummated. Further, a failure to complete the Merger may result in negative publicity, negative impressions of us in the financial markets and investment community and negative responses from customers, partners and other third parties. Any disruption to our business resulting from the announcement and pendency of the Merger and from intensifying competition from our competitors, including any adverse changes in our relationships with our employees, partners, customers and other third parties, could continue or accelerate in the event of a failure to complete the Merger. There can be no assurance that our business, financial condition, operating results and cash flows will not be adversely affected, as compared to the condition prior to the announcement of the Merger, if the Merger is not consummated.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that cannot be met.

Before the Merger may be completed, various approvals, authorizations and declarations of non-objection must be obtained from certain regulatory and governmental authorities. Subject to the terms and conditions of the Merger Agreement, each party has agreed to use their reasonable best efforts to take all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws to consummate the Merger and the other transactions contemplated by the Merger Agreement as soon as practicable and no later than the termination date of the Merger Agreement, including obtaining any requisite approvals, subject to certain specified limitations under the Merger Agreement.

These regulatory and governmental entities may impose conditions on the granting of such approvals and if such regulatory and governmental entities seek to impose such conditions, lengthy negotiations may ensue among such regulatory or governmental entities, Magna and us. Such conditions and the process of obtaining regulatory approvals could have the effect of delaying completion of the Merger and such conditions may not be satisfied for an extended period of time.

We cannot assure you that these regulatory clearances and approvals will be obtained in a timely manner or obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of regulatory remedies on the completion of the Merger, including requiring changes to the terms of the Merger Agreement. These conditions or changes could result in the conditions to the closing of the Merger not being satisfied. The special meeting of our stockholders at which the adoption and approval of the Merger Agreement will be considered may take place before all of the required regulatory approvals have been obtained and before regulatory remedies, if any, are known. In this event, if the stockholder approval is obtained, we and Magna may subsequently agree to regulatory remedies without further seeking stockholder approval, except as required by applicable law, even if such regulatory remedies could have an adverse effect on us, Magna or the combined company.

The Merger Agreement contains provisions that could discourage or deter a potential competing acquirer that might be willing to pay more to effect an alternative transaction with us.

Under the Merger Agreement, we are generally not permitted to solicit or discuss takeover proposals with third parties, subject to certain exceptions. Further, subject to limited exceptions, the Merger Agreement contains restrictions on our ability to pursue other alternatives to the Merger and, in specified circumstances, could require us to pay Magna a termination fee of $110.0 million. Such restrictions may discourage or deter a third party that may be willing to pay more than Magna for our common stock from considering or proposing an alternative transaction with us. Notwithstanding the foregoing, in no event will the termination fee be paid to Magna more than once. Additional information regarding these restrictions will be provided in a proxy statement on Schedule 14A (the “Proxy Statement”) that will be filed with the Securities and Exchange Commission.

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We may be subject to litigation challenging the Merger.

Any litigation challenging the Merger may require significant management time and attention and significant legal expenses and may result in unfavorable outcomes, which could delay or prevent the Merger from being completed or have a material adverse effect on our business, financial condition, results of operations and cash flows.

The completion of the transaction contemplated by the Merger Agreement may trigger change in control or other similar provisions in certain agreements to which we are a party.

If we are unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages. Even if we are able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to us.

We will incur substantial transaction fees and costs in connection with the Merger.

We expect to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger. A material portion of these expenses are payable by us whether or not the Merger is completed. Further, while we have assumed that a certain amount of transaction expenses will be incurred, factors beyond our control could affect the total amount or the timing of these expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately. These expenses may exceed the costs historically borne by us. These costs could adversely affect our business, financial condition, operating results and cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On July 20, 2021, the Compensation Committee of the Board of Directors of Veoneer, Inc. approved a special bonus arrangement Matthias Bieler, the Company’s Executive Vice President, Product Area Vision & DMS. Mr. Bieler received a $50,000 cash bonus in recognition of his exceptional efforts with respect to certain contract negotiations.

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ITEM 6. EXHIBITS

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (filing date July 2, 2018).
3.2	Amended and Restated Bylaws, incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K (filing date July 2, 2018).
4.1	General Terms and Conditions for Swedish Depository Receipts in Veoneer, Inc., incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 10 (filing date June 4, 2018).
4.2	Indenture, dated May 28, 2019, between Veoneer, Inc. and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (filing date May 29, 2019).
4.3	Form of 4.00% Convertible Senior Note due 2024 (included in Exhibit 4.2), incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (filing date May 29, 2019).
10.1	Veoneer, Inc. 2021 Stock Incentive Plan, incorporated by reference to Annex B to the Company’s Definitive Proxy Statement on Schedule 14A filed on March 29, 2021.
10.2*	Employment Agreement, effective as of May 1, 2020, by and between Veoneer, Inc. and Matthias Bieler.
10.3*	Amendment, dated March 29, 2021, to Employment Agreement, effective as of May 1, 2020, by and between Veoneer, Inc. and Matthias Bieler.
10.4*	Employment Agreement, effective as of May 1, 2021, by and between Veoneer, Inc. and Steven Jenkins.
10.5*	Employment Agreement, effective as of May 1, 2021, by and between Veoneer, Inc. and Chris Van Dan Elzen.
10.6*	Employment Agreement, effective as of May 10, 2021, by and between Veoneer, Inc. and Christoph Schmickler.
10.7*	Form of Non-Employee Director restricted stock unit grant agreement to be used under the Veoneer, Inc. 2021 Stock Incentive Plan.
31.1*	Certification of the Chief Executive Officer of Veoneer, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of the Chief Financial Officer of Veoneer, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of the Chief Executive Officer of Veoneer, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the Chief Financial Officer of Veoneer, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2021, formatted Inline XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Condensed Consolidated Statements of Operations (Unaudited); (ii) the Condensed Consolidated Statements of Comprehensive Loss (Unaudited); (iii) the Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Changes in Equity (Unaudited); (v) the Condensed Consolidated Statements of Cash Flows; and (vi) Notes to unaudited condensed consolidated financial statements.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.
+	Management contract or compensatory plan.

40

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 23, 2021

VEONEER, INC.

(Registrant)

 

By:	/s/ Ray Pekar
	Ray Pekar
	Chief Financial Officer
	(Duly Authorized Officer and Principal Financial Officer)

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on January 22, 2020 by and between Veoneer Inc., a Delaware corporation (the “Company”), and Matthias Bieler (the “Executive”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as the Executive Vice President, Business Unit Europe of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Effective Date The effective date of this Agreement (the “Effective Date”) shall be February 1, 2020, or such other date to which the parties agree.

2.Employment. The Executive is hereby employed on the Effective Date as the Executive Vice President, Business Unit Europe of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer of the Company (the “Chief Executive Officer”). The principal workplace for the Executive shall be Munich, Germany.

3.Employment Period. The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “Employment Period”); provided, however, that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than six (6) calendar months prior to such date of termination; provided, further, however, that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of notice period or the last day of the month preceding the Executive’s 65th birthday (“Retirement”).

4.Extent of Service. During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and

associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided, however, thatthe Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consent of the Chief Executive Officer, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided thatnothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5.Compensation and Benefits.

(a)Base Salary. During the Employment Period, the Executive shall receive a gross salary at the rate of EUR 375,000 per year (“Base Salary”), less normal withholdings, payable in equal monthly or other installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

(b)Bonus. During the Employment Period, the Executive shall be eligible to participate in the Company’s bonus plan for executive officers, if any, pursuant to which he will have an opportunity to receive an annual bonus based upon the achievement of performance goals established from year to year by the Compensation Committee (such bonus earned at the stated “target” level of achievement being referred to herein as the “Target Bonus”). Until otherwise changed by the Compensation Committee, the Executive’s Target Bonus shall be forty-five percent (45%) of his Base Salary.

(c)Retention Bonus. The Executive shall be entitled to the following retention bonus payments:

(i)EUR 175,000 on November 1, 2020, provided that the Executive remains employed by the Company on such payment date and has not given notice of termination of the employment and has been continuously employed by the Company since the effective date.

(ii)an additional EUR 100,000 on November 1, 2021, provided that the Executive remains employed by the Company on such payment date and has not given notice of termination of the employment and has been continuously employed by the Company since the effective date.

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The payment of the retention bonus shall be made through the ordinary monthly payroll no later than the month following the anniversaries of the effective date.

(d)Equity Incentive Compensation. During the Employment Period, the Executive shall be eligible for equity grants under the Veoneer, Inc. 2018 Stock Incentive Plan (the “Veoneer Plan”), or any successor plan or plans, having such terms and conditions as awards to other peer executives of the Company, as determined by the Compensation Committee in its sole discretion, unless the Executive consents to a different type of award or different terms of such award than are applicable to other peer executives of the Company. Nothing herein requires the Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year. For 2020 the Company intends to award the Employee a stock incentive grant having an annual value equal to 220,000 USD.

(e)Automobile. The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. If a company car is provided, the Executive and his immediate family may also use the company car for personal purposes and the Company shall bear all petrol, maintenance and repair costs, as well as insurance costs and vehicle tax related to the Company car. If a car allowance is provided, the Company shall also bear all petrol, maintenance and repair cost. but no other costs for the automobile in addition to the allowance. Whether a company car or a car allowance is provided, the Executive shall be liable for the payment of tax on the car allowance or on the taxable benefit resulting from the right to use the company car for personal purposes.

(f)Medical Benefits. During the Employment Period, the Executive is entitled to medical and health care benefits according to local policies and practice.

(g)Housing Allowance. The Executive is entitled to a monthly housing allowance or benefit of max. EUR 3,000 until October 2021.

(h)Expenses. The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by him in the performance of his duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(i)Conditions of Employment. Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6.Vacation. The Executive shall be entitled to yearly vacation amounting to 30 days.

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7.Pension and benefits. The Company shall pay pension premiums for defined contribution insurance with an amount equal to thirty-five percent (35%) of the Employee’s Base Salary.

8.Business or Trade Information. The Executive shall not during or after the termination of his employment hereunder disclose to any person, firm of company whatsoever or use for his own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated company of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to his Date of Termination, if the Executive’s employment has terminated; provided, however, that nothing in this Section 8 shall preclude the Company from pursuing arbitration in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

9.Company Property. The Executive shall upon the termination of his employment hereunder for whatever reason immediately deliver to the Company all designs, specifications, correspondence and other documents, papers, the car provided hereunder and all other property belonging to the Company or any of its affiliated companies or which may have been prepared by him or have come into his possession in the course of his employment.

10.Termination of Employment.

(a)Death; Retirement. The Executive’s employment shall terminate automatically upon his death or Retirement.

(b)Termination by the Company. The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “Cause” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “Board”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that

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Cause exists shall be given effect unless the Chief Executive Officer and the Executive Vice President of Human Resources of the Company establish to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(c)Termination by the Executive. The Executive may terminate his employment during the Employment Period with Good Reason or without Good Reason. “Good Reason” shall mean the occurrence, without the Executive’s express written consent, of any of the following “Good Reason Events”:

(i)the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect on the Effective Date other than any such alteration primarily attributable to the fact that the Company may no longer be a public company;

(ii)a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

(iii)the relocation of the Executive’s principal place of employment to location more than 45 kilometers from the Executive’s principal place of employment on the Effective Date or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

(iv)the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

(v)the failure by the Company to continue in effect any compensation plan in which the Executive participates on the Effective Date which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed on the Effective Date; or

(vi)the failure by any successor to the business of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

A termination by the Executive shall not constitute termination for Good Reason unless the Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason

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(which notice must be given no later than 90 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by the Executive. The Executive’s termination for Good Reason must occur within a period of 160 days after the occurrence of an event of Good Reason. The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Good Reason shall not include the Executive’s death.

(d)Notice of Termination. Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

(e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated other than by reason of death or Retirement, the end of the notice period specified in Section 3 hereof (if applicable), or (ii) if the Executive’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Executive, or (iii) if the Executive’s employment is terminated by reason of Retirement, the Date of Termination shall be the date of Retirement.

(f) Dispute Concerning Termination. Any disputes regarding the termination of the Executive’s employment shall be settled in accordance with Section 16 hereof (including, without limitation, the provisions regarding costs and expenses related to arbitration). If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 10(f)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of the arbitrators (which is not appealable or with respect to which the time for appeal there from has expired and

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no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

(g) Compensation During Dispute. If the Date of Termination is extended in accordance with Section 10(f) hereof, the Company shall continue to provide the Executive with the compensation and benefits specified in Section 5 hereof until the Date of Termination, as determined in accordance with Section 10(f) hereof. Amounts paid under this Section 10(g) are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement; provided, however, that in the event that the arbitration results in a determination that the Executive is not entitled to the severance payments set forth in Section 11(a) hereof, then the Executive shall be obligated to promptly repay to the Company the compensation received by the Executive during the extended period pursuant to this Section 10(g).

11.Obligations of the Company Upon Termination of Employment.

(a)Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then the Executive shall be subject to the covenants set forth in Section 13 herein, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 20(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination.

(b)Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive or the Executive’s legal representatives under this Agreement, other than such death benefits he or they would otherwise be entitled to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliated companies.

(c)Retirement. If the Executive’s employment is terminated in connection with his Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

(d)Cause; Voluntary Resignation. If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns his employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

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12.Non-Duplication of Benefits. Notwithstanding anything to contrary in this Agreement, the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein shall be offset and reduced to the extent necessary by any other compensation or benefits of the same or similar type, including those payable under local laws of any relevant jurisdiction, so that such other compensation or benefits, if any, do not augment the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein. It is intended that this Agreement not duplicate compensation or benefits the Executive is entitled to under country “redundancy” laws, the Company’s severance policy, if any, any related or similar policies, or any other contracts, agreements or arrangements between the Executive and the Company.

13.Non-Competition Covenant; Payment for Non-Competition Covenant.

(a)During the twelve (12) months immediately following the termination of his employment with the Company for any reason, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in his employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “Non-Competition Covenant”).

(b)If the Executive does not comply with the Non-Competition Covenant when applicable, then (i) the Executive shall not be entitled to any benefits pursuant to Section 13(c) below during the period in which the Executive is not in compliance with such Non-Competition Covenant, and (ii) the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the last twelve (12) months prior to the Date of Termination.

(c)The Company may unilaterally waive the Non-Competition Covenant in its sole discretion. If the Company waives the Non-Competition Covenant, then the Executive shall not be entitled to any payments pursuant to Section 13(d).

(d)If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided, however, that the aggregate monthly payments from the Company pursuant to this Section 13(d) shall not exceed sixty percent (60%) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 60% aggregate amount has been paid, no further payments will be made under this Section 13(d). As a condition to the receipt of such payments, the Executive must inform the Company of his base salary in his new employment on a monthly basis. No payments shall be made under this Section 13 if the Executive’s employment is terminated in connection with his Retirement.

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14.Inventions.

(a)The general nature of any discovery, invention, secret process or improvement made or discovered by the Executive during the period of the Executive’s employment by the Company (hereinafter called “the Executive’s Inventions”) shall be notified by the Executive to the Company forthwith upon it being made or discovered.

(b)The entitlement as between the Company and the Executive to the Executive’s Inventions shall be determined in accordance with the current Act (1949:345) on the Right to Inventions made by Employees and the Executive acknowledges that because of the nature of his duties and the particular responsibilities arising therefrom he has a special obligation to further the interests of the Company’s undertaking.

(c)Where the Executive’s Inventions are to be assigned to the Company, the Executive shall make a full disclosure of the same to the Company and if and whenever required to do so shall at the expense of the Company apply, singly or jointly with the Company or other persons as required by the Company, for letters patent or other equivalent protection in Sweden and in any other part of the world of the Executive’s Inventions.

15.Entire Agreement. This Agreement supersedes any other previous agreements and arrangements whether written, oral or implied between the Company or Veoneer and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of his employment under this Agreement.

16.Disputes. Disputes regarding this Agreement (including, without limitation, disputes regarding the existence of Cause or Good Reason) shall be settled by arbitration in accordance with the Swedish Arbitration Act. The arbitration shall take place in Stockholm and, unless otherwise agreed to by both parties, there shall be three (3) arbitrators. The provisions on voting and cumulation of parties and claims in the Swedish Procedural Code shall be applied in the arbitration. All costs and expenses for the arbitration, whether initiated by the Company or by the Executive, including the Executive’s costs for solicitor, shall be borne by the Company, unless the arbitrators determine the Executive’s claim(s) to be frivolous and in bad faith, in which case the arbitrators may allocate costs as they deem fit. Any payments due to the Executive pursuant to the preceding sentence shall be made within fifteen (15) business days after delivery of the Executive’s written request for payment accompanied with such evidence of costs and expenses incurred as the Company reasonably may require.

17.Governing Law. This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

18.Amendment. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.

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19.Notices. All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:    

If to the Executive:     Matthias Bieler

If to the Company:    Veoneer Inc.

WTC, Klarabergsviadukten 70,

    111 64 Stockholm, Sweden

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

20.U.S. Tax Code Section 409A. This Section 20 shall apply only in the event that the Executive is or becomes a taxpayer under the laws of the United States at any time during the Employment Period.

(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive as a result of the application of Section 409A of the Code.

(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of a Change in Control or the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control or termination of employment, as the case may be, meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event” or “separation from service,” as the case may be, or such later date as may be required by

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subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on the Executive’s execution and non-revocation of a release of claims, such as the separation agreement referenced in Section 11(a) hereof, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (c) above, such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period.

(f)Timing of Reimbursements and In-kind Benefits. If the Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement and if such payments or reimbursements are includible in the Executive’s federal gross taxable income, the amount of such expenses payable or reimbursable in any one calendar year shall not affect the amount payable or reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. The right to any reimbursement for expenses incurred or provision of in-kind benefits is limited to the lifetime of the Executive, or such shorter period of time as is provided with respect to each particular right to reimbursement in-kind benefits pursuant to the preceding

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provisions of this Agreement. No right of the Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/ Matthias Bieler
Matthias Bieler

Veoneer, Inc.

/s/ Jan Carlson
Jan Carlson

Chairman and CEO, Veoneer, Inc.

Veoneer, Inc.

/s/ Mikko Taipale        
Mikko Taipale

Executive Vice President Human Resources

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EX-10.3

Exhibit 10.3

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is made to the employment agreement that was entered into on January 22, 2020 (the "Agreement"), by and between Veoneer Inc., a Delaware corporation (the "Company"), and Matthias Bieler (the "Executive"). References herein to the "Company" shall, as applicable, be deemed to include the Company's affiliates.

Effective Date. It is anticipated that the Company will reorganize. The effective date of this Amendment (the "Effective Date") shall be the effective date for the reorganization expected on April l, 2021, or such other date to which the parties agree. If the reorganization for any reason is not finalized, this Amendment will not become effective and the terms and conditions of the Agreement between the Company and the Executive will continue to apply.

Employment. As of the Effective Date the Executive's role and title is Executive Vice President, Business Area Vision & DMS of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer of the Company.

All other terms and conditions of the Agreement between the Company and the Executive remain unchanged following the Effective Date.

Stockholm, March 29, 2021

/s/ Jan Carlson                /s/ Matthias Bieler        

Jan Carlson                        Matthias Bieler

Chairman & CEO, Veoneer, Inc.

/s/ Mikael Landberg        

Mikael Landberg

EVP Human Resources, Veoneer, Inc.

EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on March 19, 2021 by and between Veoneer Inc., a Delaware corporation (the “Company”), and Steven Jenkins (the “Executive”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as the Chief Technology Officer of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Effective Date. It is anticipated that the Company will reorganize. The effective date of this Agreement (the “Effective Date”) shall be the effective date for the reorganization expected on April 1, 2021, or such other date to which the parties agree. If the reorganization for any reason is not finalized, this Agreement will not become effective and any previous employment agreement between the Company and the Executive will continue to apply.

2.Employment. The Executive is hereby employed on the Effective Date as the Chief Technology Officer of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer of the Company (the “Chief Executive Officer”). The principal workplace for the Executive shall be Linköping, Sweden.

3.Employment Period. The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “Employment Period”); provided, however, that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than six (6) calendar months prior to such date of termination; provided, further, however, that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of notice period or the last day of the month preceding the Executive’s 65th birthday (“Retirement”).

4.Extent of Service. During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote his full time and attention during normal business hours

to the business and affairs of the Company and any parent, subsidiary and associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided, however, thatthe Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consent of the Chief Executive Officer, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided thatnothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5.Compensation and Benefits.

(a)Base Salary. During the Employment Period, the Executive shall receive a gross salary at the rate of SEK 1,700,000 per year (“Base Salary”), less normal withholdings, payable in equal bi-weekly or other installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

(b)Bonus. During the Employment Period, the Executive shall be eligible to participate in the Company’s bonus plan for executive officers, if any, pursuant to which he will have an opportunity to receive an annual bonus based upon the achievement of performance goals established from year to year by the Compensation Committee (such bonus earned at the stated “target” level of achievement being referred to herein as the “Target Bonus”). Until otherwise changed by the Compensation Committee, the Executive’s Target Bonus shall be forty-five percent (45%) of his Base Salary.

(c)Equity Incentive Compensation. During the Employment Period, the Executive shall be eligible for equity grants under the Veoneer, Inc. 2018 Stock Incentive Plan (the “Veoneer Plan”), or any successor plan or plans, having such terms and conditions as awards to other peer executives of the Company, as determined by the Compensation Committee in its sole discretion, unless the Executive consents to a different type of award or different terms of such award than are applicable to other peer executives of the Company. Nothing herein requires the Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year.

(d)Automobile. The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. If a company car is provided, the Executive and his immediate family may also use the company car for personal purposes and the Company shall bear all petrol, maintenance and repair costs, as well as insurance costs and vehicle tax related to the Company car. If a car allowance is provided, the Company shall also bear all petrol, maintenance and repair cost. but no other costs for the automobile in addition to

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the allowance. Whether a company car or a car allowance is provided, the Executive shall be liable for the payment of tax on the car allowance or on the taxable benefit resulting from the right to use the company car for personal purposes.

(e)Medical Benefits. During the Employment Period, the Employee and his spouse or significant other is entitled to the Skandia Ledningsgrupp Medical Care Insurance, or any successor arrangement or plan having similar terms and conditions.

(f)Expenses. The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by him in the performance of his duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(g)Conditions of Employment. Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6.Vacation. The Executive shall be entitled to yearly vacation amounting to 30 days.

7.Pension and benefits. The Company shall pay pension premiums for defined contribution insurance with an amount equal to thirty-five percent (35%) of the Employee’s Base Salary. The pension premiums shall include premiums under the ITP plan, giving the Employee certain benefits in the event of his temporary or permanent illness. The insurance shall be taken out at a reputable insurance company, to be approved of in advance by the Company.

8.Business or Trade Information. The Executive shall not during or after the termination of his employment hereunder disclose to any person, firm of company whatsoever or use for his own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated company of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to his Date of Termination, if the Executive’s employment has terminated; provided, however, that nothing in this Section 8 shall preclude the Company from pursuing arbitration in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

9.Company Property. The Executive shall upon the termination of his employment hereunder for whatever reason immediately deliver to the Company all designs, specifications, correspondence and other documents, papers, the car provided hereunder and all other property

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belonging to the Company or any of its affiliated companies or which may have been prepared by him or have come into his possession in the course of his employment.

10.Termination of Employment.

(a)Death; Retirement. The Executive’s employment shall terminate automatically upon his death or Retirement.

(b)Termination by the Company. The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “Cause” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “Board”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and the Executive Vice President of Human Resources of the Company establish to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(c)Termination by the Executive. The Executive may terminate his employment during the Employment Period with Good Reason or without Good Reason. “Good Reason” shall mean the occurrence, without the Executive’s express written consent, of any of the following “Good Reason Events”:

(i) the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect on the Effective Date other than any such alteration primarily attributable to the fact that the Company may no longer be a public company;

(ii) a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

(iii) the relocation of the Executive’s principal place of employment to location more than 45 kilometers from the Executive’s principal place of employment on the Effective Date or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

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(iv) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

(v) the failure by the Company to continue in effect any compensation plan in which the Executive participates on the Effective Date which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed on the Effective Date; or

(vi) the failure by any successor to the business of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

A termination by the Executive shall not constitute termination for Good Reason unless the Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by the Executive. The Executive’s termination for Good Reason must occur within a period of 160 days after the occurrence of an event of Good Reason. The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Good Reason shall not include the Executive’s death.

(d)Notice of Termination. Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination

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any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

(e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated other than by reason of death or Retirement, the end of the notice period specified in Section 3 hereof (if applicable), or (ii) if the Executive’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Executive, or (iii) if the Executive’s employment is terminated by reason of Retirement, the Date of Termination shall be the date of Retirement.

(f) Dispute Concerning Termination. Any disputes regarding the termination of the Executive’s employment shall be settled in accordance with Section 16 hereof (including, without limitation, the provisions regarding costs and expenses related to arbitration). If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 10(f)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of the arbitrators (which is not appealable or with respect to which the time for appeal there from has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

(g)     Compensation During Dispute. If the Date of Termination is extended in accordance with Section 10(f) hereof, the Company shall continue to provide the Executive with the compensation and benefits specified in Section 5 hereof until the Date of Termination, as determined in accordance with Section 10(f) hereof. Amounts paid under this Section 10(g) are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement; provided, however, that in the event that the arbitration results in a determination that the Executive is not entitled to the severance payments set forth in Section 11(a) hereof, then the Executive shall be obligated to promptly repay to the Company the compensation received by the Executive during the extended period pursuant to this Section 10(g).

11.Obligations of the Company Upon Termination of Employment.

(a)Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then the Executive shall be subject to the covenants set forth in Section 13 herein, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 20(c) herein), the Company shall pay to the Executive a lump sum

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severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination.

(b)Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive or the Executive’s legal representatives under this Agreement, other than such death benefits he or they would otherwise be entitled to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliated companies.

(c)Retirement. If the Executive’s employment is terminated in connection with his Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

(d)Cause; Voluntary Resignation. If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns his employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

12.Non-Duplication of Benefits. Notwithstanding anything to contrary in this Agreement, the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein shall be offset and reduced to the extent necessary by any other compensation or benefits of the same or similar type, including those payable under local laws of any relevant jurisdiction, so that such other compensation or benefits, if any, do not augment the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein. It is intended that this Agreement not duplicate compensation or benefits the Executive is entitled to under country “redundancy” laws, the Company’s severance policy, if any, any related or similar policies, or any other contracts, agreements or arrangements between the Executive and the Company.

13.Non-Competition Covenant; Payment for Non-Competition Covenant.

(a)During the twelve (12) months immediately following the termination of his employment with the Company for any reason, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in his employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “Non-Competition Covenant”).

(b)If the Executive does not comply with the Non-Competition Covenant when applicable, then (i) the Executive shall not be entitled to any benefits pursuant to Section 13(c) below during the period in which the Executive is not in compliance with such Non-Competition

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Covenant, and (ii) the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the last twelve (12) months prior to the Date of Termination.

(c)The Company may unilaterally waive the Non-Competition Covenant in its sole discretion. If the Company waives the Non-Competition Covenant, then the Executive shall not be entitled to any payments pursuant to Section 13(d).

(d)If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided, however, that the aggregate monthly payments from the Company pursuant to this Section 13(d) shall not exceed sixty percent (60%) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 60% aggregate amount has been paid, no further payments will be made under this Section 13(d). As a condition to the receipt of such payments, the Executive must inform the Company of his base salary in his new employment on a monthly basis. No payments shall be made under this Section 13 if the Executive’s employment is terminated in connection with his Retirement.

14.Inventions.

(a)The general nature of any discovery, invention, secret process or improvement made or discovered by the Executive during the period of the Executive’s employment by the Company (hereinafter called “the Executive’s Inventions”) shall be notified by the Executive to the Company forthwith upon it being made or discovered.

(b)The entitlement as between the Company and the Executive to the Executive’s Inventions shall be determined in accordance with the current Act (1949:345) on the Right to Inventions made by Employees and the Executive acknowledges that because of the nature of his duties and the particular responsibilities arising therefrom he has a special obligation to further the interests of the Company’s undertaking.

(c)Where the Executive’s Inventions are to be assigned to the Company, the Executive shall make a full disclosure of the same to the Company and if and whenever required to do so shall at the expense of the Company apply, singly or jointly with the Company or other persons as required by the Company, for letters patent or other equivalent protection in Sweden and in any other part of the world of the Executive’s Inventions.

15.Entire Agreement. This Agreement supersedes any other previous agreements and arrangements whether written, oral or implied between the Company or Veoneer and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of his employment under this Agreement.

16.Disputes. Disputes regarding this Agreement (including, without limitation, disputes regarding the existence of Cause or Good Reason) shall be settled by arbitration in accordance with

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the Swedish Arbitration Act. The arbitration shall take place in Stockholm and, unless otherwise agreed to by both parties, there shall be three (3) arbitrators. The provisions on voting and cumulation of parties and claims in the Swedish Procedural Code shall be applied in the arbitration. All costs and expenses for the arbitration, whether initiated by the Company or by the Executive, including the Executive’s costs for solicitor, shall be borne by the Company, unless the arbitrators determine the Executive’s claim(s) to be frivolous and in bad faith, in which case the arbitrators may allocate costs as they deem fit. Any payments due to the Executive pursuant to the preceding sentence shall be made within fifteen (15) business days after delivery of the Executive’s written request for payment accompanied with such evidence of costs and expenses incurred as the Company reasonably may require.

17.Governing Law. This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

18.Amendment. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.

19.Notices. All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:    

If to the Executive:     Steven Jenkins

If to the Company:    Veoneer Inc.

WTC, Klarabergsviadukten 70,

    111 64 Stockholm, Sweden

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

20.U.S. Tax Code Section 409A. This Section 20 shall apply only in the event that the Executive is or becomes a taxpayer under the laws of the United States at any time during the Employment Period.

(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive as a result of the application of Section 409A of the Code.

(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred

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compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of a Change in Control or the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control or termination of employment, as the case may be, meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event” or “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on the Executive’s execution and non-revocation of a release of claims, such as the separation agreement referenced in Section 11(a) hereof, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (c) above, such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall

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have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period.

(f)Timing of Reimbursements and In-kind Benefits. If the Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement and if such payments or reimbursements are includible in the Executive’s federal gross taxable income, the amount of such expenses payable or reimbursable in any one calendar year shall not affect the amount payable or reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. The right to any reimbursement for expenses incurred or provision of in-kind benefits is limited to the lifetime of the Executive, or such shorter period of time as is provided with respect to each particular right to reimbursement in-kind benefits pursuant to the preceding provisions of this Agreement. No right of the Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/ Steven Jenkins

Steven Jenkins

Veoneer, Inc.

/s/ Jan Carlson

Jan Carlson

Chairman and CEO, Veoneer, Inc.

Veoneer, Inc.

/s/ Mikael Landberg

Mikael Landberg

Executive Vice President Human Resources

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EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on March 19, 2021 by and between Veoneer Inc., a Delaware corporation (the “Company”), and Christopher Van Dan Elzen (the “Executive”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as the Executive Vice President, Business Area Radar of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Effective Date It is anticipated that the Company will reorganize. The effective date of this Agreement (the “Effective Date”) shall be the effective date for the reorganization expected on April 1, 2021, or such other date to which the parties agree. If the reorganization for any reason is not finalized, this Agreement will not become effective and any previous employment agreement between the Company and the Executive will continue to apply.

2.Employment. The Executive is hereby employed on the Effective Date as the Executive Vice President, Business Area Radar of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer of the Company (the “Chief Executive Officer”). The principal workplace for the Executive shall be Detroit, USA.

3.Employment Period. The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “Employment Period”); provided, however, that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than six

(6) calendar months prior to such date of termination; provided, further, however, that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of notice period or the last day of the month preceding the Executive’s 65th birthday (“Retirement”).

4.Extent of Service. During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided, however, thatthe Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consent of the Chief Executive Officer, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided thatnothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5.Compensation and Benefits.

(a)Base Salary. During the Employment Period, the Executive shall receive a gross salary at the rate of USD 350,000 year (“Base Salary”), less normal withholdings, payable in equal bi-weekly or other installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

(b)Bonus. During the Employment Period, the Executive shall be eligible to participate in the Company’s bonus plan for executive officers, if any, pursuant to which he will have an opportunity to receive an annual bonus based upon the achievement of performance goals established from year to year by the Compensation Committee (such bonus earned at the stated “target” level of achievement being referred to herein as the “Target Bonus”). Until otherwise changed by the Compensation Committee, the Executive’s Target Bonus shall be forty-five percent (45%) of his Base Salary.

(c)Equity Incentive Compensation. During the Employment Period, the Executive shall be eligible for equity grants under the Veoneer, Inc. 2018 Stock Incentive Plan (the “Veoneer Plan”), or any successor plan or plans, having such terms and conditions as awards to other peer executives of the Company, as determined by the Compensation Committee in its sole discretion, unless the Executive consents to a different type of award or different terms of such

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award than are applicable to other peer executives of the Company. Nothing herein requires the Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year.

(d)Automobile. The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. If a company car is provided, the Executive and his immediate family may also use the company car for personal purposes and the Company shall bear all petrol, maintenance and repair costs, as well as insurance costs and vehicle tax related to the Company car. If a car allowance is provided, the Company shall also bear all petrol, maintenance and repair cost. but no other costs for the automobile in addition to the allowance. Whether a company car or a car allowance is provided, the Executive shall be liable for the payment of tax on the car allowance or on the taxable benefit resulting from the right to use the company car for personal purposes.

(e)Expenses. The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by him in the performance of his duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(f)Conditions of Employment. Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6.Vacation. The Executive shall be entitled to yearly vacation amounting to 25 days.

7.Pension and benefits. During the Employment Period, the Executive shall be eligible to participate in any non-qualified deferred compensation plan and/or qualified retirement plan of the Company (collectively, the “U.S. Savings Plans”) and any additional welfare benefit plans, practices, policies and programs provided by the Company, if any, to the extent available to similarly-situated employees in the United States and subject to eligibility requirements and terms and conditions of each such plan; provided, however, that nothing herein shall limit the ability of the Company to amend, modify or terminate any such benefit plans, policies or programs at any time and from time to time. Employee remains eligible for vested benefits in accordance with existing retiree benefits in accordance with those established policies, plans and procedures.

8.Business or Trade Information. The Executive shall not during or after the termination of his employment hereunder disclose to any person, firm of company whatsoever or use for his own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated company of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to his Date of Termination, if the Executive’s employment has terminated; provided, however, that nothing in this Section 8 shall

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preclude the Company from pursuing arbitration in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

9.Company Property. The Executive shall upon the termination of his employment hereunder for whatever reason immediately deliver to the Company all designs, specifications, correspondence and other documents, papers, the car provided hereunder and all other property belonging to the Company or any of its affiliated companies or which may have been prepared by him or have come into his possession in the course of his employment.

10.Termination of Employment.

(a)Death; Retirement. The Executive’s employment shall terminate automatically upon his death or Retirement.

(b)Termination by the Company. The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “Cause” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “Board”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and the Executive Vice President of Human Resources of the Company establish to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(c)Termination by the Executive. The Executive may terminate his employment during the Employment Period with Good Reason or without Good Reason. “Good Reason” shall mean the occurrence, without the Executive’s express written consent, of any of the following “Good Reason Events”:

i.the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect on the Effective Date other than any such alteration primarily attributable to the fact that the Company may no longer be a public company;

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ii.a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

iii.the relocation of the Executive’s principal place of employment to location more than 45 kilometers from the Executive’s principal place of employment on the Effective Date or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

iv.the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

v.the failure by the Company to continue in effect any compensation plan in which the Executive participates on the Effective Date which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed on the Effective Date; or

vi.the failure by any successor to the business of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

A termination by the Executive shall not constitute termination for Good Reason unless the Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by the Executive. The Executive’s termination for Good Reason must occur within a period of 160 days after the occurrence of an event of Good Reason. The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Good Reason shall not include the Executive’s death.

(d)Notice of Termination. Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the

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facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

(e)Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated other than by reason of death or Retirement, the end of the notice period specified in Section 3 hereof (if applicable), or (ii) if the Executive’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Executive, or (iii) if the Executive’s employment is terminated by reason of Retirement, the Date of Termination shall be the date of Retirement.

(f)Dispute Concerning Termination. Any disputes regarding the termination of the Executive’s employment shall be settled in accordance with Section 16 hereof (including, without limitation, the provisions regarding costs and expenses related to arbitration). If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 10(f)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of the arbitrators (which is not appealable or with respect to which the time for appeal there from has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

(g)Compensation During Dispute. If the Date of Termination is extended in accordance with Section 10(f) hereof, the Company shall continue to provide the Executive with the compensation and benefits specified in Section 5 hereof until the Date of Termination, as determined in accordance with Section 10(f) hereof. Amounts paid under this Section 10(g) are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement; provided, however, that in the event that the arbitration results in a determination that the Executive is not entitled to the severance payments set forth in Section 11(a) hereof, then the Executive shall be obligated to promptly repay to the Company the compensation received by the Executive during the extended period pursuant to this Section 10(g).

11.Obligations of the Company Upon Termination of Employment.

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(a)Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then the Executive shall be subject to the covenants set forth in Section 13 herein, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 20(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination.

(b)Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive or the Executive’s legal representatives under this Agreement, other than such death benefits he or they would otherwise be entitled to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliated companies.

(c)Retirement. If the Executive’s employment is terminated in connection with his Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

(d)Cause; Voluntary Resignation. If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns his employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

12.Non-Duplication of Benefits. Notwithstanding anything to contrary in this Agreement, the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein shall be offset and reduced to the extent necessary by any other compensation or benefits of the same or similar type, including those payable under local laws of any relevant jurisdiction, so that such other compensation or benefits, if any, do not augment the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein. It is intended that this Agreement not duplicate compensation or benefits the Executive is entitled to under country “redundancy” laws, the Company’s severance policy, if any, any related or similar policies, or any other contracts, agreements or arrangements between the Executive and the Company.

13.Non-Competition Covenant; Payment for Non-Competition Covenant.

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(a)During the twelve (12) months immediately following the termination of his employment with the Company for any reason, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in his employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “Non-Competition Covenant”).

(b)If the Executive does not comply with the Non-Competition Covenant when applicable, then (i) the Executive shall not be entitled to any benefits pursuant to Section 13(c) below during the period in which the Executive is not in compliance with such Non-Competition Covenant, and (ii) the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the last twelve (12) months prior to the Date of Termination.

(c)The Company may unilaterally waive the Non-Competition Covenant in its sole discretion. If the Company waives the Non-Competition Covenant, then the Executive shall not be entitled to any payments pursuant to Section 13(d).

(d)If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided, however, that the aggregate monthly payments from the Company pursuant to this Section 13(d) shall not exceed sixty percent (60%) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 60% aggregate amount has been paid, no further payments will be made under this Section 13(d). As a condition to the receipt of such payments, the Executive must inform the Company of his base salary in his new employment on a monthly basis. No payments shall be made under this Section 13 if the Executive’s employment is terminated in connection with his Retirement.

14.Inventions.

(a)The general nature of any discovery, invention, secret process or improvement made or discovered by the Executive during the period of the Executive’s employment by the Company (hereinafter called “the Executive’s Inventions”) shall be notified by the Executive to the Company forthwith upon it being made or discovered.

(b)The entitlement as between the Company and the Executive to the Executive’s Inventions shall be determined in accordance with the current Act (1949:345) on the Right to Inventions made by Employees and the Executive acknowledges that because of the nature of his duties and the particular responsibilities arising therefrom he has a special obligation to further the interests of the Company’s undertaking.

(c)Where the Executive’s Inventions are to be assigned to the Company, the Executive shall make a full disclosure of the same to the Company and if and whenever

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required to do so shall at the expense of the Company apply, singly or jointly with the Company or other persons as required by the Company, for letters patent or other equivalent protection in Sweden and in any other part of the world of the Executive’s Inventions.

15.Entire Agreement. This Agreement supersedes any other previous agreements and arrangements whether written, oral or implied between the Company or Veoneer and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of his employment under this Agreement.

16.Disputes. Disputes regarding this Agreement (including, without limitation, disputes regarding the existence of Cause or Good Reason) shall be settled by arbitration in accordance with the Swedish Arbitration Act. The arbitration shall take place in Stockholm and, unless otherwise agreed to by both parties, there shall be three (3) arbitrators. The provisions on voting and cumulation of parties and claims in the Swedish Procedural Code shall be applied in the arbitration. All costs and expenses for the arbitration, whether initiated by the Company or by the Executive, including the Executive’s costs for solicitor, shall be borne by the Company, unless the arbitrators determine the Executive’s claim(s) to be frivolous and in bad faith, in which case the arbitrators may allocate costs as they deem fit. Any payments due to the Executive pursuant to the preceding sentence shall be made within fifteen (15) business days after delivery of the Executive’s written request for payment accompanied with such evidence of costs and expenses incurred as the Company reasonably may require.

17.Governing Law. This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

18.Amendment. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.

19.Notices. All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:     Christopher Van Dan Elzen

If to the Company:     Veoneer Inc.

            WTC, Klarabergsviadukten 70,

                111 64 Stockholm, Sweden

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

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20.U.S. Tax Code Section 409A. This Section 20 shall apply only in the event that the Executive is or becomes a taxpayer under the laws of the United States at any time during the Employment Period.

(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive as a result of the application of Section 409A of the Code.

(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of a Change in Control or the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control or termination of employment, as the case may be, meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event” or “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A‑3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through

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and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement shall be considered a separate payment, as described in Treas. Reg. Section 1.409A‑2(b)(2), for purposes of Section 409A of the Code.

(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on the Executive’s execution and non-revocation of a release of claims, such as the separation agreement referenced in Section 11(a) hereof, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (c) above, such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period.

(f)Timing of Reimbursements and In-kind Benefits. If the Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement and if such payments or reimbursements are includible in the Executive’s federal gross taxable income, the amount of such expenses payable or reimbursable in any one calendar year shall not affect the amount payable or reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. The right to any reimbursement for expenses incurred or provision of in-kind benefits is limited to the lifetime of the Executive, or such shorter period of time as is provided with respect to each particular right to reimbursement in-kind benefits pursuant to the preceding provisions of this Agreement. No right of the Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/Christopher Van Dan Elzen

Christopher Van Dan Elzen

Veoneer, Inc.

/s/ Jan Carlson

Jan Carlson

Chairman and CEO, Veoneer, Inc.

Veoneer, Inc.

/s/ Mikael Landberg

Mikael Landberg

Executive Vice President Human Resources

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EX-10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on May 10, 2021 by and between Veoneer Inc., a Delaware corporation (the “Company”), and Christoph Schmickler (the “Executive”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as the Senior Vice President, Business Area ADAS & SW of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Effective Date. The effective date of this Agreement (the “Effective Date”) shall be May 10, 2021, or such other date to which the parties agree.

2.Employment. The Executive is hereby employed on the Effective Date as the Executive Vice President, Business Area ADAS & SW of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer of the Company (the “Chief Executive Officer”). The principal workplace for the Executive shall be Munich, Germany.

3.Employment Period. The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “Employment Period”); provided, however, that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than six (6) calendar months prior to such date of termination; provided, further, however, that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of notice period or the last day of the month preceding the Executive’s 65th birthday (“Retirement”).

4.Extent of Service. During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and

associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided, however, thatthe Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consent of the Chief Executive Officer, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided thatnothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5.Compensation and Benefits.

(a)Base Salary. During the Employment Period, the Executive shall receive a gross salary at the rate of EUR 210,000 per year (“Base Salary”), less normal withholdings, payable in equal bi-weekly or other installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

(b)Bonus. During the Employment Period, the Executive shall be eligible to participate in the Company’s bonus plan for executive officers, if any, pursuant to which he will have an opportunity to receive an annual bonus based upon the achievement of performance goals established from year to year by the Compensation Committee (such bonus earned at the stated “target” level of achievement being referred to herein as the “Target Bonus”). Until otherwise changed by the Compensation Committee, the Executive’s Target Bonus shall be thirty-five percent (35%) of his Base Salary.

(c)Equity Incentive Compensation. During the Employment Period, the Executive shall be eligible for equity grants under the Veoneer, Inc. 2018 Stock Incentive Plan (the “Veoneer Plan”), or any successor plan or plans, having such terms and conditions as awards to other peer executives of the Company, as determined by the Compensation Committee in its sole discretion, unless the Executive consents to a different type of award or different terms of such award than are applicable to other peer executives of the Company. Nothing herein requires the Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year.

(d)Automobile. The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. If a company car is provided, the Executive and his immediate family may also use the company car for personal purposes and the Company shall bear all petrol, maintenance and repair costs, as well as insurance costs and vehicle tax related to the Company car. If a car allowance is

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provided, the Company shall also bear all petrol, maintenance and repair cost. but no other costs for the automobile in addition to the allowance. Whether a company car or a car allowance is provided, the Executive shall be liable for the payment of tax on the car allowance or on the taxable benefit resulting from the right to use the company car for personal purposes.

(e)Medical Benefits. During the Employment Period, the Executive is entitled to medical and health care benefits according to local policies and practice.

(f)Expenses. The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by him in the performance of his duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(g)Conditions of Employment. Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6.Vacation. The Executive shall be entitled to yearly vacation amounting to 30 days.

7.Pension and benefits. The Company shall pay pension for defined contribution insurance with an amount equal to twenty percent (20%) of the Executive’s Base Salary. The insurance shall be taken out at a reputable insurance company, to be approved of in advance by the Company.

8.Business or Trade Information. The Executive shall not during or after the termination of his employment hereunder disclose to any person, firm of company whatsoever or use for his own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated company of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to his Date of Termination, if the Executive’s employment has terminated; provided, however, that nothing in this Section 8 shall preclude the Company from pursuing arbitration in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

9.Company Property. The Executive shall upon the termination of his employment hereunder for whatever reason immediately deliver to the Company all designs, specifications, correspondence and other documents, papers, the car provided hereunder and all other property

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belonging to the Company or any of its affiliated companies or which may have been prepared by him or have come into his possession in the course of his employment.

10.Termination of Employment.

(a)Death; Retirement. The Executive’s employment shall terminate automatically upon his death or Retirement.

(b)Termination by the Company. The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “Cause” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “Board”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and the Executive Vice President of Human Resources of the Company establish to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(c)Termination by the Executive. The Executive may terminate his employment during the Employment Period with Good Reason or without Good Reason. “Good Reason” shall mean the occurrence, without the Executive’s express written consent, of any of the following “Good Reason Events”:

(i)the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect on the Effective Date other than any such alteration primarily attributable to the fact that the Company may no longer be a public company;

(ii)a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

(iii)the relocation of the Executive’s principal place of employment to location more than 45 kilometers from the Executive’s principal place of employment on the Effective Date or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

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(iv)the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

(v)the failure by the Company to continue in effect any compensation plan in which the Executive participates on the Effective Date which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed on the Effective Date; or

(vi)the failure by any successor to the business of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

A termination by the Executive shall not constitute termination for Good Reason unless the Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by the Executive. The Executive’s termination for Good Reason must occur within a period of 160 days after the occurrence of an event of Good Reason. The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Good Reason shall not include the Executive’s death.

(d)Notice of Termination. Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause

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herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

(e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated other than by reason of death or Retirement, the end of the notice period specified in Section 3 hereof (if applicable), or (ii) if the Executive’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Executive, or (iii) if the Executive’s employment is terminated by reason of Retirement, the Date of Termination shall be the date of Retirement.

(f) Dispute Concerning Termination. Any disputes regarding the termination of the Executive’s employment shall be settled in accordance with Section 16 hereof (including, without limitation, the provisions regarding costs and expenses related to arbitration). If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 10(f)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of the arbitrators (which is not appealable or with respect to which the time for appeal there from has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

(g) Compensation During Dispute. If the Date of Termination is extended in accordance with Section 10(f) hereof, the Company shall continue to provide the Executive with the compensation and benefits specified in Section 5 hereof until the Date of Termination, as determined in accordance with Section 10(f) hereof. Amounts paid under this Section 10(g) are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement; provided, however, that in the event that the arbitration results in a determination that the Executive is not entitled to the severance payments set forth in Section 11(a) hereof, then the Executive shall be obligated to promptly repay to the Company the compensation received by the Executive during the extended period pursuant to this Section 10(g).

11.Obligations of the Company Upon Termination of Employment.

(a)Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then the Executive shall be subject to the covenants set forth in Section 13 herein, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such

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later date as may be required pursuant to Section 20(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5) the Executive’s Base Salary as in effect immediately prior to the Date of Termination.

(b)Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive or the Executive’s legal representatives under this Agreement, other than such death benefits he or they would otherwise be entitled to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliated companies.

(c)Retirement. If the Executive’s employment is terminated in connection with his Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

(d)Cause; Voluntary Resignation. If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns his employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided, however, that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

12.Non-Duplication of Benefits. Notwithstanding anything to contrary in this Agreement, the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein shall be offset and reduced to the extent necessary by any other compensation or benefits of the same or similar type, including those payable under local laws of any relevant jurisdiction, so that such other compensation or benefits, if any, do not augment the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein. It is intended that this Agreement not duplicate compensation or benefits the Executive is entitled to under country “redundancy” laws, the Company’s severance policy, if any, any related or similar policies, or any other contracts, agreements or arrangements between the Executive and the Company.

13.Non-Competition Covenant; Payment for Non-Competition Covenant.

(a)During the twelve (12) months immediately following the termination of his employment with the Company for any reason, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in his employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “Non-Competition Covenant”).

(b)If the Executive does not comply with the Non-Competition Covenant when applicable, then (i) the Executive shall not be entitled to any benefits pursuant to

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Section 13(d) below during the period in which the Executive is not in compliance with such Non-Competition Covenant, and (ii) the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the last twelve (12) months prior to the Date of Termination.

(c)The Company may unilaterally waive the Non-Competition Covenant in its sole discretion. If the Company waives the Non-Competition Covenant, then the Executive shall not be entitled to any payments pursuant to Section 13(d).

(d)If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided, however, that the aggregate monthly payments from the Company pursuant to this Section 13(d) shall not exceed sixty percent (60%) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 60% aggregate amount has been paid, no further payments will be made under this Section 13(d). As a condition to the receipt of such payments, the Executive must inform the Company of his base salary in his new employment on a monthly basis. No payments shall be made under this Section 13 if the Executive’s employment is terminated in connection with his Retirement.

14.Inventions.

(a)The general nature of any discovery, invention, secret process or improvement made or discovered by the Executive during the period of the Executive’s employment by the Company (hereinafter called “the Executive’s Inventions”) shall be notified by the Executive to the Company forthwith upon it being made or discovered.

(b)The entitlement as between the Company and the Executive to the Executive’s Inventions shall be determined in accordance with the current Act (1949:345) on the Right to Inventions made by Employees and the Executive acknowledges that because of the nature of his duties and the particular responsibilities arising therefrom he has a special obligation to further the interests of the Company’s undertaking.

(c)Where the Executive’s Inventions are to be assigned to the Company, the Executive shall make a full disclosure of the same to the Company and if and whenever required to do so shall at the expense of the Company apply, singly or jointly with the Company or other persons as required by the Company, for letters patent or other equivalent protection in Sweden and in any other part of the world of the Executive’s Inventions.

15.Entire Agreement. This Agreement supersedes any other previous agreements and arrangements whether written, oral or implied between the Company or Veoneer and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of his employment under this Agreement.

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16.Disputes. Disputes regarding this Agreement (including, without limitation, disputes regarding the existence of Cause or Good Reason) shall be settled by arbitration in accordance with the Swedish Arbitration Act. The arbitration shall take place in Stockholm and, unless otherwise agreed to by both parties, there shall be three (3) arbitrators. The provisions on voting and cumulation of parties and claims in the Swedish Procedural Code shall be applied in the arbitration. All costs and expenses for the arbitration, whether initiated by the Company or by the Executive, including the Executive’s costs for solicitor, shall be borne by the Company, unless the arbitrators determine the Executive’s claim(s) to be frivolous and in bad faith, in which case the arbitrators may allocate costs as they deem fit. Any payments due to the Executive pursuant to the preceding sentence shall be made within fifteen (15) business days after delivery of the Executive’s written request for payment accompanied with such evidence of costs and expenses incurred as the Company reasonably may require.

17.Governing Law. This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

18.Amendment. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.

19.Notices. All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:    

If to the Executive:     Christoph Schmickler

If to the Company:    Veoneer Inc.

WTC, Klarabergsviadukten 70,

    111 64 Stockholm, Sweden

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

20.U.S. Tax Code Section 409A. This Section 20 shall apply only in the event that the Executive is or becomes a taxpayer under the laws of the United States at any time during the Employment Period.

(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the

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benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive as a result of the application of Section 409A of the Code.

(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of a Change in Control or the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control or termination of employment, as the case may be, meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event” or “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

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(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on the Executive’s execution and non-revocation of a release of claims, such as the separation agreement referenced in Section 11(a) hereof, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (c) above, such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period.

(f)Timing of Reimbursements and In-kind Benefits. If the Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement and if such payments or reimbursements are includible in the Executive’s federal gross taxable income, the amount of such expenses payable or reimbursable in any one calendar year shall not affect the amount payable or reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. The right to any reimbursement for expenses incurred or provision of in-kind benefits is limited to the lifetime of the Executive, or such shorter period of time as is provided with respect to each particular right to reimbursement in-kind benefits pursuant to the preceding provisions of this Agreement. No right of the Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/ Christoph Schmickler    
Christoph Schmickler

Veoneer, Inc.

/s/ Jan Carlson
Jan Carlson

Chairman and CEO, Veoneer, Inc.

Veoneer, Inc.

/s/ Mikael Landberg
Mikael Landberg

Executive Vice President Human Resources

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EX-10.7

Exhibit 10.7

GRANT AGREEMENT

Applicable to Restricted Stock Units promised under the Veoneer, Inc. 2021 Stock Incentive Plan

Your above-described grant of restricted stock units (“RSUs”) is subject to the following provisions in addition to those set forth in the attached Notice of Grant (the “Grant Notice”) and the Veoneer, Inc. 2021 Stock Incentive Plan (the “Plan”):

1.    Defined Terms: Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.

2.    Vesting: The RSUs have been credited to a bookkeeping account (“Account”) on your behalf as of the grant date specified in the Grant Notice (the “Grant Date”). Your Account will reflect the number of RSUs awarded to you as set forth in the Grant Notice, as well as any additional RSUs credited as a result of dividend equivalents, as described in Section 9 below. Each RSU represents an unfunded, unsecured right to receive Common Stock, subject to the terms and conditions stated in the Plan and this Grant Agreement. Your RSUs will vest and become non-forfeitable on the earliest to occur of the following (each, a “Date of Vesting”):

(a)as to all of the RSUs, on the Date of Vesting specified in the Grant Notice, provided that you are then still providing services as a member of the Board of Directors of the Company (the “Board”); or

(b)as to all of the RSUs, upon the occurrence of a Change in Control, provided that you are then still providing services as a member of the Board.

If your service on the Board terminates for any reason, you will forfeit all right, title and interest in and to the unvested RSUs as of the date of such termination, and the unvested RSUs will be reconveyed to the Company without further consideration or any act or action by you.

3.    Conversion to Shares of Common Stock; Procedure at Date of Vesting:

a.Unless the RSUs are forfeited prior to the Date of Vesting as provided in Section 2 above, the RSUs will be converted on the Date of Vesting to actual shares of Common Stock. The shares of Common Stock to be issued pursuant to this Grant Agreement shall be issued in the form of book-entry shares of Common Stock in your name as the beneficial owner as of the Date of Vesting.

b.You will, if requested, within the specified time set forth in any such request (not to exceed 30 days), deliver to the Company such written representations and undertakings as may, in the opinion of the Company’s legal counsel, be necessary or desirable to comply with tax and securities laws.

4.    Securities Law Restrictions; Insider Trading Policy:

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    You may not offer, sell or otherwise dispose of any shares of Common Stock in a manner which would violate any applicable laws, including, without limitation, the laws of Sweden, U.S. federal and state securities laws, U.S. federal law, the requirements of any stock exchange or quotation system upon which the Common Stock may then be listed or quoted and any laws of any other country or jurisdiction that may be applicable to you.

    In connection with receipt of this Grant Agreement, you acknowledge that you are subject to the Company’s Insider Trading Policy which is available upon request to the Legal department of the Company.

5.    Change in Control of the Company:

    Notwithstanding any provision herein to the contrary, your RSUs shall be immediately vested in full upon the occurrence of a Change in Control.

6.    Non-Transferability:

    Your RSUs are personal to you and shall not be transferable by you otherwise than by will or the laws of descent and distribution.

7.    Conformity with Plan:

    Your RSUs are intended to conform in all respects with the Plan, including any future amendments thereto. Inconsistencies between this Grant Agreement and the Plan shall be resolved in accordance with the terms of the Plan. All definitions stated in the Plan shall be fully applicable to this Grant Agreement.

8.    Service and Successors:

    Nothing herein or in the Grant Notice or in the Plan confers any right or obligation on you to continue providing services to the Company or shall affect in any way your right or the right of the Company or any subsidiary, as the case may be, to terminate your service at any time. This Grant Agreement, the Grant Notice and the Plan, including any future amendments thereto, shall be binding upon you, your estate, any person succeeding to your rights hereunder and any successor or successors of the Company. The RSUs do not confer to you or any person succeeding to your rights hereunder any rights of a shareholder of the Company unless and until shares of Common Stock are in fact issued to you or such person in connection with the settlement of the RSUs.

9. Dividend Equivalent Rights:

Subject to share availability under the Plan, any cash dividend paid with respect to the Common Stock for which the record date occurs on or after the Grant Date and the payment date occurs on or before the Date of Vesting will result in a credit to your Account of additional RSUs equal to (a) the dollar amount of the dividend per share of Common Stock multiplied by the number of RSUs credited to your Account as of the applicable record date, divided by (b) the closing price per share of the Common Stock on the New York Stock Exchange on the applicable dividend payment date. The additional RSUs credited pursuant to this Section 9 will be subject to the same vesting schedule, forfeiture and other terms that apply to the original RSUs. On the Date of Vesting, the aggregate

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number of any additional RSUs credited pursuant to this Section 9 over time shall be rounded down to the nearest whole share. RSUs that, at the relevant dividend payment date, previously have been settled or forfeited will not be eligible to receive dividend equivalents pursuant to this Section 9.

10.    Tax:

You are totally responsible for paying all taxes that you incur in respect of this Grant Agreement. The Company has the authority and the right to deduct or withhold, or require you to remit, an amount sufficient to satisfy all applicable taxes required by law to be withheld with respect to any taxable event arising as a result of vesting or settlement of the RSUs. The withholding requirement may be satisfied, in whole or in part, by withholding from the settlement of the RSUs, shares of Common Stock having a fair market value on the date of withholding equal to the amount required to be withheld in accordance with applicable tax requirements (up to the maximum individual statutory rate in the applicable jurisdiction as may be permitted under then-current accounting principles to qualify for equity classification), all in accordance with such procedures as the Company establishes. The obligations of the Company hereunder will be conditional on such payment, and the Company will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to you.

11.    Governing Law:

    This Grant Agreement, the Grant Notice and the Plan shall be construed in accordance with and governed by the laws of the State of Delaware, USA, and, to the extent relevant, the local laws of your home country.

12.    Severability:

If any one or more of the provisions contained in this Grant Agreement are invalid, illegal or unenforceable, the other provisions of this Grant Agreement will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included.

13.    Director Stock Ownership Requirements:

In connection with receipt of this Grant Agreement, you acknowledge that you are subject to the Company’s policy regarding “Stock Ownership Policy for Directors”.

14.    Fractional Shares:

No fractional shares of Common Stock, nor the cash value of any fractional shares of Common Stock, will be issuable or payable to you pursuant to this Agreement. 

3

EX-31.1

Exhibit 31.1

CERTIFICATION of

the Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jan Carlson, certify that:

1.I have reviewed this quarterly report on Form 10-Q of VEONEER, INC.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 23, 2021

/s/ Jan Carlson

Jan Carlson

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION of

the Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ray Pekar, certify that:

1.I have reviewed this quarterly report on Form 10-Q of VEONEER, INC.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 23, 2021

/s/ Ray Pekar

Ray Pekar

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Veoneer, Inc. (the “Company”) for the period ended June 30, 2021, filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jan Carlson, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 23, 2021

/s/ Jan Carlson

Jan Carlson

President and Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Veoneer, Inc. (the “Company”) for the period ended June 30, 2021, filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ray Pekar, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 23, 2021

/s/ Ray Pekar

Ray Pekar

Chief Financial Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2021	Jul. 16, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	001-38471
Entity Registrant Name	Veoneer, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-3720890
Entity Address, Address Line One	Klarabergsviadukten 70, Section C6
Entity Address, Address Line Two	Box 13089
Entity Address, City or Town	Stockholm
Entity Address, Country	SE
Entity Address, Postal Zip Code	SE- 103 02
City Area Code	46
Local Phone Number	8 527 762 00
Title of 12(b) Security	Common stock, $1.00 par value
Trading Symbol	VNE
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		111,959,234
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001733186
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Net sales	$ 398	$ 184	$ 816	$ 546
Cost of sales	(336)	(181)	(698)	(490)
Gross profit	62	3	118	56
Selling, general and administrative expenses	(41)	(38)	(81)	(82)
Research, development and engineering expenses, net	(108)	(44)	(224)	(175)
Amortization of intangibles	(2)	(1)	(4)	(3)
Other income, net	(3)	16	(5)	18
Operating loss	(92)	(64)	(196)	(186)
Loss on divestiture and assets impairment charge, net	0	0	0	(67)
Gain (loss) from equity method investment	1	(19)	8	(38)
Interest income	1	3	1	7
Interest expense	(5)	(5)	(10)	(10)
Other non-operating items, net	(1)	(3)	1	(1)
Loss before income taxes	(96)	(88)	(196)	(295)
Income tax expense	(4)	(2)	(9)	(26)
Net loss	(100)	(90)	(205)	(321)
Less: Net income attributable to non-controlling interest	0	0	0	1
Net loss attributable to controlling interest	$ (100)	$ (90)	$ (205)	$ (322)
Net loss per share - basic (in dollars per share)	$ (0.89)	$ (0.80)	$ (1.83)	$ (2.89)
Net loss per share - diluted (in dollars per share)	$ (0.89)	$ (0.80)	$ (1.83)	$ (2.89)
Weighted average number of shares outstanding (in millions)	111,840	111,580	111,770	111,520
Weighted average number of shares outstanding, assuming dilution (in millions)	111,840	111,580	111,770	111,520

XML

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Net loss	$ (100)	$ (90)	$ (205)	$ (321)
Other comprehensive loss, before tax:
Change in cumulative translation adjustment	5	18	(10)	(3)
Pension liability	0	0	0	1
Other comprehensive income (loss), before tax	5	18	(10)	(2)
Other comprehensive income (loss), net of tax	5	18	(10)	(2)
Comprehensive loss	(95)	(72)	(215)	(323)
Less: Comprehensive income attributable to non-controlling interest	0	0	0	1
Comprehensive loss attributable to controlling interest	$ (95)	$ (72)	$ (215)	$ (324)

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents	$ 555	$ 758
Restricted cash	1	0
Receivables, net	257	292
Inventories, net	157	134
Related party receivables	8	9
Prepaid expenses and other contract assets	44	36
Other current assets	13	15
Total current assets	1,035	1,244
Property, plant and equipment, net	403	431
Operating lease right-of-use assets	85	89
Equity method investment	18	153
Goodwill	318	317
Intangible assets, net	18	21
Deferred tax assets	5	6
Other non-current assets	18	27
Total assets	1,900	2,288
Liabilities and equity
Accounts payable	262	257
Related party payables	1	2
Accrued expenses	200	232
Income tax payable	7	25
Related party short-term debt	0	16
Other current liabilities	60	55
Total current liabilities	530	587
4.00% Convertible Senior Notes due 2024	174	170
Related party long-term debt	0	115
Pension liability	20	20
Deferred tax liabilities	12	12
Operating lease non-current liabilities	69	71
Finance lease non-current liabilities	46	46
Other non-current liabilities	19	28
Total non-current liabilities	$ 340	$ 462
Shares outstanding (in shares)	111,000	112,000
Shares issued (in shares)	111,000	112,000
Equity
Common stock (par value $1.00, 325 million shares authorized, 111 million shares and 112 million shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)	$ 112	$ 111
Additional paid-in capital	2,354	2,349
Accumulated deficit	(1,431)	(1,226)
Accumulated other comprehensive income/ (loss)	(5)	5
Total equity	1,030	1,239
Total liabilities and equity	$ 1,900	$ 2,288

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Par value (in dollars per share)	$ 1.00	$ 1.00
Shares authorized (in shares)	325,000,000	325,000,000
Shares issued (in shares)	111,000,000	112,000,000
Shares outstanding (in shares)	111,000,000	112,000,000
4% Convertible Senior Dotes due 2024 | Convertible Senior Notes
Stated interest rate (percent)	4.00%

XML

Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Non-controlling Interest
Balance at beginning of period at Dec. 31, 2019	$ 1,818	$ 111	$ 2,343	$ (681)	$ (44)	$ 89
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(321)			(322)		1
Foreign currency translation	1					1
Stock based compensation expense	4		4
Business divestitures	(88)				3	(91)
Balance at end of period at Jun. 30, 2020	1,414	111	2,347	(1,003)	(41)	$ 0
Balance at beginning of period at Dec. 31, 2020	1,239	111	2,349	(1,226)	5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(205)			(205)
Foreign currency translation	(10)				(10)
Stock based compensation expense	5		5
Issuance of common stock	1	1
Balance at end of period at Jun. 30, 2021	$ 1,030	$ 112	$ 2,354	$ (1,431)	$ (5)

XML

Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating activities
Net loss	$ (205)	$ (321)
Depreciation and amortization	57	46
Gain on divestitures	0	(77)
Assets impairment charge	0	144
Undistributed (gain) loss from equity method investments	(8)	38
Stock-based compensation	5	4
Deferred income taxes	0	(1)
Other, net	4	(9)
Change in operating assets and liabilities:
Receivables, gross	33	50
Accrued expenses	(22)	22
Related party receivables and payables, net	0	2
Accounts payable	9	(86)
Prepaid expenses and other contract assets	(9)	29
Inventories, gross	(32)	14
Income taxes	(15)	21
Other current assets and liabilities, net	4	8
Net cash used in operating activities	(179)	(116)
Investing activities
Proceeds from divestitures	0	176
Capital expenditures	(30)	(51)
Equity method investment	12
Equity method investment		(26)
Net cash provided by investing activities	(18)	99
Financing activities
Dividend paid to non-controlling interest	0	(5)
(Payments for) proceeds from long-term debt	1	(1)
(Payments for) proceeds from short-term debt	(2)	15
Proceeds from exercise of stock options	1	0
Net cash (used in) provided by financing activities	0	9
Effect of exchange rate changes on cash and cash equivalents	(5)	0
Increase (decrease) in cash and cash equivalents and restricted cash	(202)	(8)
Cash and cash equivalents and restricted cash at beginning of period	758	859
Cash and cash equivalents at end of period	$ 556	$ 851

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements of Veoneer, Inc. (the "Company" or "Veoneer") have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").The accompanying unaudited condensed consolidated financial statements for Veoneer do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Consolidated Financial Statements for the year ended December 31, 2020 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

Certain amounts in the unaudited condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts.

The Company has one operating segment, the Electronics segment. The Company previously had two operating segments, Electronics and Brake Systems. Electronics includes all electronics resources and expertise, Restraint Control Systems and Active Safety products, and Brake Systems provided brake control and actuation systems. The Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold on August 10, 2020. The remaining Brake Systems business is no longer a reportable segment due to immateriality.

Divestiture of Veoneer Nissin Brake System ("VNBS")

On October 30, 2019, Veoneer signed definitive agreements to sell its 51% ownership in Veoneer Nissin Brake Japan ("VNBJ") and Veoneer Nissin Brake China ("VNBZ"), entities that comprise VNBS to its joint venture partner Nissin-Kogyo Co., Ltd. (“Nissin Kogyo”) and Honda Motor Co., Ltd. The aggregate purchase price was $176 million. The divestiture of VNBJ and VNBZ was structured as two separate transactions each of which was completed on February 3, 2020, and the VNBS joint venture was terminated. See Note 5 "Divestiture and held for sale" for additional information.

Divestiture of Veoneer Brake Systems ("VBS")

On August 10, 2020, Veoneer signed a definitive agreement to sell the majority of the Brake Systems business in North America to ZF Friedrichshafen AG ("ZF"). The aggregate purchase price was $1. In connection with the transaction, the Company received approximately $22 million from ZF for VBS operational cost reimbursements. See Note 5 "Divestiture and held for sale" for additional information.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

Restricted Cash

Restricted cash represents amounts designated for uses other than current operations and $1 million of Restricted cash related to cash collateral for other corporate purposes as of June 30, 2021.

Concentration of Credit Risk

A substantial majority of the Company’s trade receivables are derived from sales to Original Equipment Manufactures ("OEMs"). For the three and six months ended June 30, 2021, the Company’s four largest customers accounted for 44% and 46% of net sales, respectively, and for the three and six months ended June 30, 2020, the Company’s four largest customers accounted for 55% and 59% of net sales, respectively. Additionally, as of June 30, 2021 and December 31, 2020, these four largest customers accounted for 33% and 40% of the Company’s accounts receivables, respectively. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. The Company believes that credit risks are moderated by the financial stability of the Company’s major customers.

New Accounting Standards

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements.

Adoption of New Accounting Standards

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes," which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2019-12 in the first quarter of 2021. The adoption of ASU 2019-12 did not have a material impact on the Company's unaudited condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company adopted ASU 2018-14 in the first quarter of 2021. The adoption of ASU 2018-14 did not have a material impact on the Company's unaudited condensed consolidated financial statements.

Accounting Standards Issued But Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The guidance provides optional expedients and exceptions related to certain contract modifications and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another rate that is expected to be discontinued. The guidance was effective upon issuance and generally can be applied to applicable contract modifications and hedge relationships prospectively through December 31, 2022. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on its disclosures.

In August 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)." The guidance provides simplifications of the accounting for convertible instruments and reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. In addition to further improve the decision usefulness and relevance of the information being provided to users of financial statements, information transparency has been increased by amending certain disclosure requirements. The guidance is effective for public business entities for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. In addition, an entity should adopt the guidance as of the beginning of its annual fiscal year. The amendments in this update are required to be applied through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. The Company is currently evaluating this guidance to determine the impact on its disclosures.

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Revenue

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary region and products.

Net Sales by Region

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Asia	$	100	$	—	$	100	$	59	$	—	$	59
Americas	114		13		127		43		5		48
Europe	171		—		171		77		—		77
Total net sales	$	385	$	13	$	398	$	179	$	5	$	184

Net Sales by Region

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Asia	$	198	$	—	$	198	$	117	$	24	$	141
Americas	245		24		$	269	160		19		$	179
Europe	349		—		349		226		—		226
Total net sales	$	792	$	24	$	816	$	503	$	43	$	546

Net Sales by Products

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Restraint Control Systems	$	175	$	—	$	175	$	100	$	—	$	100
Active Safety products	197		—		197		79		—		79
Brake Systems	—		13		13		—		5		5
Other	13		—		13		—		—		—
Total net sales	$	385	$	13	$	398	$	179	$	5	$	184

Net Sales by Products

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Restraint Control Systems	$	364	$	—	$	364	$	262	$	—	$	262
Active Safety products	402		—		402		241		—		241
Brake Systems	—		24		24		—		43		43
Other	26		—		26		—		—		—
Total net sales	$	792	$	24	$	816	$	503	$	43	$	546

XML

Business Combinations

6 Months Ended

Jun. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Business Combinations

Business Combinations

Business combinations generally take place to either gain key technology or strengthen Veoneer’s position in a certain geographical area or with a certain customer. The results of operations and cash flows from the Company’s acquisitions have been included in the Company’s unaudited condensed consolidated financial statements prospectively from their date of acquisition.

Zenuity, Inc and Zenuity GmbH

Zenuity AB, a 50% ownership joint venture with Volvo Cars Corporation (VCC), was separated pursuant to definitive agreements between the Company and VCC, in order for each company to more effectively drive their respective strategies. As

part of the transaction the Company paid approximately $37 million to Zenuity for 200 software engineers and two business units located in Germany and the US.

The Company applied the acquisition method of accounting to the Zenuity, Inc and Zenuity GmbH entities, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The goodwill reflects the workforce. The recognized goodwill of $25 million recorded as part of this acquisition is not deductible for tax purposes. The opening balance sheet is based on final assessment of the fair values of certain acquired assets, principally intangibles, and certain assumed liabilities. The Company used discounted cash flow ("DCF") analyses, which represent Level 3 fair value measurements, to assess the purchase price allocation. As the Company finalizes the fair value of the acquired assets and assumed liabilities, additional purchase price adjustments may be recorded during the measurement period. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments occur.

Total Zenuity, Inc and Zenuity GmbH acquisition related costs were approximately $1 million for the period ended December 31, 2020.

The following table summarizes the estimated fair values of identifiable acquired assets and assumed liabilities:

Assets	As of July 1, 2020
Cash and cash equivalents	$	4
Receivable, net	12
Property, plant and equipment, net	3
Operating lease right-of-use assets	8
Goodwill	25
Total assets	$	52
Tax payable	2
Accrued liabilities	3
Operating lease non-current liabilities	10
Total liabilities	$	15
Net assets acquired	$	37

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Divestiture and held for sale

6 Months Ended

Jun. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Divestiture and held for sale

Divestiture and held for sale

VBS

In 2019, the Company started exploring strategic options for its non-core business in the Brake Systems segment. In the first quarter of 2020, management committed and approved a plan to sell VBS. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of June 30, 2020 and were required to be adjusted to the lower of fair value less cost to sell or carrying value. This resulted in an impairment charge of approximately $144 million which was recorded within Loss on divestiture and assets impairment charges, net on the unaudited Condensed Consolidated Statements of Operations during the period ended June 30, 2020. The impairment was measured using third party sales pricing to determine fair values of the assets. The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." The assets and liabilities associated with the transaction were separately classified as held for sale during 2020 and depreciation of these long-lived assets ceased during first half of 2020. The divestiture did not meet the criteria for presentation as a discontinued operation.

On August 10, 2020 Veoneer signed a definitive agreement to sell the majority of the Brake Systems business in North America to ZF. The aggregate purchase price was $1. In connection with the transaction, the Company received approximately $22 million from ZF for VBS operational cost reimbursement. The transaction closed during third quarter 2020 and no additional gain or loss was recognized.

VNBS

In the fourth quarter of 2019, management approved a plan to sell VNBS. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of December 31, 2019, and depreciation of long-lived assets ceased. The divestiture did not meet the criteria for presentation as a discontinued operation.

On October 30, 2019, the Company entered into definitive agreements with Nissin-Kogyo Co., Ltd. and Honda Motor Co., Ltd to divest VNBS. On February 3, 2020, the Company completed the sale of VNBS. The aggregate purchase price of the transaction was $176 million, subject to certain adjustments. The net cash proceeds after adjusting for closing costs was $175 million. The Company recognized a gain on the divestiture of $77 million, net of closing costs.

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Debt

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Debt

Debt

The Company’s short and long-term debt consists of the following:

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Short-Term Debt:
Short-term borrowings	$	4	$	4
Long-Term Debt:
4.00% Convertible Senior Notes due 2024 (Carrying value)	174		170
Other long-term borrowings	7		7
Total Debt	$	185	$	181

Short-Term Debt:

Short-term debt is included in Other current liabilities in the Condensed Consolidated Balance Sheet.

Long-Term Debt:

Other long-term borrowings

Other long-term borrowings are included in Other non-current liabilities in the Condensed Consolidated Balance Sheet.

4.00% Convertible Senior Notes

On May 28, 2019, the Company issued, in a registered public offering in the U.S., Convertible Senior Notes (the “Notes”) with an aggregate principal amount of $207 million. The Notes bear interest at a rate of 4.00% per year payable semi-annually in arrears on June 1 and December 1 of each year, beginning December 1, 2019. The Notes will mature on June 1, 2024, unless repurchased, redeemed or converted in accordance with their terms prior to such date.

The net proceeds from the offering of the Notes were approximately $200 million, after deducting issuance costs of $7 million. The Company accounted for these issuance costs as a direct deduction from the carrying amount of the Notes. These costs are being amortized into interest expense for 5 years or through June 2024.

The conversion rate is 44.8179 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $22.3125 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or notice of redemption, as the case may be. In no event will the conversion rate per $1,000 principal amount of notes as a result of this adjustment exceed 57.1428 shares of common stock, as stipulated in the indenture.

The Company may not redeem the Notes prior to June 1, 2022. On or after this date, the Company may redeem for cash, shares or both all or any portion of the Notes, at our option, if the last reported sale price of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes.

If the Company undergoes a fundamental change (as defined in the indenture), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Notes are the Company's general unsecured obligations and rank senior in right of payment to all of the Company's indebtedness that is expressly subordinated in right of payment to the Notes, equal in right of payment with all of the Company's liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.

Holders may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding March 1, 2024 only under the following circumstances: (1) if the last reported sale price of the Company's common stock for at least 20 trading days, whether or not consecutive, during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the "trading price" (as defined in the indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.

On or after March 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company's election, as stipulated in the indenture.

In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the unaudited Consolidated Condensed Balance Sheet and amortized to interest expense using the effective interest method over the term of the Notes. The effective interest rate on the Notes is 10%. The equity component of the Notes of approximately $46 million is included in additional paid-in capital in the unaudited Condensed Consolidated Balance Sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Notes using the same proportions as the proceeds from the Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the unaudited Condensed Consolidated Balance Sheet and amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ equity.

The following table presents the outstanding principal amount and carrying value of the Notes:

4.00% Convertible Senior Notes due 2024	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Principal amount (face value)	$	207	$	207
Unamortized issuance cost	(3)		(4)
Unamortized debt discount	(30)		(33)
Net Carrying value	$	174	$	170

The Company recognized total interest expense related to the Notes of $5 million and $4 million for the three months ended June 30, 2021 and 2020, respectively, and $9 million and $8 million for the six months ended June 30, 2021 and 2020, respectively, in the unaudited Condensed Consolidated Statements of Operations.

The estimated fair value of the Notes was $263 million as of June 30, 2021. The estimated fair value of the Notes was determined through consideration of quoted market prices. The fair value is classified as Level 2, as defined in Note 8 "Fair Value Measurements".

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Restructuring Activities

6 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring Activities

Restructuring Activities

The Company is undertaking various restructuring activities related to its Market Adjustment Initiatives program to achieve its strategic and financial targets and plans. These restructuring activities include, but are not limited to, consolidation of available capacity and resources along with production, engineering and administrative cost structure realignments. The Company expects to finance restructuring activities through its cash on hand and cash generated from operations.

Restructuring costs are recorded as elements of a plan as they become finalized and approved where the timing of the activities and the amount of related costs are not expected to change materially. Such costs are estimated based on information available at the time such charges are recorded. In general, management anticipates that restructuring activities will be completed within a relatively short time frame such that changes to the plan are expected to be immaterial. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially estimated.

During the first quarter of 2021, the Company announced certain restructuring activities impacting certain engineering and administrative functions to further align the Company's resources with its core product technologies and customers. During the three and six month period ended June 30, 2021, the Company recorded restructuring expenses of $2 million and $3 million, respectively. The Company recorded zero in restructuring expenses for the three and six month period ended June 30, 2020. The payback on such restructuring expenses is expected to be less than one year.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs.

Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.

Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Assets which are valued at net asset value per share ("NAV"), or its equivalent, as a practical expedient are reported outside the fair value hierarchy but are included in the total assets for reporting and reconciliation purposes.

Items Measured at Fair Value on a Recurring Basis

Derivative instruments - The Company uses derivative financial instruments, “derivatives”, to mitigate the market risk that occurs from its exposure to changes in interest and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial risk policy. The derivatives outstanding as of June 30, 2021 were foreign exchange swaps. All swaps principally match the terms and maturity of the underlying obligation and no swaps have a maturity beyond six months. All derivatives are recognized in the unaudited condensed consolidated financial statements at fair value. Certain derivatives are from time to time designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria. For certain other derivatives hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest and foreign exchange rates. The Company’s derivatives are classified as Level 2 of the fair value hierarchy and there were no transfers between the levels during this or comparable periods.

Financial Statement Presentation

The Company enters into master netting agreements, International Swaps and Derivatives Association (ISDA) agreements with all derivative counterparties. The netting agreements allow for netting of exposures in the event of default or breach of the counterparty agreement. The fair values in the Condensed Consolidated Balance Sheets have been presented on a gross basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s Condensed Consolidated Balance Sheet. The notional value of the derivatives not designated as hedging instruments was $223 million as of June 30, 2021 and $179 million as of December 31, 2020. As of June 30, 2021, derivatives not designated as

hedging instruments was an asset of $3 million, and as of December 31, 2020, the derivatives not designated as hedging instruments was an asset of $1 million. There were no derivatives designated as hedging instruments.

Gains and losses on derivative financial instruments reported in Other non-operating items, net in the unaudited Condensed Consolidated Statements of Operations, for the three months ended June 30, 2021 and 2020, were a gain of $2 million and a loss of less than $1 million, respectively, and for the six months ended June 30, 2021 and 2020, were a gain of $4 million and a gain of $2 million, respectively.

Items Measured at Fair Value on a Non-Recurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets. VBS assets and liabilities classified as held for sale and the related impairment as of June 30, 2020 were measured using third party sales pricing to determine fair values of the assets. See Note 5 "Divestiture and held for sale" for additional information.

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income expense for the three and six month periods ended June 30, 2021 was $4 million and $9 million, respectively. The income expense for three and six month periods ended June 30, 2020 was $2 million and $26 million, respectively. There were no discrete items in the three and six month periods ended June 30, 2021. Discrete items, net were a benefit of $1 million and expense of $20 million for the three and six month periods ended June 30, 2020, respectively. The discrete item in the six month period ended June 30, 2020 was primarily related to the tax impact of the divestiture of VNBS. Veoneer's effective tax rate differs from an expected statutory rate primarily due to the discrete item and losses in certain jurisdictions that are not benefited.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. Valuation allowances have been established for the Company’s operations in United States, Sweden, France, Japan and China.

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Inventories

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are stated at the lower of cost (according to first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows:

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Raw materials	$	128	$	105
Work in progress	18		14
Finished products	53		51
Inventories	199		170
Inventory valuation reserve	(42)		(36)
Total inventories, net of reserve	$	157	$	134

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Equity Method Investment

6 Months Ended

Jun. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment

Equity Method Investment

As of June 30, 2021, the Company has two equity method investments.

Zenuity

On April 2, 2020, the Company entered into a non-binding agreement with VCC to separate Zenuity, a 50% ownership joint venture with VCC in order for each company to drive their respective strategies more effectively. The parties entered into definitive agreements and effected the separation on July 1, 2020.

On July 1, 2020, the Company finalized the split of Zenuity. As part of the transaction the Company paid approximately $37 million to Zenuity for 200 software engineers and two business units located in Germany and the US. Veoneer acquired the right to use Zenuity's intellectual property for a total consideration of SEK 1,067 million (approximately $114 million) which was settled against dividend receivable of SEK 1,067 million (approximately $114 million). The remaining value of that equity investment is zero.

As the transaction was between the investor and investee, the Company did not recognize any gain from the transaction.

Following completion of the transaction, Veoneer and VCC continue to each own 50% of Zenuity AB. The joint venture was not dissolved as part of the transaction but continues as a holding company that owns the Zenuity's intellectual property.

During the first quarter of 2021, the Company received a dividend of SEK 108 million (approximately $13 million) in cash (representing 50%, with the remainder received by VCC) from Zenuity. In addition, the Company received a dividend of SEK 1,067 million (approximately $127 million) which was settled net against Related party short-term and long-term debt related to Zenuity's intellectual property that Veoneer acquired the right to use as part of the separation of Zenuity.

During the first quarter of 2020, Veoneer contributed SEK 150 million (approximately $16 million) in cash (representing 50% of the total contribution, with the remainder made by VCC) into Zenuity to support its future operating cash flow needs.

AutotechFund I, L.P.

The Company has an investment interest with Autotech Fund I, L.P of less than 20% which is accounted for under the equity method as the Company’s beneficial ownership interest in Autotech is similar to partnership interest.

On June 30, 2017, Veoneer committed to make a $15 million investment in Autotech pursuant to a limited partnership agreement, and as a limited partner, will periodically make capital contributions toward this total commitment amount. As of June 30, 2021 and December 31, 2020, Veoneer has contributed a total of $13 million to the fund. As of June 30, 2021 the Company has received a distribution of $3 million from the fund.

The carrying amounts reflected in the Condensed Consolidated Balance Sheet as of June 30, 2021 in equity method for the AutoTech approximates its fair value as of March 31, 2021, as this is the most recent information available to the Company at this time.

The profit and loss attributed to the investments is shown in the line item Gain (loss) from equity method investment in the unaudited Condensed Consolidated Statements of Operations. Veoneer’s share of Zenuity and AutoTech for the three and six month periods ended June 30, 2021 was a gain of $1 million and of $8 million, respectively. Veoneer’s share of Zenuity and AutoTech for the three and six month periods ended June 30, 2020 was a loss of $19 million and $38 million, respectively.

As of June 30, 2021 and December 31, 2020, the Company’s equity investment in Zenuity and Autotech amounted to $18 million and $153 million, respectively, after consideration of foreign exchange rate movements. The value of Zenuity investment as of June 30, 2021 is zero.

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Accrued Expenses

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expense

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Operating related accruals	$	62	$	70
Employee related accruals	81		102
Customer pricing accruals	17		20
Product related liabilities1	18		19
Other accruals	22		21
Total Accrued Expenses	$	200	$	232

1 As of June 30, 2021 and December 31, 2020, $9 million and $9 million, respectively, of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

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Retirement Plans

6 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Retirement Plans

Retirement Plans

Defined Benefit Pension Plans

The Company’s net periodic benefit costs for plans for the three and six months ended June 30, 2021 and 2020 were as follows:

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Service cost	$	1	$	1	$	2	$	2
Interest cost	1		1		1		1
Expected return on plan assets	(1)		(1)		(1)		(1)
Net periodic benefit cost	$	1	$	1	$	2	$	2

The service cost and amortization of prior service cost components are reported among employee compensation costs in the unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported in Other non-operating items, net in the unaudited Condensed Consolidated Statements of Operations.

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Stock Incentive Plan

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock Incentive Plan

Stock Incentive Plan

The Veoneer, Inc. 2018 and 2021 Stock Incentive Plan was established and effective on June 29, 2018 and May 10, 2021, respectively, to govern the Company’s stock-based awards that will be granted in the future. The Veoneer, Inc. 2018 and 2021 Stock Incentive Plan authorizes the grant of 3 million and 13 million shares, respectively, of Veoneer common stock for future equity awards to Veoneer employees and non-employee directors and authorizes up to 1.5 million additional shares to be used for the conversion of outstanding Autoliv stock awards in connection with the spin-off of the Company by Autoliv, Inc. on June 29, 2018 (the “Spin-Off”). Approximately 1 million shares were used for the conversion of the outstanding grants. As of May 10, 2021, all future awards will be granted under the 2021 Stock Incentive Awards and no further awards may be granted under the 2018 Stock Incentive Plan.

During the six months ended June 30, 2021 under the Company’s 2018 long-term incentive (LTI) program, certain employees received restricted stock units (RSUs) without dividend equivalent rights and performance shares (PSs) without dividend equivalent rights. The allocation between RSUs and PSs was 203,439 RSUs and 182,272 PSs at 100% target.

During the six months ended June 30, 2021 under the Company’s 2021 LTI program, certain non-employee directors received restricted stock units (RSUs) with dividend equivalent rights of 36,841.

The majority of the RSUs granted will vest on the third anniversary of the grant date, subject to the grantee’s continued employment with the Company on the vesting date and acceleration of vesting in certain circumstances. The fair value of RSUs and PSs granted in 2021 were calculated by using the closing stock price on the grant dates. The grant date fair value for the RSUs and PSs, granted in 2021 was $14 million.

PSs granted in 2021 may be earned during the first quarter of 2024, upon the Compensation Committee’s certification of achievement of the applicable performance goals. The grantee may earn 0%-200% of the target number of PSs based on the Company’s achievement of specified targets related to the Company’s gross margin for the applicable performance period. Each PS represents a promise to transfer a share of the Company’s common stock to the employee following completion of the performance period, provided that the performance goals mentioned above are met and provided, further, that the grantee remains employed through the performance period, subject to certain limited exceptions.

Veoneer recognized total stock (RSUs, PS and Stock Options) compensation cost of $3 million and $5 million for the three and six month periods ended June 30, 2021, respectively. During the three and six month periods ended June 30, 2020, the Company recorded $2 million and $4 million, respectively.

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Contingent Liabilities

6 Months Ended

Jun. 30, 2021

Loss Contingency [Abstract]

Contingent Liabilities

Contingent Liabilities

Legal Proceedings

Various claims, lawsuits and proceedings are pending or threatened against the Company, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not

have a material adverse impact on the condensed consolidated financial position of Veoneer, but the Company cannot provide assurance that Veoneer will not experience material litigation, product liability or other losses in the future.

Product Warranty, Recalls, and Intellectual Property

Veoneer is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such (actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage, the Company may also face product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product (or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall practices. A warranty, recall or product-liability claim brought against the Company in excess of its insurance may have a material adverse effect on the Company’s business. Vehicle manufacturers are also increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the repair or replacement costs of products when the product supplied did not perform as represented by the Company or expected by the customer. Accordingly, the future costs of warranty claims by customers may be material. However, the Company believes its established reserves are adequate. Veoneer’s warranty reserves are based upon the Company’s best estimates of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves, and adjusts them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company’s recorded estimates.

In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new orders, which may have a material impact on the Company’s results of operations.

The Company carries insurance for potential recall and product liability claims at coverage levels based on the Company’s prior claims experience. Veoneer cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in the Company’s businesses, now or in the future, or that such coverage always will be available should the Company, now or in the future, wish to extend, increase or otherwise adjust the Company’s insurance.

In its products, the Company utilizes technologies which may be subject to intellectual property rights of third parties. While the Company does seek to procure the necessary rights to utilize intellectual property rights associated with its products, it may fail to do so. Where the Company so fails, the Company may be exposed to material claims from the owners of such rights. Where the Company has sold products which infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result thereof. Such claims could be material.

Product Related Liabilities

The Company records liabilities for product related risks when probable claims are identified and when it is possible to reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products, and volume of the products sold. The provisions are recorded on an accrual basis.

The table below summarizes the change in product related liabilities in the unaudited Condensed Consolidated Balance Sheet.

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Reserve at beginning of the period	$	18	$	18	$	19	$	15
Change in reserve	2		1		2		6
Cash payments	(2)		(1)		(3)		(3)
Reserve at end of the period	$	18	$	18	$	18	$	18

For the three and six month periods ended June 30, 2021 and 2020, cash paid primarily relates to warranty related issues. Agreements entered into between Autoliv and Veoneer in connection with the Spin-Off provide for Autoliv to indemnify Veoneer for certain liabilities related to electronics products manufactured before April 1, 2018. As of June 30, 2021 and December 31, 2020, $9 million of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

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Loss per share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Loss per share

Loss per share

Basic loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted loss per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted loss per share for the three month periods ended June 30, 2021 and 2020.

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions, except per share amounts)	2021		2020		2021		2020
Numerator:
Basic and diluted:
Net loss attributable to Veoneer	$	(100)	$	(90)	$	(205)	$	(322)
Denominator:
Basic: Weighted average number of shares outstanding (in millions)	111.84		111.58		111.77		111.52
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1	111.84		111.58		111.77		111.52
Basic loss per share	$	(0.89)	$	(0.80)	$	(1.83)	$	(2.89)
Diluted loss per share	$	(0.89)	$	(0.80)	$	(1.83)	$	(2.89)

1 Shares in the diluted loss per share calculation represent basic shares due to the net loss.

In periods when the Company has a net loss, equity incentive awards are excluded from the Company's calculation of earnings per share as their inclusion would have an anti-dilutive effect. The Company excluded equity incentive awards of 762,418 and 798,616 shares for the three and six month periods ended June 30, 2021, respectively, and 866,008 and 649,349 for the three and six month periods ended June 30, 2020, respectively, from the diluted loss per share calculations.

The Company may settle the conversion of the Notes in cash, shares of the Company's common stock or any combination thereof at its election. For the Notes, the number of shares of the Company's common stock issuable at the conversion price of $22.3125 per share would be 9,277,305 shares if the Company elected to settle the conversion wholly in shares. See Note 6 "Debt" for more information. Due to anti-dilutive effects, the Company excluded potential convertible shares due under the Notes of 9,277,305 for the three and six month periods ended June 30, 2021 and 2020 from the diluted loss per share calculations.

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Segment Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

Financial results for the Company's reportable segment have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's Chief Operating Decision Maker (CODM) in allocating resources and in assessing performance.

The Company has one reportable segment, which includes the Company’s electronics resources and expertise in passive safety electronics and active safety.

The Company previously had two operating segments - Electronics and Brake Systems. The Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold on August 10, 2020. The remaining Brake Systems business is no longer a reportable segment due to immateriality.

The accounting policies for the reportable segment are the same as those described in Note 2 "Summary of Significant Accounting Policies" included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 19, 2021.

Loss Before Income Taxes	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Electronics	$	(76)	$	(29)	$	(161)	$	(123)
Brake Systems	—		(20)		—		(33)
Segment operating loss	(76)		(49)		(161)		(156)
Corporate and other	(16)		(15)		(35)		(30)
Loss on divestiture and assets impairment charge, net	—		—		—		(67)
Interest and other non-operating items, net	(5)		(5)		(8)		(4)
Gain (loss) from equity method investment	1		(19)		8		(38)
Loss before income taxes	$	(96)	$	(88)	$	(196)	$	(295)

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Relationship with Former Parent and Related Entities

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Relationship with Former Parent and Related Entities

Relationship with Former Parent and Related Entities

Transactions with Related Parties

Veoneer and Autoliv entered into transition service agreements in connection with the Spin-Off under which certain services are provided by Autoliv to Veoneer and certain services are provided by Veoneer to Autoliv. For the three and six month periods ended June 30, 2021, the Company recognized zero of expense under the agreements and less than $1 million for the three and six month period ended June 30, 2020. For the three and six month period ended June 30, 2021, the Company recognized zero of income under the TSA and less than $1 million of income for the three and six month period ended June 30, 2020.

Throughout the periods covered by the unaudited condensed consolidated financial statements, Veoneer sold finished goods to Autoliv and Related Party sales amounted to $20 million and $41 million for the three and six month periods ended June 30, 2021, respectively, and $11 million and $30 million for the three and six month periods ended June 30, 2020, respectively.

Related Party Balances

Amounts due to and due from related parties are summarized in the below table:

Related Party	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Related party receivable	$	8	$	9
Related party payables	1		2
Related party short-term debt	—		16
Related party long-term debt	—		115

Related party receivables are mainly driven by reseller agreements put in place in connection with the Spin-Off. The reseller agreements are between Autoliv and Veoneer and facilitate the temporary arrangement of the sale of Veoneer products manufactured for certain customers for a limited period after the Spin-Off. Autoliv collects the customer payments and remits the payments to Veoneer.

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Factoring

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Factoring

Factoring

The Company receives bank notes generally maturing within six months from certain of its customers in China to settle trade accounts receivable. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash.

For the six months ended June 30, 2021 and 2020, the Company has entered into arrangements with financial institutions and sold $117 million and $23 million, respectively, of trade receivables without recourse and $31 million and $6 million, respectively, of bank notes without recourse, which qualify as sales as all rights to the trade and notes receivable have passed to the financial institution.

As of June 30, 2021, the Company had $1 million of trade notes receivables, which remain outstanding and will mature within the second half of 2021. The collections of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature.

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Subsequent Events	6 Months Ended
	Jun. 30, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn July 22 2021, Magna International Inc. and Veoneer Inc. announced that they have entered into a definitive merger agreement under which Magna will acquire Veoneer, a leader in automotive safety technology. Pursuant to the agreement, Magna will acquire all of the issued and outstanding shares of Veoneer for $31.25 per share in cash, representing an equity value of $3.8 billion, and an enterprise value of $3.3 billion, inclusive of Veoneer’s cash, net of debt and other debt-like items as of March 31, 2021.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Segments

The Company has one operating segment, the Electronics segment. The Company previously had two operating segments, Electronics and Brake Systems. Electronics includes all electronics resources and expertise, Restraint Control Systems and Active Safety products, and Brake Systems provided brake control and actuation systems. The Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold on August 10, 2020. The remaining Brake Systems business is no longer a reportable segment due to immateriality.

Restricted Cash

Restricted CashRestricted cash represents amounts designated for uses other than current operations and $1 million of Restricted cash related to cash collateral for other corporate purposes as of June 30, 2021.

Concentration of Credit Risk

Concentration of Credit Risk

A substantial majority of the Company’s trade receivables are derived from sales to Original Equipment Manufactures ("OEMs"). For the three and six months ended June 30, 2021, the Company’s four largest customers accounted for 44% and 46% of net sales, respectively, and for the three and six months ended June 30, 2020, the Company’s four largest customers accounted for 55% and 59% of net sales, respectively. Additionally, as of June 30, 2021 and December 31, 2020, these four largest customers accounted for 33% and 40% of the Company’s accounts receivables, respectively. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. The Company believes that credit risks are moderated by the financial stability of the Company’s major customers.

New Accounting Standards

New Accounting Standards

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s unaudited condensed consolidated financial statements.

Adoption of New Accounting Standards

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes," which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2019-12 in the first quarter of 2021. The adoption of ASU 2019-12 did not have a material impact on the Company's unaudited condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company adopted ASU 2018-14 in the first quarter of 2021. The adoption of ASU 2018-14 did not have a material impact on the Company's unaudited condensed consolidated financial statements.

Accounting Standards Issued But Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The guidance provides optional expedients and exceptions related to certain contract modifications and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another rate that is expected to be discontinued. The guidance was effective upon issuance and generally can be applied to applicable contract modifications and hedge relationships prospectively through December 31, 2022. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on its disclosures.

In August 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)." The guidance provides simplifications of the accounting for convertible instruments and reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. In addition to further improve the decision usefulness and relevance of the information being provided to users of financial statements, information transparency has been increased by amending certain disclosure requirements. The guidance is effective for public business entities for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. In addition, an entity should adopt the guidance as of the beginning of its annual fiscal year. The amendments in this update are required to be applied through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. The Company is currently evaluating this guidance to determine the impact on its disclosures.

Fair Value Measurements

The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs.

Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.

Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Assets which are valued at net asset value per share ("NAV"), or its equivalent, as a practical expedient are reported outside the fair value hierarchy but are included in the total assets for reporting and reconciliation purposes.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets.

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Revenue (Tables)

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue disaggregated by primary region and products of revenue recognition

In the following tables, revenue is disaggregated by primary region and products.

Net Sales by Region

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Asia	$	100	$	—	$	100	$	59	$	—	$	59
Americas	114		13		127		43		5		48
Europe	171		—		171		77		—		77
Total net sales	$	385	$	13	$	398	$	179	$	5	$	184

Net Sales by Region

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Asia	$	198	$	—	$	198	$	117	$	24	$	141
Americas	245		24		$	269	160		19		$	179
Europe	349		—		349		226		—		226
Total net sales	$	792	$	24	$	816	$	503	$	43	$	546

Net Sales by Products

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Restraint Control Systems	$	175	$	—	$	175	$	100	$	—	$	100
Active Safety products	197		—		197		79		—		79
Brake Systems	—		13		13		—		5		5
Other	13		—		13		—		—		—
Total net sales	$	385	$	13	$	398	$	179	$	5	$	184

Net Sales by Products

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(Dollars in millions)	Electronics		Brake Systems		Total		Electronics		Brake Systems		Total
Restraint Control Systems	$	364	$	—	$	364	$	262	$	—	$	262
Active Safety products	402		—		402		241		—		241
Brake Systems	—		24		24		—		43		43
Other	26		—		26		—		—		—
Total net sales	$	792	$	24	$	816	$	503	$	43	$	546

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of business acquisitions, by acquisition

The following table summarizes the estimated fair values of identifiable acquired assets and assumed liabilities:

Assets	As of July 1, 2020
Cash and cash equivalents	$	4
Receivable, net	12
Property, plant and equipment, net	3
Operating lease right-of-use assets	8
Goodwill	25
Total assets	$	52
Tax payable	2
Accrued liabilities	3
Operating lease non-current liabilities	10
Total liabilities	$	15
Net assets acquired	$	37

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Debt (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of debt

The Company’s short and long-term debt consists of the following:

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Short-Term Debt:
Short-term borrowings	$	4	$	4
Long-Term Debt:
4.00% Convertible Senior Notes due 2024 (Carrying value)	174		170
Other long-term borrowings	7		7
Total Debt	$	185	$	181

The following table presents the outstanding principal amount and carrying value of the Notes:

4.00% Convertible Senior Notes due 2024	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Principal amount (face value)	$	207	$	207
Unamortized issuance cost	(3)		(4)
Unamortized debt discount	(30)		(33)
Net Carrying value	$	174	$	170

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Inventories (Tables)

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Components of inventories

Inventories are stated at the lower of cost (according to first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows:

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Raw materials	$	128	$	105
Work in progress	18		14
Finished products	53		51
Inventories	199		170
Inventory valuation reserve	(42)		(36)
Total inventories, net of reserve	$	157	$	134

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Summary of accrued expenses

	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Operating related accruals	$	62	$	70
Employee related accruals	81		102
Customer pricing accruals	17		20
Product related liabilities1	18		19
Other accruals	22		21
Total Accrued Expenses	$	200	$	232

1 As of June 30, 2021 and December 31, 2020, $9 million and $9 million, respectively, of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

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Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Schedule of components of net periodic benefit cost

The Company’s net periodic benefit costs for plans for the three and six months ended June 30, 2021 and 2020 were as follows:

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Service cost	$	1	$	1	$	2	$	2
Interest cost	1		1		1		1
Expected return on plan assets	(1)		(1)		(1)		(1)
Net periodic benefit cost	$	1	$	1	$	2	$	2

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Contingent Liabilities (Tables)

6 Months Ended

Jun. 30, 2021

Loss Contingency [Abstract]

Schedule of change in balance sheet position of product related liabilities

The table below summarizes the change in product related liabilities in the unaudited Condensed Consolidated Balance Sheet.

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Reserve at beginning of the period	$	18	$	18	$	19	$	15
Change in reserve	2		1		2		6
Cash payments	(2)		(1)		(3)		(3)
Reserve at end of the period	$	18	$	18	$	18	$	18

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Loss per share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted loss per share for the three month periods ended June 30, 2021 and 2020.

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions, except per share amounts)	2021		2020		2021		2020
Numerator:
Basic and diluted:
Net loss attributable to Veoneer	$	(100)	$	(90)	$	(205)	$	(322)
Denominator:
Basic: Weighted average number of shares outstanding (in millions)	111.84		111.58		111.77		111.52
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1	111.84		111.58		111.77		111.52
Basic loss per share	$	(0.89)	$	(0.80)	$	(1.83)	$	(2.89)
Diluted loss per share	$	(0.89)	$	(0.80)	$	(1.83)	$	(2.89)

1 Shares in the diluted loss per share calculation represent basic shares due to the net loss.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Schedule of (loss)/income before income taxes

Loss Before Income Taxes	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2021		2020		2021		2020
Electronics	$	(76)	$	(29)	$	(161)	$	(123)
Brake Systems	—		(20)		—		(33)
Segment operating loss	(76)		(49)		(161)		(156)
Corporate and other	(16)		(15)		(35)		(30)
Loss on divestiture and assets impairment charge, net	—		—		—		(67)
Interest and other non-operating items, net	(5)		(5)		(8)		(4)
Gain (loss) from equity method investment	1		(19)		8		(38)
Loss before income taxes	$	(96)	$	(88)	$	(196)	$	(295)

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Relationship with Former Parent and Related Entities (Tables)

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Summary of amount due to and from related parties

Amounts due to and due from related parties are summarized in the below table:

Related Party	As of
(Dollars in millions)	June 30, 2021		December 31, 2020
Related party receivable	$	8	$	9
Related party payables	1		2
Related party short-term debt	—		16
Related party long-term debt	—		115

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Basis of Presentation - Additional Information (Details)		6 Months Ended
	Aug. 10, 2020 USD ($) segment	Jun. 30, 2021 USD ($) segment	Jun. 30, 2020 USD ($)	Feb. 03, 2020 USD ($) transaction	Oct. 30, 2019 USD ($)
Restructuring Cost and Reserve [Line Items]
Number of operating segments | segment	2	1
Proceeds from divestitures		$ 0	$ 176,000,000
VNBS
Restructuring Cost and Reserve [Line Items]
Ownership percentage in joint venture					51.00%
Honda VNBS Product Line | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Restructuring Cost and Reserve [Line Items]
Disposal group, including discontinued operation, consideration				$ 176,000,000	$ 176,000,000
Number of transactions | transaction				2
Veoneer Nissin Brakes Systems | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Restructuring Cost and Reserve [Line Items]
Disposal group, including discontinued operation, consideration	$ 1
Proceeds from divestitures	$ 22,000,000

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Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Restricted cash	$ 1		$ 1		$ 0
Revenue from Contract with Customer | Customer Concentration Risk | Four Largest Customers
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Concentration risk, percentage	44.00%	55.00%	46.00%	59.00%
Accounts Receivable | Customer Concentration Risk | Four Largest Customers
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Concentration risk, percentage			33.00%		40.00%

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Revenue - Revenue Disaggregated by Primary Region and Products of Revenue Recognition (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 398	$ 184	$ 816	$ 546
Operating Segments | Restraint Control Systems
Disaggregation of Revenue [Line Items]
Net sales	175	100	364	262
Operating Segments | Active Safety products
Disaggregation of Revenue [Line Items]
Net sales	197	79	402	241
Operating Segments | Brake Systems
Disaggregation of Revenue [Line Items]
Net sales	13	5	24	43
Operating Segments | Other
Disaggregation of Revenue [Line Items]
Net sales	13	0	26	0
Electronics
Disaggregation of Revenue [Line Items]
Net sales	385	179	792	503
Electronics | Operating Segments | Restraint Control Systems
Disaggregation of Revenue [Line Items]
Net sales	175	100	364	262
Electronics | Operating Segments | Active Safety products
Disaggregation of Revenue [Line Items]
Net sales	197	79	402	241
Electronics | Operating Segments | Brake Systems
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Electronics | Operating Segments | Other
Disaggregation of Revenue [Line Items]
Net sales	13	0	26	0
Brake Systems
Disaggregation of Revenue [Line Items]
Net sales	13	5	24	43
Brake Systems | Operating Segments | Restraint Control Systems
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Brake Systems | Operating Segments | Active Safety products
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Brake Systems | Operating Segments | Brake Systems
Disaggregation of Revenue [Line Items]
Net sales	13	5	24	43
Brake Systems | Operating Segments | Other
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Asia | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	100	59	198	141
Asia | Electronics | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	100	59	198	117
Asia | Brake Systems | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	24
Americas | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	127	48	269	179
Americas | Electronics | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	114	43	245	160
Americas | Brake Systems | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	13	5	24	19
Europe | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	171	77	349	226
Europe | Electronics | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	171	77	349	226
Europe | Brake Systems | Operating Segments
Disaggregation of Revenue [Line Items]
Net sales	$ 0	$ 0	$ 0	$ 0

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Business Combinations - Narrative (Details) kr in Millions, $ in Millions		3 Months Ended		12 Months Ended
	Jul. 01, 2020 USD ($) business_unit software_engineer	Mar. 31, 2020 USD ($)	Mar. 31, 2020 SEK (kr)	Dec. 31, 2020 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021	Apr. 02, 2020
Business Acquisition [Line Items]
Goodwill				$ 317	$ 318
Zenuity, Inc
Business Acquisition [Line Items]
Goodwill	$ 25
Business combination, acquisition related costs				$ 1
Zenuity
Business Acquisition [Line Items]
Ownership percentage in joint venture	50.00%	50.00%	50.00%			50.00%	50.00%
Cash contribution to joint venture		$ 16	kr 150
Zenuity | Zenuity, Inc
Business Acquisition [Line Items]
Cash contribution to joint venture	$ 37
Number of software engineers | software_engineer	200
Number of business units | business_unit	2

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Business Combinations - Schedule of Business Acquisitions by Acquisition (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020	Jul. 01, 2020
Business Acquisition [Line Items]
Goodwill	$ 318	$ 317
Zenuity, Inc
Business Acquisition [Line Items]
Cash and cash equivalents			$ 4
Receivable, net			12
Property, plant and equipment, net			3
Operating lease right-of-use assets			8
Goodwill			25
Total assets			52
Tax payable			2
Accrued liabilities			3
Operating lease non-current liabilities			10
Total liabilities			15
Net assets acquired			$ 37

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Divestiture and held for sale - Narrative (Details) - USD ($)			6 Months Ended
	Aug. 10, 2020	Oct. 30, 2019	Jun. 30, 2021	Jun. 30, 2020	Feb. 03, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Assets impairment charge			$ 0	$ 144,000,000
Proceeds from divestitures			$ 0	176,000,000
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Veoneer Nissin Brakes Systems
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Assets impairment charge				$ 144,000,000
Disposal group, including discontinued operation, consideration	$ 1
Proceeds from divestitures	$ 22,000,000
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Honda VNBS Product Line
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, including discontinued operation, consideration		$ 176,000,000			$ 176,000,000
Disposal group, not discontinued operation, gain (loss) on disposal, net		175,000,000
Disposal group, not discontinued operation, gain (loss) on disposal, net of closing costs		$ 77,000,000

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Debt - Schedule of Short and Long Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020	May 28, 2019
Short-Term Debt:
Short-term borrowings	$ 4	$ 4
Long-Term Debt:
Total Debt	185	181
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024
Long-Term Debt:
4.00% Convertible Senior Notes due 2024 (Carrying value)	$ 174	170
Stated interest rate (percent)	4.00%		4.00%
Secured Debt | Other Long-Term Borrowings
Long-Term Debt:
4.00% Convertible Senior Notes due 2024 (Carrying value)	$ 7	$ 7

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Debt - Narrative (Details)		3 Months Ended		6 Months Ended
	May 28, 2019 USD ($) trading_day $ / shares	Jun. 30, 2021 USD ($) $ / shares	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) $ / shares	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Interest expense		$ 5,000,000	$ 4,000,000	$ 9,000,000	$ 8,000,000
Minimum
Debt Instrument [Line Items]
Trading days | trading_day	20
Maximum
Debt Instrument [Line Items]
Trading days | trading_day	30
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024
Debt Instrument [Line Items]
Stated interest rate (percent)	4.00%	4.00%		4.00%
Aggregate principal amount of debt	$ 207,000,000
Net proceeds	200,000,000
Debt issuance costs	$ 7,000,000
Amortization period of interest expense	5 years
Debt instrument, annual principal payment	$ 1,000
Debt instrument, convertible, conversion ratio	0.0448179000
Initial conversion price (in dollars per share) | $ / shares	$ 22.3125	$ 22.3125		$ 22.3125
Threshold percentage of stock price trigger	130.00%
Redemption price	100.00%
Measurement period, number of days after	5 days
Measurement period	10 days
Effective interest rate		10.00%		10.00%
Equity component of notes		$ 46,000,000		$ 46,000,000
Convertible debt fair value		$ 263,000,000		$ 263,000,000
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | Minimum
Debt Instrument [Line Items]
Threshold percentage of stock price trigger	98.00%
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | Maximum
Debt Instrument [Line Items]
Debt instrument, convertible, conversion ratio	0.0571428000
Threshold percentage of stock price trigger	130.00%

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Debt - Schedule of Notes (Details) - Convertible Senior Notes - 4% Convertible Senior Dotes due 2024 - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Principal amount (face value)	$ 207	$ 207
Unamortized issuance cost	(3)	(4)
Unamortized debt discount	(30)	(33)
Net Carrying value	$ 174	$ 170

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Restructuring Activities (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Restructuring and Related Activities [Abstract]
Restructuring expenses	$ 2,000,000	$ 0	$ 3,000,000	$ 0

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Fair Value Measurements - Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($) contract	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) contract	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
(Losses) (less than) and gains on derivative financial instruments recognized in other non-operating items	$ 2	$ 1	$ 4	$ 2
Foreign exchange swaps | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Maturity period of swap contracts			6 months
Foreign exchange swaps | Maturity Beyond Six Months
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of foreign currency derivatives held | contract	0		0
Foreign exchange forward contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notional value	$ 223		$ 223		$ 179
Derivative asset	$ 3		$ 3		$ 1

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Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income tax expense	$ 4	$ 2	$ 9	$ 26
Net discrete (benefit) expense related to changes in valuation allowance		$ 1		$ 20

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Inventories - Components of Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 128	$ 105
Work in progress	18	14
Finished products	53	51
Inventories	199	170
Inventory valuation reserve	(42)	(36)
Total inventories, net of reserve	$ 157	$ 134

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Equity Method Investment - Narrative (Details) kr in Millions			3 Months Ended						6 Months Ended
	Jul. 01, 2020 USD ($) business_unit software_engineer	Jul. 01, 2020 SEK (kr) business_unit software_engineer	Jun. 30, 2021 USD ($) investment	Mar. 31, 2021 USD ($)	Mar. 31, 2021 SEK (kr)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 SEK (kr)	Jun. 30, 2021 USD ($) investment	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Apr. 02, 2020	Jun. 30, 2017 USD ($)
Schedule of Equity Method Investments [Line Items]
Number of equity method investments | investment			2						2
Equity method investment			$ 18,000,000						$ 18,000,000		$ 153,000,000
Gain (loss) from equity method investment			1,000,000			$ (19,000,000)			8,000,000	$ (38,000,000)
Zenuity and AutoTechFund
Schedule of Equity Method Investments [Line Items]
Equity method investment			18,000,000						18,000,000		153,000,000
Zenuity
Schedule of Equity Method Investments [Line Items]
Ownership percentage in joint venture	50.00%	50.00%		50.00%	50.00%		50.00%	50.00%				50.00%
Cash contribution to joint venture							$ 16,000,000	kr 150
Proceeds from dividends received				$ 13,000,000	kr 108
Gain (loss) from equity method investment			1,000,000			$ 19,000,000			(8,000,000)	$ 38,000,000
Zenuity | Zenuity, Inc
Schedule of Equity Method Investments [Line Items]
Cash contribution to joint venture	$ 37,000,000
Number of software engineers | software_engineer	200	200
Number of business units | business_unit	2	2
Equity method investment			0						0
Zenuity | Zenuity, Inc | Intellectual Property
Schedule of Equity Method Investments [Line Items]
Intellectual property acquired, consideration	$ 114,000,000	kr 1,067		$ 127,000,000
AutoTechFund I, L.P
Schedule of Equity Method Investments [Line Items]
Ownership percentage in joint venture				20.00%	20.00%
Equity method investment			$ 13,000,000						13,000,000		$ 13,000,000		$ 15,000,000
Proceeds from equity method investment, distribution									$ 3,000,000

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Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Loss Contingencies [Line Items]
Operating related accruals	$ 62	$ 70
Employee related accruals	81	102
Customer pricing accruals	17	20
Product related liabilities	18	19
Other accruals	22	21
Total Accrued Expenses	200	232
Affiliated Entity
Loss Contingencies [Line Items]
Product related liabilities	$ 9	$ 9

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Retirement Plans - Schedule of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Defined Benefit Plan Disclosure [Line Items]
Defined benefit pension plans			us-gaap:PensionPlansDefinedBenefitMember
Existing Veoneer Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1	$ 1	$ 2	$ 2
Interest cost	1	1	1	1
Expected return on plan assets	(1)	(1)	(1)	(1)
Net periodic benefit cost	$ 1	$ 1	$ 2	$ 2

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Stock Incentive Plan - Narrative (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Jun. 29, 2018	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	May 10, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage grantee may earn based on achievement of specific targets				100.00%
2018 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for grant of common stock for future equity awards (in shares)	3,000,000					13,000,000
Number of shares used for conversion of outstanding grants (in shares)	1,000,000
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)				203,439
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)				182,272
RSUs and PSs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value				$ 14
Stock-based compensation expense		$ 3	$ 2	$ 5	$ 4
Restricted Stock Units (RSUs) With Dividend Equivalent Rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)				36,841
Spin-Off | 2018 Stock Incentive Plan | Autoliv
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of additional shares authorized to be used for conversion of outstanding Autoliv stock awards (in shares)	1,500,000
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage grantee may earn based on achievement of specific targets				0.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage grantee may earn based on achievement of specific targets				200.00%

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Contingent Liabilities - Schedule of Change in Balance Sheet Position of Product Related Liabilities (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Product Warranty Accrual [Roll Forward]
Reserve at beginning of the period	$ 18	$ 18	$ 19	$ 15
Change in reserve	2	1	2	6
Cash payments	(2)	(1)	(3)	(3)
Reserve at end of the period	$ 18	$ 18	$ 18	$ 18

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Contingent Liabilities - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Loss Contingencies [Line Items]
Product related liabilities	$ 18	$ 19
Affiliated Entity
Loss Contingencies [Line Items]
Product related liabilities	$ 9	$ 9

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Loss per share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Basic and diluted:
Net loss attributable to Veoneer	$ (100)	$ (90)	$ (205)	$ (322)
Denominator:
Weighted average number of shares outstanding (in millions)	111,840	111,580	111,770	111,520
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) (in shares)	111,840	111,580	111,770	111,520
Basic loss per share (in dollars per share)	$ (0.89)	$ (0.80)	$ (1.83)	$ (2.89)
Diluted loss per share (in dollars per share)	$ (0.89)	$ (0.80)	$ (1.83)	$ (2.89)

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Loss per share - Narrative (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	May 28, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Maximum number of shares issuable if debt was converted (in shares)	9,277,305		9,277,305
Stock Compensation Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from calculation (in shares)	762,418	866,008	798,616	649,349
Convertible Debt Securities
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from calculation (in shares)	9,277,305	9,277,305	9,277,305	9,277,305
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Initial conversion price (in dollars per share)	$ 22.3125		$ 22.3125		$ 22.3125

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Segment Information - Narrative (Details) - segment		6 Months Ended
	Aug. 10, 2020	Jun. 30, 2021
Segment Reporting [Abstract]
Number of operating segments	2	1

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Segment Information - Schedule of (Loss)/Income Before Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	$ (92)	$ (64)	$ (196)	$ (186)
Loss on divestiture and assets impairment charge, net	0	0	0	(67)
Interest and other non-operating items, net	(5)	(5)	(8)	(4)
Gain (loss) from equity method investment	1	(19)	8	(38)
Loss before income taxes	(96)	(88)	(196)	(295)
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	(76)	(49)	(161)	(156)
Corporate and other
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	(16)	(15)	(35)	(30)
Electronics | Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	(76)	(29)	(161)	(123)
Brake Systems | Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	$ 0	$ (20)	$ 0	$ (33)

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Relationship with Former Parent and Related Entities - Narrative (Details) - Autoliv - Affiliated Entity - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Related Party Transaction [Line Items]
Revenue from related parties	$ 20	$ 11	$ 41	$ 30
Transition Services Agreement
Related Party Transaction [Line Items]
Expense under the TSA	0	1	0	1
Income under the TSA (less than)	$ 1	$ 1	$ 1	$ 1

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Relationship with Former Parent and Related Entities - Summary of Amount Due to and from Related Parties (Details) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Related Party Transactions [Abstract]
Related party receivable	$ 8	$ 9
Related party payables	1	2
Related party short-term debt	0	16
Related party long-term debt	$ 0	$ 115

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Factoring (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Receivables [Abstract]
Sale of trade receivables	$ 117	$ 23
Sale of bank notes without recourse	31	$ 6
Trade notes receivables	$ 1

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Subsequent Events (Details) - Subsequent Event - Magna International Inc. - Veoneer, Inc $ / shares in Units, $ in Millions	Jul. 22, 2021 USD ($) $ / shares
Subsequent Event [Line Items]
Share price (USD per share) | $ / shares	$ 31.25
Equity value	$ 3,800
Enterprise value	$ 3,300